Selling an asset before filing?

[jimisbroke]

I have some stock in a private company that may or may not be able to be sold at the time I am planning on filing. Right now, it cannot be sold per the company lawyers, however that will likely change. Even if we were able to sell it and pay down our cc we would still be left with about $25k in cc debt which is alot for us. So my question is, if it can be sold can we legally do so and spend the money on living expenses, fixing up cars, dental work, etc? And if so, do we need to wait a certain amount of time between the sale and filing?

[HHM]

Essentially yes to all your questions.

With private company investments, you need to delve into the shareholder agreement. Often times, there will be bankruptcy provisions regarding what happens to the stock (e.g. automatically re-vests to the company). Also, what are the restrictions on sale. Keep in mind, the trustee only inherits whatever rights you have; if you cannot sell, neither can the BK trustee. So, this may be a non-issue, but you need to get a hold of the shareholder agreement and pay your bankruptcy attorney to review it to determine what would likely happen to the stock if you filed bankruptcy.

[AngelinaCatHub]

Clap, Clap, Clap, HHM. This I did not know. Very good info. 'Hub

[btbeme]

As an addition to already terrific advice above - even if you were able to cash it, I would advice against paying down debts unless you know that will prevent you from having to file BK. Paying down credit cards and then filing would likely invite the Trustee to sue the credit card companies for the cash you paid them. Using proceeds to purchase living expenses and exempt items is a better choice if it comes to that.

Also, that windfall would count in your 6 month income loopback, so if you WERE able to get value for the stock, it would likely mean a wait of several months, minimum, and maybe the better part of a year before you could file (depending on a number of factors).