complicated question please help

[BCA2009]

I live in Georgia and lenders here can foreclose pretty fast from what I hear. My lawyer says I have to give them the $20,000 if we file ch. 7 since we liquidated the inventory. I have to do something with it before we file b/c we are getting back over $10,000 in a tax refund and $10,000 is all we can protect. I certainly don't want to give the $20,000 to the trustee but I can't settle this loan prior to filing bk b/c it will mess us up for qualifying for ch 7 since we are over the median income. Any other thoughts?

Giving up 20K to eliminate 150K of debt hanging over your head sounds like a good trade off to me. It sucks to hand it over, but considering you are over the median (but still pass the means test), I would not take the chance that your income/expense situation would change and then not be able to qualify.

[nichole04]

Please advise on the question

O.K. Here's the deal:

tax refund=$10,000 in bank
liquidated inventory=$20,000 in bank
Lawyer says I can leave $10,000 in bank & trustee can't touch it-unused homestead exemption since house is underwater
I need to do something with the $20,000
Inventory loan at bank collateral=house & all inventory+equipment
inventory loan matured 12/25/09 balance is $47,000

Do I have to give the $20,000 to the bank since the inventory loan was against the inventory which is now liquidated for $20,000 or can I put it into Roth IRA's or something else then try to settle the inventory loan after bk?
I live in Georgia. My lawyer has said that I have to put the $20,000 towards the inventory loan but I want to be sure prior to filing bk ch. 7.

House appraisal=$325,000 as of 1/1/10

1st mort=$321,000
2nd HELOC=$30,000
3rd mort=$83,000
inventory loan=$47,000 4th mort

not interested in doing ch. 13. Please advise. Also, how do I keep the bank from sending to foreclosure prior to filing in April? She says she can only hold it another couple of weeks or so. Is there something I can tell her to hold her off? She keeps asking for case # & I don't have one and wants to know when we are filing.

[newbie2]

If you want to go ahead and file now just to have the stress over and done with (and beat out the foreclosure filing) there is something else you can do:

You are exempting $10,000 and will have that after a Chapter 7. Pay your dad back his $3000 out of that money (if the trustee goes after the insider payment that was made almost a year ago).

[OhioFiler]

When did you liquidate the inventory?

[nichole04]

We liquidated the inventory in December and the money is just sitting in my business checking account.

[OhioFiler]

We liquidated the inventory in December and the money is just sitting in my business checking account.

I'll defer to the pros here but I think you'll be better off to give that $20,000 to the lender. If you had liquidated some time ago and continued to make your payments on the loan I'd say use whatever cash you have to secure your future via exempt investments.

[nichole04]

Thanks for all the info. I just can't wait until this is all over with!