Thinking about filing Chapter 7

[boulevardrt]

Newbie here thinking about filing Chapter 7. Have a few questions. Things just got really bad around here around the holidays, we just go served today and are being sued by Discover card, This was the last straw. We are behind on the house by alomst a month. Behind on the motorcycle payment by a couple of months. Like and idiot I went and bought a new Dodge Challenger RT the day after thanks giving am I in danger of loosing th car. My wife has a ford fusion. When the trustee comes in your house what kind of things are they going to take? I viewed some threads on here but cant seem to find any clear answers on this. I live in Central Texas can anyone recomend a good lawyer. Thanks!!

[pamkev]

First welcome to the forum. Your need to contact and meet with lawyers asap. I would start making appointments to meet with at least 4 to find one you are comfortable with. I don't know of any trustee that comes into your home to see what they can take. Others will be along to give you better advice.

Pam

[justbroke]

The bankruptcy Trustee doesn't just come and start taking things. What happens is that you complete a Petition for Bankruptcy and in that Petition you list what you own. Then you list your debts. You also get to use something called "exemptions" which allow you to protect property. Exemptions in Texas are different than exemptions in Florida, but the system works the same. You should be able to keep your cars, if you can afford them. This will remain true whether you file Chapter 7 or Chapter 13. The key is always affordability.

Texas generally has good exemptions so you should be able to exempt most of your personal property such as your clothing, household items, furniture, tvs, even livestock! They also let you keep 2 guns in Texas. The list is pretty thorough and I believe it would cover most median income families easily. It is highly unlikely that the Trustee would send an appraiser to your home unless you're in Florida, you have non-exempt property (usually unlikely), or the Trustee finds that your Petition is not the "whole" truth.

As suggested, you'll want to find 3-5 Chapter 7 attorneys in your area and get a free consultation from each. I would prepare a list of questions, like you have done here, that you can use during the consultation. The attorney will be asking about your income and assets (like home and cars) while you should be getting to know them!

[boulevardrt]

Thanks pamkev and justbroke, great responces!! Just curious as to why I should see so many lawyers? What is we go to the first one and like what we hear should we go to another one just in case.

[justbroke]

It's like buying a home. Sure, the first one may be THE one, but you should still look at the others!

[AngelinaCat]

Thanks pamkev and justbroke, great responces!! Just curious as to why I should see so many lawyers? What is we go to the first one and like what we hear should we go to another one just in case.

We too thought we were happy with the first and only attorney we saw. We were happy with her and retained her on the spot. Then, later on we found out how non-communicative she and her office was. We were trying for a Ch13, but had to go with a Ch7 after I lost my FT job. In between all of that, we had to wait several months for a yearly stipend paid in January of each year to fall off the radar.

In fact, her office was so NON-communicative, that when the trustee had an offer to make to us, he had to contact us directly, because the attorney was missing in action.

The lack of communication and education for us of how the BK process works, caused us to make many foolish mistakes in our BK, which cost us dearly.

That gives you the 'Reader's Digest' version. For more details, search on my username, toward April 2008. That is when we found and joined this forum.

[AngelinaCat]

I should add also that while the BK Code is composed of a *set collection of words*,--those words and how they are put together can be interpreted many different ways. That is why the term, 'legalese' was coined. You might interview five different attorneys, and those five might have a slightly different interpretation of what the words in the BK code mean.

Also, you would hope that the attorney you eventually choose, has a good relationship with the person who will be come your trustee. Several of our members have commented on how nice it was to have an attorney who was also, or had been a trustee.

[TheBajan]

We spoke to several attorneys and there where a couple that we REALLY LIKED. We didn't retain them right away and in the end, it would have been a disaster for us if we had. It wasn't until the last attorney we spoke with did we actually find out we had good, viable options to keep our property. Otherwise, we would have lost everything. Shopping around is always a good idea.

[keepsmiling]

Agree with the others.
We hired the first one we saw, then realized our mistake.
Def speak to a few. This is not like buying a pair of shoes
You will be in bed with this person for at least a few months (so to speak)... please pardon my terrible singing voice here
"my momma told me, you'd better shop around...."

[tobee43]

some of the questions you may what to ask the atty is bk the only type of the law you practice? what type of relationships do you have with the trustees in our district? how long have you been practicing bk law?

there are some firms that do more than one type of law.

i just thought it's best to seek a firm that specializes in bk if possible. not that that was a priority. we interviewed 5 attys and went with the youngest and most quiet atty, since we were tired of the loud mouth know it alls. while the firm was young they had excellent relationships with the courts and the trustees and were up and "coming" in the area. some attys we went to see didn't' een file electronically yet, and many of the courts don't like that. even our trustee who was an "older" woman only used her lap top at the 341. it was evenident at our 341 that there was in fact a relationship with our firm as they said they would talk about something over lunch. that works for me.

[bcohen]

Hi. I am also being sued by Discover (see my thread here under "Collections"), and to date, I have fought them back more than 3 months. Every step of the way. In fact, I am going to the courthouse today, to file my response to their motion for summary judgment. I figure if I can get the MSJ denied, it will be several months more before this thing even goes to trial!

My advice to you is do not sit back and let them get a default judgment. Depending on how long ago you defaulted on the debt, you may have a statute of limitations defense. Discover funds its credit products through securitization (i.e. it sells the debt in pieces to investors) and thus you can attack the suit on the basis of standing. Depending on other circumstances of the account, you may have additional defenses as well.

Most people--more than 95% of those who are sued--do nothing and go straight to default judgment and liens/garnishment. Of the remaining 5% who do anything at all, the majority file for bankruptcy. Maybe 1% take the first step of filing an answer to the suit. I can tell you this, because when I got sued, I checked the county court records here online, and browsed more than 1000 suits filed by the plaintiff, Discover Bank, for purposes of finding other cases where people fought back, so I could obtain the documents from the court, and use them as a template for my pleadings. Out of all the cases I viewed, only 14 or 15 people bothered to fight back.

I suggest you consider answering the suit, which will buy some time--at least another month--before the creditor can obtain their judgment, even assuming you do nothing else. Look online for information on how to prepare your answer, or check your county court's records for other cases filed by Discover, and write down the case # for cases where you see that an answer was filed, especially if other documents were filed as well.

Then go to the clerk and request copies of these case files (you will have to pay for this, and copies are expensive, so bring at least $100.00) and bring these documents home and read them carefully. Look for cases where the defendant was represented by an attorney, or where they successfully fought back the plaintiff. Copy the format carefully, using your own information and defenses. Then send (or serve) a copy to the plaintiff in accordance with your local rules of civil procedure, keep a copy for yourself, and file the original with the court. You will have to pay to file your answer, so again, bring money. It probably won't cost more than $100, unless you are being sued in superior court.

Then, after you have answered the suit to buy time, start thinking about bankruptcy. Some of your assets are not exempt, and should be spend on exempt items before you file, such as fixing up your house, stocking up on food/medicine, any deferred dental or medical care, etc. Some of your assets are simply not worth keeping, due to the fact that you owe too much, and/or the payments are too high. You may want to surrender the car you just purchased, and maybe the motorcycle as well. Likewise, if the house is "underwater" and you owe way more than it's worth, you may want to quit paying, discharge the debt, and live there rent-free for a while until the bank finally forecloses.

[tobee43]

wow bcohen that's a ton of brick and mortar work there!! an excellent way to do it if you chose that path.

i just wanted to add, if one is planning on a bk, it's not needed to really do anything other than the actual stall tactic, as really most all judgements can be vacated after the discharge of ones bk. and, while that may cost money, it's well worth it. even if one does slip by you, you can always file the order after your bk is completed. it's not cheap either, so if one can prevent them from happening it certainly is best.

some states you can do it right after the discharge, while, florida for example, you have to wait, i believe it to be a year. so it may vary state to state, but ultimately, you can get them removed permanently by court order, to me, always the best way.

[lillymarlene]

Thanks pamkev and justbroke, great responces!! Just curious as to why I should see so many lawyers? What is we go to the first one and like what we hear should we go to another one just in case.

I almost went with the first attorney I saw, since he was so friendly and easygoing. Luckily my boyfriend who had actually met this man in another setting, pointed out, "Are those necessarily qualities you want in a person who is going to represent you?" The individual I finally did choose, is not the friendliest, or most personable man in the world, but I just had a gut feeling he'd be the best for my situation. I'm now a little over 50% into my chapter 13, and so far so good.

This is a very important decision, so I agree with the others here. You might want to take a little time and carefully think through your choice.

[LadyInTheRed]

Then, after you have answered the suit to buy time, start thinking about bankruptcy. Some of your assets are not exempt,

It is very possible that all of OP's assets are exempt. Texas has pretty generous exemptions and allows the option of using federal exemptions which has a large wildcard if you don't need to exempt home equity. Whether they can afford to keep the car and motorcycle that are in arrears is another question.

I disagree that the OP should wait until an answer is filed to start thinking about BK. Yes, you should start preparing to answer the lawsuit. But, in the meantime you should consult with BK attorneys and decide weather to file BK. If you decide to file BK and there is no reason to delay, then there is no point in delaying the lawsuit when you can just stop it in its tracks by filing BK.

[jst4f]

The only thing I can thinkmof to add is to stop paying on all CC's as soon as you see the first attorney. As for the secured loans paynthse that you expect to keepnand let the others go.