Chapter 7, I'm Really Scared!

[jtallerie]

I live in Florida I wanted to file Chapter 13, I pass the means test for Chapter 7. I wanted to try to keep my upisde down house. I don't think that will be approved. I purchased my home in 2006 for 325,000, we used our life savings for the down payment, it is now worth about 200,000. When we purchased the house we were able to afford it until job losses/underemployment etc. I owe 22,000 in cc's. I mostly used them to eat & sometimes to keep my utilities on and at times paid car insurance with them. I never went out and bought luxury items with the cc's. I wish I could repay my debts, but I cant, we are flat broke! I am now earning 40% less than I used to earn.

Will a Trustee send someone to inspect my home in a Chapter 7. Am I going to have to hide my pots & pans or dishes? (my pots are more than 25 years old, Farberware) these posessions are valuable to me. I realize the exemptions are sooo low for personal posessions. Does anyone think that the court will try to take away my 15 year old used furniture? My daughter is going to get a computer as a gift for her HS Graduation from my parents. She will need it for College. Can the Trustee take it from her she is 17 years old.

I don't even own a big flat screne TV. My TV's are all more than 10 yrs old.

I do own 2 cars 1997 Ford with 175,000 miles & 2002 Ford Windstar 140,000 miles in poor condition car was just in an accident. We cant work if we don't have cars! We really cant walk to the grocery store where I live. Will a Trustee take away our cars leaving us with no way to work and make a living? Will a Trustee force us to be on Public Assistance? That is the reality of it if we lose the car's we could end up homeless.

We were once a "normal middle class family".

Should I prepare to put most of my childrens personal belongings in storage? My 17 year old daughter has a PT job and she buys her own clothing, will the Trustee take her posessions away from her. She had to purchase her Prom Dress herself and pay for her Prom ticket herself we did not have the $ for that. She is such a good kid and does deserve to keep her things.



Can someone give me advice?

[jlybean]

Hi I am sure someone with more experience and knowledge will reply to you but as far as your pots and pans and household things I asked my lawyer the same question (all our furniture and household goods are over 12 yrs old and have been kid tested and abused) He told me they wouldn't want that stuff. They only want anything that has any value so I think that your stuff is safe. Sometimes I wish they would come and take it but it would cost them more to haul it away than it is worth! LOL

Good luck with everything

[DeadManCrawling]

Jtal,

Step back for a moment, you are way to worried about this. No one is going to take away your belongings. Your children's belongings are THEIRS, not yours, and are not subject to the BK court, because your children are not filing. You are.

Florida has two districts that use appraisers, Central and Southern. If you live in these areas, you may have heard of people being appraised. I doubt you will experience this, yourself. Appraisers are generally sent when someone is filing CH 7 and is near or over the median income. It does not sound like you fit this criteria.

Look on this forum or elsewhere for FL exemptions, and you can get some idea about what is automatically protected. Keep in mind that most people imagine their belongings are worth far more than they really are. The average household probably has less than 2k in actual value. Thins like couches, tables, electronics, and such just aren't worth that much.

Some FL exemptions are not well known. One, for head of household income, is such an exemption, and can protect cash in the bank from the head of the household's job.

The auto exemption is tiny, but with the vehicles you list, probably not a concern for you.

I would caution you on one thing. Keeping a house that is that far upside down may not make sense, financially. Think very hard about this. I saw an estimate in the news last week that suggests FL housing may take until 2045 to recover to 2006 levels. This is insanely bad, and not a promising signal about keeping an upside down home.

Also, if you are not claiming the homestead exemption, your other exemptions go up by about 8k, if I recall right.

This forum is a good place to learn. Keep asking questions and running searches. Meet for free consults with some attorneys. Educate yourself, and I think you will be more comfortable with the process.

It is nailbiting and terribly scary at first. Once you understand that this is a process that is ultimately to YOUR benefit, you will be more at ease. You and your family will be better off after filing, as long as you understand how it all works, and how to use it to greatest benefit.

Good luck,

-dmc

[Chucksoutalu]

The best advice you will get is from a good lawyer and this site! People here have gone through what your goin through right now by the hundreds and thousands. Take a deep breath and relax, it will work itself out as long as you use the resources available.
The house may be an anchor you wont be able to hoist, just talk to your lawyer and look at what your options are if any. A clean slate is better than an albatross (the house) around your neck.

I am not a lawyer and my advice is just from my adventures in the dark realm of BK...........but be reassured there is light at the end of this tunnell. It is up to you.

Good Luck

[spetkovich]

Re: Value of Home Furnishings: The value you need to be concerned with is not the value you paid for them, its the value you could get for them if you re-sold them now. And we're not talking about if you really worked hard advertising, shopping around to different buyers, etc. It's the price you could get if you loaded everything up into the back of a pick-up truck and took it to a flea market to unload one weekend.

Most home appraisals I've seen are not just based on the debtor's income, but also based on the property. If you are living in a 3000 sq-feet condo in Sunny Isles, yet you list your only furniture as being worth $250, the trustee will probably be suspicious, for example.

Be careful with that $8,000 figure being thrown around. You can claim that in some divisions, but not in others. Try to claim the wildcard exemption while also keeping your under-water home, and the trustee will sometimes short-sale it on you to make a point. The Fla. SC is still out on the issue of whether you can claim the extra wildcard exemption for a fully underwater home, so until/unless they give the OK to do that, be very careful trying to pull that one out of your hat.

[DeadManCrawling]

spetkovich is right about the new wildcard. I, perhaps, didn't communicate my idea properly.

The new 8k exemption is only if you are not using the homestead exemption at all, meaning you either have no home or are surrendering your home.

Some have tried to use the exemption, and claimed it was valid, because their home was entirely underwater, effectively denying them the homestead exemption. I see the logic in this, but as spetkovich notes, this issue is still being decided in the courts.

Speak with attorneys, see what they have to say. But don't lose any sleep over it. BK is not set up to ruin you and take all your stuff. It might seem that way at first, but that is usually a preconception that creditors WANT us to believe. So we are scared to file in the first place.

Good luck