Selling Assets to Pay Lawyer

[bmac423]

Just found the site, lots of good info, really glad I found it.

What do you guys think about selling assets in order to pay a lawyer before filing bankruptcy? I know selling assets prior to filing is a big no no, but would it be ok in this case? Thanks in advance.

[AngelinaCat]

Hello, welcome to the forum:

First, you will need to give a little more information about your situation, before anyone can offer any kind of informed opinion.

For instance, in selling assets, are you talking about selling 20 collectible postcards for $20.00 each on eBay? Or are you talking about selling a vehicle or property worth 2K or more?

Thanks

[AngelinaCat]

You really need to avail yourself of several free consultations with BK attorneys in your area. Ask them this question. Someone practicing in your district is best able to advise you on this matter.

[bmac423]

Thanks for the response. I'm talking a projector worth about 500 dollars and a projector screen worth about 200 dollars. My debt is mostly from credit cards and is around 20,000.

I do intend to talk to some lawyers this coming week, just curious what the norm would be.

[AngelinaCat]

20K in ccs is rather low debt.

Do you have other debt such as medical or legal bills, etc.? Also, what is your age? If you are a young person, you might want to investigate other avenues to pay the cc bills rather than BK. The reason is that BK stays on your credit report for seven or more years, and you may have problems securing certain jobs or housing because of that.

Please read through all the 'stickies' posted throughout this forum.

[bmac423]

Thanks for the response again.

I'm 24, about 500 is in medical bills, another 22 thousand in credit cards.

This debt has built while I've been battling illness over a period of about 5 years, while I've been in college. Of course, I had to stay in school to keep insurance under my step father's plan (such a terrible system). During this time my grades have been poor and I've had a hard time maintaining a job. I've been much better as of late since finding a doctor who could finally diagnose my problem and suggest the proper treatment. Still not perfect, but good enough to work.

My minimum monthly payments on the credit cards is about 600 with an average of about 23% interest and I had paid on time until now.

I'm currently unemployed and probably prematurely quit a job about a month ago, due to concerns over back and wrist pain from incessant repetitive motion and disagreements about these problems with leadership (arthritis is very common in my family).

With a spotty job/school history and little in the line of qualifications, I'm having a very difficult time finding work while I finish up school. I've lowered my expectations significantly (I've applied at all the Pizza places around town)

23 thousand may seem like a drop in the bucket to some, but it seems like Niagara Falls to me. I can get the rates down, but there's still no way I can live and pay off that 600+ a month on a 7-8 dollar an hour job. I'm living with my parents for the time being, but they don't like it, and assuredly won't let me stay while I pay off the cards for 5-6 years.

My credit score really isn't a concern to me at this point. It's not like I'll be getting a mortgage any time soon. It really pains me to do it, but I think the bankruptcy is the best option for me. So, what do you think?

[eddiep]

To answer your original question, it would be fine to sell thoes items to pay your legal fees as long as you are selling these items at fair market value. The trustee will only be interested if you are trying to hide valuable assets.

[StartingOver08]

Selling items to pay the attorney fee to file is fine. Just keep a record of the items sold and the funds going to your attorney.

There may be another issue thoough - if you are living with your parents and you file BK, their income may affect your filing. This is very important to discuss with your attorney because the means test uses household income, not just your individual income. This may place you in a Ch 13 depending upon the means tests results.

As a possible alternative, have you talked with the hardship depts of each of the creditors you are working with to get the rate to a reasonable rate? They go to 2% or 4% in the hardship dept, in my experience. I have heard of rates even lower. This is something you have to negotiate with the individual cc's hardship dept - not the CSR's. Check out www.creditinfocenter.com in the forum section for details.

[AngelinaCatHub]

Selling items to pay the attorney fee to file is fine. Just keep a record of the items sold and the funds going to your attorney.

There may be another issue thoough - if you are living with your parents and you file BK, their income may affect your filing. This is very important to discuss with your attorney because the means test uses household income, not just your individual income. This may place you in a Ch 13 depending upon the means tests results.

As a possible alternative, have you talked with the hardship depts of each of the creditors you are working with to get the rate to a reasonable rate? They go to 2% or 4% in the hardship dept, in my experience. I have heard of rates even lower. This is something you have to negotiate with the individual cc's hardship dept - not the CSR's. Check out www.creditinfocenter.com in the forum section for details.

'StartingOver' has a good point. Suggestion to cure two ills: Perhaps you might pay your parents rent, stop paying on your CCs so you can afford to pay them a fair rental and that would keep their income separate to avoid a 13. You really want a 7 for a "new start". Whether you pay your parents or a stranger, you have to have a place to stay. As long as you pay them the going rate and your share of meals this would offset any household penalty as well as help your folks out. They may even like you more staying there and the pressure could ease up. 'Hub

P.S. on the original question, you have to pay your lawyer, all things are your estate and as long as you don't sell off a fortune of stuff, and hide the asset you've got to get the money from somewhere. Also as a brilliant young man and student, address the possibility at pro se. Down load the Nolo Chapter 7 book pdf format for about $17 bucks.

[bmac423]

Thank you all for the responses.

Paying rent is something I would be happy to do, if I had any income. Of course, I've only been living here 2 1/2 weeks. Is the applicable living situation based on the last 6 months? Also, could I put a monetary value on the services I provide to my family (chores, etc...)?

I was forced to buyout my lease at my previous apartment. I am paying 100 dollars a month for ten months. I had lived there up till Oct 1.

I've considered going pro se, but I'd hate for it not to work out due to a small mistake on my part. It seems as though a trustee may be more nit picky to a young man like myself who chose not to get representation. Plus, I'm far from brilliant.