Perils of being an asset case?

[keptdigging]

I'm gettiing sued and (subject to attorney advice) starting to believe that my best course is probably to just go ahead and file rather than worry about delaying the suits.

This would mean that I won't have spent my assets down to below what I can exempt and I'll likely be an asset case.

My house is under water (worth less than mortgages), allowing me to use California System 2.

My worries about this:

1. While the case is being administered, am I at risk for losing my home if real estate values improve? A year is a long time to worry about this.

2. Will this delay my access to other exempt property. I'm unemployed and hoping to live off of exempted cash and retirement funds.

3. I get a sense that "being an asset case" just creates more opportunity for things to go wrong. Any truth to this?

Other than these worries, I don't have any problem being an asset case. I'd much rather get on with my life and be free of worrying about lawsuits, means test, and all the other complexity. And while Chapter 7 isn't a solution for unemployment, my current worrying about creditors and making sure I don't run afoul of Chapter 7 requirements has become a full time job. I think I'll do much better when I can focus all my energies on finding productive work.

[lrprn]

1. While the case is being administered, am I at risk for losing my home if real estate values improve? A year is a long time to worry about this.

When you file Ch 7, your bankruptcy estate is set on the day you file. What happens to your property values after that doesn't matter.

2. Will this delay my access to other exempt property. I'm unemployed and hoping to live off of exempted cash and retirement funds.

Cash that is protected by exemptions is yours to use. However, you need to be careful liquidating retirement funds during an active Ch 7. This removes those funds from their protected status until you are discharged, so is worth having a conversation about this when you interview 3-4 experienced bk lawyers in your area during your free initial consultations. It should be fine since it's after filing, but it's worth confirming that to be absolutely 100% sure it's ok. I hope you are able to find employment soon!

3. I get a sense that "being an asset case" just creates more opportunity for things to go wrong. Any truth to this?

It's true that Ch 7 asset cases tend to last longer than no-asset Ch 7s because the trustee has your 'stuff' to liquidate or get payments for that need to be turned over to your creditors. As far as more things "going wrong" if you're an asset case, while it's true that asset Ch 7s can be more complicated than non-asset cases, it doesn't necessarily lead to more things going wrong.

Retaining the right lawyer to protect your interests and file a good Ch 7 that the trustee can't fight has far more impact on things going smoothly in Ch 7 than whether you are an asset or no-asset case.

[AngelinaCatHub]

If your assets are mainly currency, then you can put this into an IRA or other retirement instrument. If you attempt to live off of retirement funds, and you are taking the funds out before they are mature (age 59 1/2) those become assets and are attachable to your estate. Don't liquidate any retirement as it is protected.

We were an asset case in stuff we owned. We had the opportunity to purchase it back from the estate at a lower value than it's worth and 12 payments no interest. We did that but of course you are not closed before that obligation is met. 'Hub

[keptdigging]

I'm "young" (in my mind) at 51. And I know to absolutely positively NOT liquidate any retirement funds pre-filing (and yes I will ask attorneys about after.)

I did read a case somewhere where a court ruled that since your real estate is part of your bankruptcy estate, appreciation technically belongs to the estate. This was evidently a real issue back in the boom.

Thanks for the good wishes on employment. But here's the thing: hopefully I'm not on the path to losing everything but I want to MAKE SURE I lose the debt. Debt free = hope!

Oh and 3-4 experienced attorneys? All 3 that were recommended to me have been impossible to connect with. No confidence I'll be able to find access to that much experience. I'm worried that things are really clogged and that it means there's going to be a long time from filing to the magic 341 date (and I know that it is much better if the hope for "positive change in income" comes AFTER the 341.)

So my lack of confidence in being able to find an experienced attorney is going to have me asking a lot more questions here. But I realize there's no substitute for years of actual contact with actual trustees in one's local district.

[DeadManCrawling]

We were/are an asset case.

We have a vehicle that could not be exempted, with no lien against it.

Our discharge came when expected, just like any other CH 7. However, we will be held as an "open" case until all claims are in and paid. That doesn't mean, though, that the trustee is able to keep coming back to the well, so to speak, if our other circumstances change while awaiting this final liquidation of the car. We are subject to the same types of things as others, such as inheritances, lottery winnings, and so on.

But the existence of an asset does not really affect you in any larger sense. It is sort of its own case at this point, sequestered and handled separately.