Considering Ch. 7 - couple of questions

[Florida30]

Hi all,

Great forum with lots of info. I have a couple of questions but want to give background. I was laid off my job in Nov. 08 and since have been collecting only unemployment, 1200 per month. Florida resident and based on the past 6 months I fall under the median income.

Assets
Cash - 2 Bank Accts aprrox $1,300
ING Acct $900
TD Ameritrade Acct - stock approx $6,000
Own Personal LLC -bank balance $0
Car (paid off) approx value $3,000

Liabilities
Unsecured CC debt of approx $80,000
Secured Dell Computer approx $1,600
Student Loans approx $36,000

Tricky items:
On title of house I share with partner, he has name on mortgage and house.
On title of his car as well (this was done to get cheaper car insurance rates and his car is paid off)

Questions:
1. If I file, what will happen to my TD brokerage account? Will they force me to sale the stock and take the $$? (it would sell at loss based on original purchase price)

2. What should I do with Dell account? List it or not? I want to keep the computer and still pay.

3. How do you treat a car you already own?

4. The tricky items, how does a trustee treat these? Since I am on the title of the house but not on the mortgage. The mortgage is more than the value, currently pursuing loan mod on this. And then the fact my name is on the title of his car.


Thanks in advance.

[NoMoreRed]

I can answer to the Dell Acct and car.....

You have to list all of your assets which would include the car if it's paid off. Then the trustee would look at what the value of the car is. I don't know what the exemption limits are in your state but the car would have to fall within those for you to keep it. If you want to keep the car if it doesn't fall within the exemption limits then you'll probably get the opportunity to pay the value of it to the trustee.

With Dell....list it. I doubt they will try to get your computer from you. We had a Dell account that we used to buy a laptop and new system about 1 year prior to even knowing we would end up in BK and Dell filed their claim with the trustee as unsecured. Computers are probably the fastest in losing value so I doubt they could do anything with it to get any money.

[AngelinaCat]

In Florida, you are allowed the value of up to $1000.00 on a car if it is paid off.

If it still has a mortgage on it you will have to decide if you want to reaffirm (some institutions require that) or do a 'ride-through'--that is keep on paying normally AND on time. The difference is that if you reaffirm and later have to surrender the car, you are stuck with the difference between what you owed and what the car sells for at auction. In a ride through, if you have to surrender, then you aren't liable for the difference.

Good luck

[StartingOver08]

What did you use to determine the value of your car? In Florida the Trustee's want you to use the NADA Retail value. Of course, none of the cars are worth that - but the way to fight that value is to get an independent vehicle appraisal. Make sure you point out all the car's defects to the appraiser! I understand that the vehicle appraisals are very inexpensive.

As to the stock account, unless you can fit it into your exemptions, the trustee will want it as it is an asset of yours.

Is your partner filing with you?

I assume you and your partner share the house. So believe it or not, even if your partner is not filing, his income has to be included in your petition and you have a household of 2 (if that's all there are).

This is where the Fl exemptions get very, very tricky and very, very small except for homestead. The good thing is that you have an unlimited amount for the house equity, but apparently you have no equity in the house as the mortgage is larger than the value.

Here are the Florida exemptions for you:

http://www.legalconsumer.com/bankruptcy/state_bankruptcy_info.php?st_fullName=Florida

[Florida30]

NoMoreRed: thanks for the Dell response...seems like it is treated as unsecured rather than secured....good to know.

AngelinaCat/StartingOver08: Regarding my car, I own it free and clear. I just used Blueblook value for the $3000. But I looked at Nada and it's in the range of $1,900 to $2,650. (2001 Mazda Protege 148k miles). It does need lots of work, new breaks, alignment, and other stuff the dealership told me I needed but didn't have the money to get the work done. So if I get an independent appraisal (heard carmax gives them) I could get them to factor in the work needed to sale it? Perhaps getting under the $1000 exemption.

I found out the brokerage account is based on last statement, which is cash, so thanks for that one.

So the house, I realize I would have to include partner's income which I think given the huge mortgage payment and monthly expenses, I would pass the means test if needed. Since there is no equity, the exemption doesn't apply?

To summarize (based on Florida), I would have $1,000 exemption for car, $1000 for personal property (including cash) and Homestead is N/A since no equity in house???

[StartingOver08]

Well, if you include partner's income and the expenses naturally, then since there is no equity in the house, you get a $4000 'bonus' (or wildcard) that you can use toward your personal goods and other accounts. Personal goods are furnishings, clothing etc. So you would have $1000 for the auto and $4000 total for all other exemptions. Check with a couple of attorney's ...but I'm in Fl too and that is what I was allowed. BTW, I filed alone, but I am married so it was very similar to your situation.

[Florida30]

The $4k wild card sounds great!

I live in Broward...did you use an attorney? Any recommendations?

One last question, if anyone can address, what happens if I am on the title of someone's car which is owned free and clear? I understand it has to be listed but can the trustee disregard it since I didn't pay off the note nor the current car insurance and only on it for insurance reasons?

Thanks again!!!

[StartingOver08]

I just PM'ed you a great attorney.

As to the other car, I am not sure what would happen as I believe the Trustee would consider it an asset of yours and it could be taken to satisfy debt, unless it too can fit in that $1000 auto exemption. Check with the attorney.

I do know that if your partner files too, you get a total of $10,000 to exempt, rather than the $5000 we have been discussing for a single filer.

[Florida30]

Thanks StartingOver08.

So all, I have another question. I seem to be confused about bank accounts. I currently have 60k plus in debt with BofA and also my primary checking account with them.

If I file Ch. 7, will they have access to the funds in my checking account?

If so, should I open a new account with a bank that I have no debt with?

Thanks in advance.

[StartingOver08]

Yes, you should open an account in another neutral bank before you file. You should do it now as BOA does not give you any notice - they just take your funds.

BOA is one of the worst for taking funds out of your account to apply to past due debt. They can not do it after you file and during your automatic stay period - the most dangerous time is before you file, after you are late in your payments on the debt.

[Florida30]

I am current on my CCs but I guess I will plan on opening a new account this week to be on the safe side.

Once you file, when do you stop paying credit cards? I mean, do you not pay between your file date through your discharge date? Doesn't that increase your cash on hand (assets)?

[Logan]

I am current on my CCs but I guess I will plan on opening a new account this week to be on the safe side.

Once you file, when do you stop paying credit cards? I mean, do you not pay between your file date through your discharge date? Doesn't that increase your cash on hand (assets)?

Most people would say stop paying NOW.

I paid mine right up to filing date because I didn't want lates on my credit report hoping that my scores would bounce back rapidly. Keep in mind that I went into BK unemployed but expected to get a good paying job quickly so I wasn't concerned about conserving cash.

Good luck,

Logan

[catleg]

You should probably sell the stock and use the proceeds to pay down the student loan.

[Florida30]

Logan,

Thats exactly the same reason why I am still paying. I am thinking (and someone correct me if I am wrong), I would be in a better situation with just a BK on my report and not additional lates.

Is this true?

[StartingOver08]

I believe it to be true, but don't really have any evidence other than the CR reflects your payment history right up to the filing date. Not after the filing date. Once you have filed and are discharged, then the iib (included in bankruptcy) and zero balance shows.