Chapter 7 Advice - Assets, Home Florida

[floridatimes]

Brief Overview:

Old real estate business transaction came back from the past to haunt me. Im getting sued in court from it and am curreytly in the final stages of a judgment being placed against me ($33k). Legal advise recommends that I declare bankruptcy since I am currently unemployed and am behind on my home payments by one year.

Assets: 1 - 2004 Car (Paid) Valued between $4500 Trade In - $9000 Retail (im not which value is used in BK to determine worth, one lawyer said auction, another retail)
1 - 2006 Motorcycle (Paid) Valued between $1500 Trade In - $3500 Retail
Home (underwater) Owe $300k valued by city tax appraiser at 150k.

Debt

Property worth 300k
Credit Cards worth 4k


Not sure how to estimate value for both of these..

Several lawyers have advised me the following:

Florida has a property exemption of $5000 and assets exemption I believe of $1000.

Lawyers have suggested that i use the $5000 on my homestead property in order to live in it till it forecloses which can be anywhere from 6 months to 2 yrs. They say that if i don't use the exemption on the property that the creditors on a rare circumstance can try to short sale the home and i can be out in the streets before i find employment or a new place to live with a 30 days notice. Notice that the property is not yet in foreclose, i only behind on payments for about 1 year and received a notice of intent to accelerate loan on 12/20.

Since I am claiming most of the exemption on my home, this leaves my car and motorcycle. $1000 can be used towards the value of these, but the remainder of the value I am told must be paid to creditors or turned in for them to sell. I am broke, thus the bankruptcy, and i cannot afford paying creditors between 5-8k of money that i don't have to save my car for which i will need for transportation for work.

This leaves me to my question:

1. Are the lawyers correct to use the property for the exemption instead of the car?

2. Would I be able to get a title loan on the car to help pay for my bankruptcy legal fees ($1800)?

3. What would be a scenario where i can do the bankruptcy without having to come up with all this money or turning in the car/motorcycle?

Thank you in advance for you advise.....

[floridatimes]

Assest Evaluation - retail value, trade in value, or auction value

[this is from another thread merged by the moderator with this one]

FLORIDA

Does creditors use the retail value, trade in value, or auction value for my car and motorcycle?

The car fax shows that the car was in an accident....can that be taken into account? thanks

[keepmine]

You need to figure out what those assets are worth. You got a $4500 spread on the car and $2K on the cycle. A realistic value would go a long way towards a suggestion.
Personally, I'd gamble on the home and use my exemption for the car.

[floridatimes]

Yes, that was another question I had on another thread. how to determine the value......one lawyer is using some kind of NADA Guide who then makes deduction off that price, others are using an average of retail with something else. So, im not sure if worth is based retail, trade in, auction value. My option is a a private appraiser report.

[LadyInTheRed]

FLORIDA

Does creditors use the retail value, trade in value, or auction value for my car and motorcycle?

The car fax shows that the car was in an accident....can that be taken into account? thanks

When you list your assets on your petition, you state their value. It should be what you could sell your vehicle for. An accident reported on carfax may affect the value. But, if you satisfactorily repaired the vehicle, maybe not. If the trustee or a creditor doesn't agree with the value you stated for an asset you exempted, they object to the exemption. Then you would try to come to an agreement about the value. If you can't reach an agreement, then there will be a hearing where you each provide evidence of the value and the judge decides.

I don't think I have ever heard of a creditor objecting to an exemption. It is usually the trustee who does that. It probably isn't worth a creditor's time given the amount any single creditor is likely to receive if a vehicle is liquidated for distribution to creditors. Different trustees use different sources for value. But, NADA and Kelly Blue Book seem to be most common sources used in bankruptcy. Using retail never makes sense to me, but some trustees do insist on using it.

[LadyInTheRed]

floridatimes, I merged your two threads because of the topic overlap. I want to avoid the confusion of having the same question discussed in two places.

[LadyInTheRed]

Florida has a property exemption of $5000 and assets exemption I believe of $1000.

Florida exemptions are at http://www.legalconsumer.com/bankrup...-law.php?ST=FL. Assuming that is up to date, if you don't use your homestead exemtion, you have a $4,000 wildcard exemption that you can apply to any property and a $1000 Motor Vehicle Exemption. There is also a separate $1,000 exemption for personal property. I don't know if you can use that for motorvehicles.

Lawyers have suggested that i use the $5000 on my homestead property in order to live in it till it forecloses which can be anywhere from 6 months to 2 yrs. They say that if i don't use the exemption on the property that the creditors on a rare circumstance can try to short sale the home and i can be out in the streets before i find employment or a new place to live with a 30 days notice. Notice that the property is not yet in foreclose, i only behind on payments for about 1 year and received a notice of intent to accelerate loan on 12/20.

This make no sense to me. If the home is underwater, the other creditors can get no benefit from a short sale without first paying off the mortgage. Why would you use an exemption for an asset you are going to lose anyway because in "rare circumstances" not exempting it might cause you to lose it earlier. Are you sure you aren't misunderstanding the advise you were given about this? Did the same advise really come from more than one attorney? Do they know you are underwater and a year behind? You say you are behind by "only" one year. That's pretty far behind. You are unemployed, so there doesn't seem to be any hope of catching up. I don't understand why they would recommend you waste the exemption on an underwater home that you are going to lose.

1. Are the lawyers correct to use the property for the exemption instead of the car?.

I'm not an attorney. But, based on the info you've provided, I don't understand why you would do that.

2. Would I be able to get a title loan on the car to help pay for my bankruptcy legal fees ($1800)?

You're unemployed. How are you going to pay off the loan? Without an income, you might not be able to get a loan.

3. What would be a scenario where i can do the bankruptcy without having to come up with all this money or turning in the car/motorcycle?

The attorney fees are unavoidable unless you file prose. Filing prose is not a task that everyone is ready for. I really don't recommend it for somebody who has non-exempt assets.

If you file Chap 7 with non-exempt assets, you have to either pay for them or risk the trustee taking them. If the trustee takes your car, but you exempt a portion of it, you will recieve cash equal to the exempt portion. You can use that to buy a less expensive car. It's also possible that the trustee will abaondon the car and let you keep it. You could file Chap 13 and pay the non exempt portion over your 36 to 60 month plan. But, it doesn't sound like you have income to fund a Chap 13.

I wonder whether bankruptcy is a little premature for you. You have no job and few assets to protect. After getting a judgment, the creditor can put a lien on your home and come after your non-exempt assets. Your home is too far underwater to worry much about that. Besides, being a year behind, it's only a matter of time before you lose the home. The creditor can't do any worse than the trustee as far as your car and motorcylce are concerned. They may not want to bother with those assets anyway. Judgment creditors usually are looking for cash assets rather than things they have to store and sell. Just keep whatever cash you have out of the bank. It may make more sense to wait to file BK after you have a job, have income to protect and can pay attorney fees. You may also be able to get into a payment plan to purchase your non exempt assets from the trustee.

As far as what method to use to value your car, use the method recommend by whatever attorney you hire. I suggest you consult with more attorneys and/or go back to get clarrification on why the attorneys you've already spoke to think you should use your homestead exemption on an underwater home you are going to lose anyway.

[LadyInTheRed]

Another thought about the homestead exemption. Did the attorneys really recommend you use the homestead exemption in your particular cicumstance, or were they just telling you the possible consequences of not using it?

[justbroke]

Another thought about the homestead exemption. Did the attorneys really recommend you use the homestead exemption in your particular cicumstance, or were they just telling you the possible consequences of not using it?

There is another thread asking more detailed questions. I have responded in that thread.

I am not sure that a (Florida) debtor could claim the unlimited homestead exemption on a property for which the debtor has indicated "SURRENDER" on the Statement of Intentions. It would be counterproductive. Therefore, I do not personally believe that you should surrender a homestead while claiming the homestead exemption.

http://www.bkforum.com/showthread.php?81513-Advice-of-Property-Exemption-Car-Home-Motorcycle

[bcohen]

I already answered this on your other thread: http://www.bkforum.com/showthread.ph...ome-Motorcycle

You should not file for bankruptcy at this time, as you have absolutely nothing to gain from doing so. In fact, you will probably lose more in Chapter 7 than you would by simply doing nothing, and taking steps to dodge the judgment creditor (basically making sure to remove any non-exempt funds in bank accounts NOW, before the judgment is granted). If and when you become gainfully employed again, and have wages to protect, that is when you should consider bankruptcy.

[floridatimes]

ok

[justbroke]

I have closed this thread because the original poster started a new thread with duplicate information. In order to preserve the posting history and not re-merge threads a second time, this thread is closed.


Please go here:

http://www.bkforum.com/showthread.php?81624-HELP-Homestead-exemption-Assest-Protection-Advice-%28Florida%29