Motion for dismissal possibilities..?

[moonflower]

I filed for a Chapter 7, pro se. I attended the 341 meeting. I only started the BK in order to discharge a bogus HELOC debt of $12k. I put in for a TSA job and I was declined because I had over $7500 in debt, but if it was discharged, I would be eligible. I cannot afford an attorney, but the HELOC company said they would work with me and lower the debt to 50% if I agreed to pay rather than go BK. I think this would work better for me. Does anyone know what the chance for a dismissal are? The stumbling block is a car that I claimed as exempt, but because my Dad has an imperfected lien on it, they want to sue my Dad for the exempt amount of $5000. I don't understand that either. I had to sign a promissory note and I have been paying $50 per month to him. Now he gets sued for doing a nice thing by helping out his son. Bummer. That's another reason I want try for a voluntary dismissal. Any help would be appreciated

[justbroke]

I filed for a Chapter 7, pro se. I attended the 341 meeting. I only started the BK in order to discharge a bogus HELOC debt of $12k.

This is not a good usage for Bankruptcy... just to get rid of (relatively) small amounts of debt. A Chapter 7 BK discharge is a powerful tool capable of discharging hundreds of thousands if not millions of dollars!

The stumbling block is a car that I claimed as exempt, but because my Dad has an imperfected lien on it, they want to sue my Dad for the exempt amount of $5000. I don't understand that either. I had to sign a promissory note and I have been paying $50 per month to him. Now he gets sued for doing a nice thing by helping out his son. Bummer. That's another reason I want try for a voluntary dismissal. Any help would be appreciated

First, let me reiterate here on BKForum again... that there is no such thing as a "voluntary" dismissal in a Chapter 7. Once you file Chapter 7, it takes on a life of its own. Especially uif there are assets to administer, and guess what? There are now assets to administer.

You made a classic mistake that most pro se debtors make. That is, not evaluating preferences and other property transfers that occurred within the look back period(s). The case with your Dad is classic. Now your Dad, or you, will need to pay the Trustee $5,000 because that's an "inside preference" and is "avoidable" (meaning the Trustee can recover the money for the creditors).

I don't think this case is going to be dismissed. You may as well follow it through at this point. That's just my opinion, I may be wrong.

[moonflower]

So what happens to the debt I owe my Dad? Does it become an unsecured debt? And if the value of the car is $5000, and exempt is $5000, how does that work? I am being told the vehicle will be sold and I will receive the exempt amount back? What if they sell the car for less?

[moonflower]

And what if all the creditors are paid? In this case the only creditor is willing to accept $6000. If I pay that, then no creditors will exist. What will the trustee do with the car.

[justbroke]

So what happens to the debt I owe my Dad? Does it become an unsecured debt? And if the value of the car is $5000, and exempt is $5000, how does that work? I am being told the vehicle will be sold and I will receive the exempt amount back? What if they sell the car for less?

it doesn't become an unsecured debt, because it is already an unsecured debt. Your dad never perfected a security interest in the vehicle. What State are you in that has a $5K exemption on cars, because I have never read about one. How did you exempt it on Schedule C?

And what if all the creditors are paid? In this case the only creditor is willing to accept $6000. If I pay that, then no creditors will exist. What will the trustee do with the car.

Doesn't matter what they are willing to "accept". In the bankruptcy concept, they will get everything that the Trustee gives them, up to their claim amount. So, now you're saying that you have not one credit card or one open account anywhere? That you only have this $12K heloc? This doesn't make sense. If it's a HELOC, was it on a property that is unencumbered by any other mortgages? What did you do with the "other" mortgage... redeem, reaffirm or surrender?

I'm not sure that you understand just who your creditors are. I think you have more than one, but you seem to believe that there is one and only one.

[moonflower]

I know who my creditors are. There is one and ONLY one. The one with the HELOC for $12,832. I owe NO other debt with the exception of my car which I owe to my Dad and pay $50 per month every month since Oct 2007. I have a 3 credit cards, but I paid it off each month so there are zero balances on each. I owed DELL, but I paid it back. Never late, not once with any of my debt. But I had one of those awful predatory, negative amortization loans. I only knew it was 4.25%, but I didn't know the underlying rate was 7.5%, so I was going backwards on the principal every month. The the mortgage company "recast" the note after 2 years because I exceeded 125% of it value due to a decrease in market values, and my payment doubled. I couldn't make the double payments and they would not modify. The purchase money HELOC was sold 3 days before the foreclosure, which was 12/09, and now it shows up as a revolving debt collection on my credit report. The only reason I applied for the BK was because I applied for a Federal job, and the $12,832 exceeds the $7500 threshold for outstanding debt. Now I'm worse off than ever. I got some bum advice and I'm kicking myself for it. Can I throw myself on the mercy of the court for being stupid. I think I'm hearing, there's no chance of a dismissal because they see the car as an asset because my Dad trusted me to pay back the note.

[moonflower]

I am in Idaho where the exempt amount is $5000, and went to $7000 on April 1st. I filed Mar 19, 2010, so my exemption amount is capped at $5000. I still don't get how my car can be exempt, but they are still suing my Dad for the exempt amount, which I get back anyway. Also, my Mom is on the title with me as "or". She paid for half the car, and I was paying my Dad for the other half the car. The only reason I was on title was because the insurance company said inorde for me to have insurance on the car, I needed an "insurable interest". So my Mom added me on title so I would be insured to drive the car. I had to sign a notartized note back in 2007 that said I understand the ownership of the car is my Mom, and I am only a registered driver. But the Trustee said "Too bad, So sad for your Mom."

[BobMango]

I know who my creditors are. There is one and ONLY one.

Actually, I don't think you do know. You have at least 2, maybe three creditors based on your statements. One is the HELOC, the others being your Dad and possibly your Mom. Just because you don't want to claim them as creditors does not mean the court will agree. You stated you have a promissory note with your Dad to pay $50 a month, and a note with your Mom as well. At the least your Dad is a creditor.

The trustee may be thinking you signed the note with your Dad to protect the asset. Say the car is worth $10K and you have a $5K exemption, there would be $5K of unprotected value there. If you have a lien for $5K as well, then there is no non-exempt value there. Trustees look closely at loans between family members for just this reason. So since your Dad did not perfect the lien, the trustee probably considers the car to be free and clear. If they think the car has more value than the exemption amount they will sell it and pay the balance to your creditors.

So if they take the car and sell it for $7K, you'll get $5K back for the exemption. The other $2K will be split between creditors based on the trustees calculations. In this instance your Dad may get $500 from the trustee or nothing at all. There is nothing that says you can't pay your Dad with the funds you get back for your exemption though.

[HHM]

Ok, this is the same question being asked in multiple threads, I am shutting this one down.

http://www.bkforum.com/showthread.php?t=55954