Chapter 7 asset amounts

[HKK]

Hi, I’m from N. California.

Hi, I’m new to this site, and it’s been a gold mine for information.

I’m probably going to file for BK7 sometime towards the end of the year or in January and will probably being calling my creditors within the next couple of days to give them the news. I have a lot of anxiety about doing this however.

My attorney said that, with 703, I can protect up to $26,500 of assets. He also said the wild card is currently at $23,250. I’ve looked at various internet sites and have been unable to find the current listing of the exempted asset amounts. Are the numbers above accurate? Does anyone know of a link that shows the current asset $ amounts (for 2012)?

I’ve used a couple of credit cards to pay for fuel within the last 6 months (averaging $200 month). Should I make the payments for these purchases prior to calling creditors? If I should pay, how far back should I go, 3 or 6 months worth of purchases? I just want to be fair to them and keep them from contesting these purchases at the 341 meeting in order to allow this process to flow smoothly, and without incurring extra attorney fees.

Thanks for your help and advice.

HKK

[justbroke]

First, I would trust my attorney is using the correct California System I or California System II exemptions. Since you mentioned a "wildcard" amount that is over $20,000, then your attorney is probably using California System II. The current rates for California Exemptions in 2012 can be round here or at the URL Below. By the way "703" is the section of the California laws which related to System II. System I would be Section "704". Additionally, the rates adjust automatically based on inflation so that is why they change.

The wildcard is technically $1,175, plus, in System II, you get the "unused homestead exemption" ($22,075) as an additional wildcard to make the total wildcard... $23,250. So, I would say please trust your attorney.

When it comes to payments on credit cards, you shouldn't be making payments if you don't have the money. In most cases, it's a complete waste of money. Since you are represented, you should ask your attorney, but they'll probably tell you the same thing... it's a waste of money. So ong as you had been paying prior to the stop in payments, it will not be a problem. Typically, creditors are looking for thousands ($4,000+) in recent charges and/or on luxury items or cash advances where you never made a single payment. If that's the case, they are going to sue you anyhow and small token payments aren't technically going to matter. Additionally, charges that you made for food, gasoline, and any other "living" expenses are generally not seen as "luxury" items and not subject to these types of creditor attacks.

You are likely to see NOT ONE creditor at your 341 Meeting. They generally do not ever show up. The only ones that typically show up are jealous or vindictive ex-spouses or family, and the occasional local credit union (or small bank). Even when the local small bank shows up, it is typically to get pictures of the car and/or to ask about reaffirmations. (Ask your attorney about that.)

You are represented, so you should relax and let your attorney worry about these things. They are usually (in 99% of the cases) not even a factor and you will end up needlessly worrying.

http://www.courtinfo.ca.gov/forms/documents/exemptions.pdf

Legal Consumer Exemptions for CA http://www.legalconsumer.com/bankrup...-law.php?ST=CA

[kawh]

Can't answer your question about assets, but your attorney should know; of course you should confirm it on your own before retaining anyone.

There is no advantage, and lots of disadvantages to contacting your creditors, unless it's a business bankruptcy. We consumers can be treated harshly when trying to be upfront about bk plans.

I scrupulously paid for all of my purchases in the 9 months prior to bk, and had three cards I used for day to day purchases, paying each one off completely before filing. My bk consisted only of older BTs. The cards I paid completely, and did not bk? They repaid my thoughtfulness and responsibility by closing my accounts after I filed.

So what should you do? If you feel a moral responsibility to pay off your purchase, as I did, and it will not cause you hardship when you have no credit available, to have paid these recent charges, go ahead and pay them. Otherwise, I would not, and wish I'd not paid the small charges (from $50 - $100 monthly) I did pay.

A CC is not going to do an AP over recent charges of $200 or less, and will close your account regardless of whether you pay or not.

[lillymarlene]

Hi, I’m from N. California.

Hi, I’m new to this site, and it’s been a gold mine for information.

I’m probably going to file for BK7 sometime towards the end of the year or in January and will probably being calling my creditors within the next couple of days to give them the news. I have a lot of anxiety about doing this however.

My attorney said that, with 703, I can protect up to $26,500 of assets. He also said the wild card is currently at $23,250. I’ve looked at various internet sites and have been unable to find the current listing of the exempted asset amounts. Are the numbers above accurate? Does anyone know of a link that shows the current asset $ amounts (for 2012)?

I’ve used a couple of credit cards to pay for fuel within the last 6 months (averaging $200 month). Should I make the payments for these purchases prior to calling creditors? If I should pay, how far back should I go, 3 or 6 months worth of purchases? I just want to be fair to them and keep them from contesting these purchases at the 341 meeting in order to allow this process to flow smoothly, and without incurring extra attorney fees.

Thanks for your help and advice.

HKK

Hi, I agree with other people here, the last thing I would do is give my creditors a heads up on what I was about to do, even in a business bankruptcy. You would be giving your creditors a chance to rush in and file lawsuits. To get balances before I filed my chapter 13, I remember calling some of my business creditors for the amount due, but was purposely vague about "what I was going to do for them." Then also it usally makes no difference on consumer credit cards, if you are current or even paid off, they will usually be closed.

Well good luck in whatever you decide.

[HKK]

Hi, First I’d like to thank all of you for responding and for you advice.

I have another dilemma. I recently applied for a home modification loan and will be making the 2nd of 3 trial period payments today. Once I have successfully made the 3rd payment they’ll send me the final DOCs to sign. Should I wait to file BK7 until after I sign docs, or would it even matter? I wonder how they (the creditor, that I’d need to list) would react? Any thoughts about this?

Also, since this process (w/ the home Mod loan) will probably take another 6 to 8 weeks, I’d have to deal with the creditor phone calls and perhaps them taking other actions against me, since it’s been 2 months since I’ve made any payments. My attorney told me that if I call them and tell them I’m doing a BK7 through him, then they’ll stop calling, but could they still action against me with their attorneys until I actually file, which would be about 2 months from now?

To hold off the creditors from taking action against me would making $10 (or whatever) payments keep them from doing that, and letting them know I'm currently in a tight financial situation?

What is your advice?

Thanks you again………All the best to you

HKK

[justbroke]

There is no reason to pay creditors even token payments (of $10). If that is not what is due (past due), then it won't matter as they will still take whatever actions they feel necessary to collect. As for telling creditors that you are filing, most don't care that you "are going to" file. They only care when you actually file, so the "threat" isn't much. Your attorney is offering for you to divert their calls to his/her office, but that (and saying that you are "going to" file bankruptcy) does not stop the collection activity... although it may slow it down.

You could tell your creditors, without admitting to owing them, simply that you are having financial difficulty and you will not know for another 4-6 weeks what your situation will be. That may get them off your back or may encourage them to call more. I can't tell you.

As for the modification, it really depends on what type of modification it is. If it is in-house, every indicator that I have is that they would stop the trial period and rescind their offer. If it's one of the government programs (HOPE, HARP, HAMP, whatever they want to call some other program) then I believe they can continue the trial through the bankruptcy. However, there may be other requirements and modifications are "really" up to the lender.

Your home must be underwater at this point. The real question is how far is it? If the lender is going to do a principal reduction, then you really need to review all this more with your attorney. If that opens up equity, then you may be eating into your 703 exemption. If your home is more than 10-15% underwater, and there will be no principal reduction, the question is why try to keep it? Lots of financial questions remain for you. You really have to determine what your end game is at this point. What do you hope to achieve and what your expectations are in the long run. Remember, if you're asking for a modification to make the home more affordable, then you already have financial issues with the home. The question is, what's the long term prospects of keeping the home. (Noting that you should not even think about reaffirming that debt.)

[Pjmax]

Hi HKK, first if all, welcome to the forum.

I am not as wise as the above experts, but I can relate my experience. If you stopped paying on your credit cards a few months ago, token payments aren't going to help you and it's throwing money away. It doesn't matter what they tell you on the phone, they will continue to try and get you to pay up in full. There are different opinions on calling them at all. Since your attorney said it's okay to refer calls to him, you may just do that, but until you've filed and have a number, it may not help. You may have to endure the phone calls until you file. There are lots of posts here on what others have done to live with it. Google Voice is very popular. It's not likely any creditor will take action in the next two months, but if they do; such as seek a summary judgement, your lawyer should be able to quickly file your BK and stop it.

I understand how you feel about trying to be 'fair' and paying what you can, but you won't get any 'bonus points' for this. It sounds like you (and your family?) can't afford to do this. Save the money and pay your lawyer, where the money will go to good use. This does not make you a 'bad person.' The decisions you make from here on should be looked at as 'what will make the most financial and legal sense', not 'I feel I need to be fair to the credit card companies.'

I can't comment on the mortgage mod, but I do wish you well on this if you want to keep your house.

Now, go relax and enjoy the day, life goes on, and your fresh start will be here soon.

[HKK]

Hi, I really appreciate all of you for you time and advice – it’s priceless.

My situation is this: I’m looking to reduce my expenses as much as possible, and if there’s an opportunity to save a buck I’ll use it, as I did with the home Mod loan. I applied for it and got it, and I’ll be able to keep an extra $200 in my pocket for the effort (providing the BK7 doesn’t foul it up) – that’d be a savings of 72k for a 30 yr loan. And, in projecting the future (worst case scenario), and considering the downfall of the building economy, and being as that I’m a landscape contractor, I think it would be wise to file for BK7 now instead of later, while I still have enough cash to see me through BK7. I don’t want to wait till the last buck is gone. With that all considered, I’m filing because my current average income won’t meet my creditor obligations (if I were to pay them) after about 4 months. But it’s the rainy season and I probably won’t get back to work for about 6 months. That’s all in a nutshell.

There’s a lot of finagling that I have to do with my money, the timing and so forth, prior to pushing the start button, in order to maximize a most positive outcome. I plan on prepaying a lot of expenses (e.g. insurance, food, clothes, IRA, etc.) just before filing. I hope that I can accomplish this within the next 6 weeks without any complications from the creditors.

Any further advice / opinions would be much appreciated. Have a wonderful Thanksgiving and God bless you.

Thanks you again………All the best to you

HKK