Questions on What to Do Before Filing, from a Newbie...just joined today

[MBeach222]

Any help with these questions would be appreciated. I live in Florida and lost it all in real estate and then my biz dried up. I lived for a while paying bills and mortgage by credit card, which was stupid, but...

Some background:

$550k mort on primary res,
$95k in home equity LOC,
$220k in mortgage deficiency from a rental propoerty I sold short last month,
$100k in personal credit cards
$50k in biz credit cards in my 1-person LLC S-corp home-based biz
$8k on a car that is worth about that much, which I plan to keep even if I have to pay


Questions:

1. Does the trustee or anyone else look at my actual credit card bills, the actual individual purchases I made? Or just look at the total debt? Will they question what I bought at Walgreens or why I ate at a specific restaurant.


1a. I am using my credit cards (the ones still working anyway) as I would normally. Nothing luxurious, just household spending on groceries, restaurants, utility bills, etc. When should I stop using them completely? Or do you live normally up until the day you file?


2. I plan to surrender my primary homestead residence, since I owe twice what it is worth. When will I need to move? Immediately, or do I wait for the bank to foreclose and actually evict me? If the latter, any idea on how long that can take after CH7?


3. I am single with no dependants or others living in the home. The state exemption says the "head of family" can make $500 in wages per week. Does this apply to me, a single guy with no family? Or not? I am trying to determine how much I can safely earn prior to filing without jeopardizing CH7.


4. I am self-employed. Besides my tax returns and bank statements, will I need to provide anything else to document my income? I am asuming that when a client pays me by check, I can hold it for a few months before choosing to deposit it into my bank.


5. The banks have stopped sending me statements for credit cards and mortgages. How do I determine the actual amount I owe? I assume they are tacking on fees and interest every day, but not sending me a statement to show how much...


6. In Florida, there is a $1000 personal prop exemption. What does this include? My fridge and washer? My couch? Books? Household junk? Or just monetary assets like money in my account, cash, jewlery, etc.

How new can my PC or TV be without them coming after it? (I'm not looking for a text book answers about what they "could" do -- but some real world experience about what they "actually" do. FL residents a plus, but I welcome advice from all.


7. How do they treat paypal, or do they?


8. Do they actually take what you bring with you to the meeting? Has anyone had their cellphone or car taken at the actual trustee meeting?


9. If the trustee wants to take an asset or drain a bank account, how do they do it? Right there, write them a check on the spot? Or over time?


10. Is pre-paying my home owners condo association fee a good idea, or not a good idea? I am current on that and plan to keep paying them without falling behind.


11. Should I make an IRA deposit now? Or can that hurt me? I know the IRA is protected, but does it jeopardize other thigns by blatantly doing it now rather than paying the trustee?


12. I have about $1000 in my checking account. What is the best way to protect it?


13. Lawyer choice: the big "mills" who file a thousand BK's a day? Or the little guy who understands each case?


Thank you for any input. I very much appreciate.

[newbie2]

I can answer a couple of your questions, but not all of them as Florida exemptions are different than my states.

1 a) If you know you are filing for bankruptcy stop using your credit cards now. If you keep using them until you file expect a challenge to the discharge of those debts.

2) Your mortgage lender has to go through the same legal foreclosure process of your state, with some added time for you with the bankruptcy automatic stay. Each lender is different in how long they take to start the process. Some just a few months (the 90 day mark of missed payments) others we have heard here take years.

3) I don't know what you are looking at as far as "head of household" exemption, but I suspect it is in regards to garnishment laws and not the BK income standards for a Chapter 7.

4) If a client owes you money today that is income (a receivable). IF the client gives you a check today it is income, whether or not you deposit it. Don't try to hold on to a check to keep a BK trustee from knowing about it. It will backfire on you. When you sign your petition you are swearing everything on it is true (income, assets, etc). Be honest about your income and receivables. As a sole proprietor the trustee will want to see a balance sheet of some kind: Income, expenses, receivables, etc. If you do this quarterly just provide copies to your attorney.

8) That would be rare. If you can't exempt something you usually know about it ahead of time, and can make arrangements either to surrender the item to the trustee or pay for it to keep it.