Considering chapter 7

[lindsay2181]

I have kinda been all over the boards yesterday and today lol....after some reading, I think that Chapter 7 would be my best option.

I guess we meet the Means Test. I found this info:
For Louisiana, for cases filed after March 15, 2009, the median income for a single wage earner is $36,945; for a family of two, it is $46,741; for three, $52,628; and for four, $66,634. Add $6,900 for each individual in excess of 4.

We are a one income family. My husband's gross income is about 26k per year...take home pay is a lot less than that, after child support is deducted. We have 2 kids, and one on the way. So it looks to me as if we definitely meet that requirement. Even if I go back to work after the baby is born in March, it looks like we'd still be under the median income.

Our mobile home is in my mother-in-law's name so I shouldn't need to be concerned about that right? As long as we are paying her on time we shouldn't lose our home I suppose? The one thing I am concerned about is our vehicle. Louisiana law exempts: Motor vehicle to $7,500. This is what I'm not sure about. We were given this truck as a gift last year, paid in full by my in-laws and the title is in my husband's name. The KBB value is about $26k. Does this 7,500 exemption mean, you aren't entitled to keep a car worth more than $7,500? So if our vehicle is worth $26k it would be taken and sold? It's really the only reliable family vehicle we have. We do have a 99 Chevy Cavalier--it has no a/c and is not very dependable, so we recently considered selling it for $1000, but it was put up as collateral for a loan and after talking with the lienholders about selling it, it was too much of a hassle.

Other than that, what is considered valuable assets? Here is what I found is exempt in our state: http://research.lawyers.com/Louisian...Louisiana.html We don't really have much besides those things but a basic tv, PC, camera...I don't see those listed as exempt. So would they actually take those?

Of course when I find a BK attorney to do a consultation with I'm sure they'll be able to fill me in on all the details....but any tidbit of info I could get sooner would be appreciated, thanks!

[keepmine]

Yep, that $26K vechicle is gonna be a problem.

Your lawyer can best advise you but, you may need to sell it and buy something in the $7500 range. And use the excess for legal fees and living expenses.
I've seen a few of your posts and I gotta tell you, the answer to some of your questions about being short on cash every pay period is sitting in your driveway.

[AngelinaCatHub]

Yep, that $26K vechicle is gonna be a problem.

Your lawyer can best advise you but, you may need to sell it and buy something in the $7500 range. And use the excess for legal fees and living expenses.
I've seen a few of your posts and I gotta tell you, the answer to some of your questions about being short on cash every pay period is sitting in your driveway.

Well they said it was paid for so they aren't making payment. But I have to agree (other than inlaw's hurt feelings) the Trustee may see a profit in that car. It is 18.5K of value. I'm not sure if LA has any personal exemptions large enough to cover that equity. 7.5 K can purchase a very nice used car.

Other than that car, these folks don't have much of an income and should fly through a 7. 'Hub

[lindsay2181]

Okay...you are the first person to answer that question for me and that was my major concern. I am 100% sure that my in-laws would never speak to us again if we did sell it, as it was a gift from them (I almost don't feel like it's "ours" to do what we please with) and we have never had a vehicle that nice before. My husband is already against me looking into BK and I *think* if I tell him we would have to sell the truck he would reassure me that he is definitely not on board and not going to cooperate one bit. Now, we live in Louisiana which is a state of community property...but seriously, I can't take this truck that's in his name and sell it without his permission right? If I could/did, that would certainly be shooting myself in the foot with his parents.

Does it make a difference if we don't file jointly...that truck is in his name, and the debt is all in my name....but like I said we are in a community property state....and would him transferring the title to his parents' name be ill-advised? If they had given it to us with the title in their name instead of my husband's name, we would have no choice...(like with our mobile home). But, it IS in my husband's name, and makes it an issue.

[DeadManCrawling]

If you transfer title or sell the truck and cannot explain where the money went, you will need to wait to file, at least two years. Possibly longer. Need an attorney to answer that one, it varies.

It is not impossible to wait that long, but takes a strong stomach and a fair amount of luck. It is possible, or even likely, that you would be sued and garnished or forced to file sooner.

That is about the only possible option, if you are dead set against getting rid of the truck, or your husband is.

It's risky, though, and removes control of the situation from your hands, which is never a good thing.

[lindsay2181]

I was just googling and came across this, wondering if this would apply since this vehicle was wholly paid for by another person.

Not A Fraudulent Conveyance To Take Your Name Off Title Of Asset Wholly Paid For By Another Person
I have written occasionally, and recently, about situations where a parent purchases an asset and puts their child’s name on the asset as a joint owner for estate planning purposes. If the child has a creditor problem, or in contemplation of bankruptcy, transfers, or has the parent transfer, the asset to the parents’ name alone the issue arises of whether the transfer to the parent is a fraudulent conveyance as to the child’s creditors or the trustee in the child’s bankruptcy. Today, a blog reader referred me a bankruptcy case from the Southern District of Florida which dealt with this issue.


In this case a parent purchased a parcel of real estate and named her child a co-owner for estate planning purposes, that is, to avoid probate of the asset upon the parent’s death. The parent paid all expenses of ownership such as taxes and the mortgage. Prior to filing bankruptcy, the child deeded his interest to the parent. The bankruptcy court found that the deed to the parent was not a fraudulent conveyance by the child.

The court pointed out that whenever person A pays for a property and puts person B on title a "resulting trust" is created in favor of A. In other words, person B, who contributed no money to the property, holds his legal interest on the title in trust for A who is the property’s equitable owner. The bankruptcy court said that property in which debtor holds only bare legal title without any equitable interest becomes part of estate only to extent of debtor's bare legal title; estate acquires no equitable interest in property. The debtor’s transfer pre-bankruptcy of his bare legal title is not a fraudulent conveyance of anything of value to the bankruptcy estate. The bankruptcy case is, In re Moodie, 362 B.R. 554.

This case suggest that whenever a debtor who is on the title to real estate or a financial account funded by a parent or any other third party the debtor can and should remove his name from the legal title in the event that bankruptcy or lawsuits are immanent. As long as the debtor truly has no equitable investment in the asset the transfer can be defended and should not be reversed.

I was leaning toward BK being a good idea for us...but if it DOES mean losing the truck, resulting in ruining my marriage and relationship with my in-laws....then maybe not...all this seems so overwhelming.

[OhioFiler]

If the truck was a gift to your husband you may not have to treat it as community property. More research is needed.

Where is justbroke when we need him most?!

[lindsay2181]

Oh OhioFiler, thanks for the insight, there may be hope for us yet lol.