Theoretical BK

[Dannmcg357]

I would like to post amy BK situation for the experts to pick apart:
Chapter 7, Alabama with allowable exemptions 6k, filling married
Have attorny, above median income but pasted means test.
Assets:
13k in stocks
4k in CD's
Land and Mobile Home 191K owed, no equity/under water, surrendering
2002 truck, no lien, valued approx 5k
2003 car valued approx 4k, owe 4k
2001 SUV valued approx 7k, owe 2500
1998 Truck valued approx 3k, owe 2k
(these values are approx based on Kelly Blue Book Trade)
Have a tax liability of about 3k
Mortgage in a rears, have rented house and moved out
Will file in about 30 days.
Have to keep both trucks. I guess I am wondering what one would expect in the above situation.
Thanks.

[HHM]

We don't do hypothetical's.

[StartingOver08]

Are you sure about the values of your vehicles? They sound a little high to me.
Alabama's exemptions are very small too http://www.legalconsumer.com/bankrup...law.php?&ST=AL

Check the link to see what is available, but it looks like you have zero auto exemption and all of your exemptions have to fit into a $3000/person wildcard exemption which is your initial statement of $6k.

This is why you need to speak to a knowledgeable attorney for your specific district.

[keepmine]

The CD's and stocks are gone unless you have them in an ERISA qualified account.
That's a lot of money to leave on the table. Why the rush to file? Why not spend some ofthis down if, it can't be exempted?

[Dannmcg357]

I am worried my mortgage company will sue for judgement of defiency, in fact I am sure they will as fast as they can. So, lose 15-16k to bankruptcy estate or be sued to 135k? not much to think about.

[HakunaMatata]

Mortgage deficiency judgments aren't guaranteed and if they do occur, they don't happen overnight. My lender, for instance, initiated a one year moratorium on DJs in April.

I understand your thinking to an extent. If you undoubtedly knew you were going to be subjected to a $135k DJ (that couldn't be negotiated), the $16k non-exempt BK loss is easier to digest. It's frustrating to not have clarity; and, I struggled with this as well. If you're basing BK exclusively on a POTENTIAL deficiency judgment, please explore this further. I wouldn't want you to surrender cars, stocks, and cash unnecessarily.

[Dannmcg357]

Very good advice HakunaMatata, Thank you. It seems I often rush into a decision and regret it. I am diligently trying to research all options here. I can't afford the home and don't want it, if I surrender it and they foreclose, will I be able to BK if they sue for DJ say 6 mo to a year later? Forget asking them to cooperate in anyway, its out of the question.

[HakunaMatata]

If you go through the foreclosure and are later subjected to a DJ, yes, you can file BK (see, you have a back-up plan)! I don't think you should file BK solely to free yourself from your house. Of course, if you're struggling financially and have debts (aside from your mortgage), BK may be a great option for you.

There are numerous factors lenders consider when determining DJs. The article linked below discusses them (bear in mind, the focus is on DJs -this doesn't mean they occur with great frequency).

http://online.wsj.com/article/SB124104990739271023.html

[keepmine]

File on your terms-not your creditors.