A couple questions about Ch. 7

[INrugger]

Hi, I am glad I found this forum. It's good to know I'm not the only one out there with these problems. I'm finding many great opinions and answers. Hopefully, one day I'll be able to share my own insights. But for now, I have a couple questions.

My wife and I have 58k in CC/unsecured debt. I lost my job in Sept. and we are planning on filing Ch. 7 in Jan. after our last card usage ages and our average income is below the means test limit. We talked to a lawyer but some help from people who have been through it would be greatly welcomed. We are in Indiana

Wife is self employed with a business partner. Can we do this without partner finding out? We can get business statements, earnings etc.

We had borrowed 8k from my wife's parents while her business was starting up. We paid them off (approx. 3k) with our tax return in the spring of 08. (we paid them off because they were our smallest total at the time) We had no idea we'd be moving towards filing 8 months later. We don't want to tell them we're filing either. This loan has no paperwork of any kind. Our bank account does show monthly checks to them but doesn't say it's for a loan. Since it's paid off do we have to list it? Will the trustee go after that amount of a payoff when we owe so much elsewhere? Is there an option for us to offer $1000 or $1500 on the spot instead?

Anyone know what happens if I get a job after we file? Does that change things regarding our filing?

Any help/advice you have would be greatly appreciated.

[JRScott]

I'd put at least 1 year between paying off her parents the 3k and filing. I'd postpone til at least Spring of this year. Yes they could go back and seek that as an insider payment. You'll need at least 1 year from that.

If you get a job after the 341 it generally does not affect your case. If you get a job between filing and the 341 it can impact the case in what is known as totality of circumstances. It would greatly depend on the job, expected income etc and isn't worth worrying yourself over now.

[frogger]

The business.... is it a partnership, LLC, S-Corp, C-Corp or what?

[INrugger]

It's an S-corp.

[frogger]

Wife is self employed with a business partner. Can we do this without partner finding out? We can get business statements, earnings etc.

No.

Your wifes part of the business is an asset that the trustee will be interested in. Since it appears that you're going to need to wait for some time before filing anyway, you might want to consider selling your wifes part of the business to the other partner.

If you do this, it MUST be for fair market value or more or you will have trustee problems.

The S-Corp has no exemptions, so you can consider it gone anyway. It is an asset that will most likely be liquidated. You may however, be able to buy it back at a fair market price.

You need to consult with a good bk attorney before doing anything with this. This one could be a big can of worms.