Wedding Rings

[mom901]

In PA we can exempt up to 25k in exemptions, we are not close to that but have questions regarding the assets listed. Most are basic things that will be protected but the one that concerns me and worries me are my wedding rings. The value is priceless, they are beyond sentimental and must they be included? I don't like even putting them on at all or listing them. If they are put down then protected, is there ever an instance where they or anything else we are exempting is "not" protected? Or in a 13 are they always protected and no one can touch these assets you list? If it ever would change to a 7 can those same items all stay protected? We meet for our final review with the attorney next week but this is on my mind right now and I need some advice, or I am sure I won't sleep! Can I just not list them at all?? Is there some rule that says you HAVE to list them? We can still make changes before next week, please help.

[brokejoker]

You have to list all assets. The rings may be priceless to you but what are they actually worth? There may be a seperate exemption for jewelry in your state. In mine it was $1000. Whatever you paid for them cut it in half or even 1/4. Ever tried to sell a used wedding ring? Not much of a market for those!

If it's a half million dollar ring you may have to turn it over or buy it back from the trustee...

[mom901]

I just don't like them involved. In what case would we ever be in that the unprotected things are surrendered or not protected? I am confused about that part.

[LadyInTheRed]

If you exempt the rings under your state's exemptions and they aren't security for any debt, nobody can take them from you.

If you can't exempt them and file a Chap 7, the trustee can take them to sell for the benefit of your creditors. You would have the opportunity to buy them from the trustee. The trustee can also decide it's not worth the trouble and abandon the asset so you can keep it without buying it back.

If you file Chap 13 and can't exempt them, you can keep them, but your plan must pay back at least the value of the rings to your unsecured creditors.

[Fallonedward]

You have to list all assets. The rings may be priceless to you but what are they actually worth? There may be a seperate exemption for jewelry in your state. In mine it was $1000. Whatever you paid for them cut it in half or even 1/4. Ever tried to sell a used wedding ring? Not much of a market for those!

If it's a half million dollar ring you may have to turn it over or buy it back from the trustee...

ok, so my wedding ring was purchased 22 years ago and if I half the price of $900 we would only declare $450 or less...thanks good to know

[LadyInTheRed]

ok, so my wedding ring was purchased 22 years ago and if I half the price of $900 we would only declare $450 or less...thanks good to know

Another way to estimate value is to take the ring to a pawn shop and ask how much they'd give you for it.

[mom901]

It just holds so much sentimental value, it was designed for me. It is the only jewelry I really have, I also have a plain band I wear. Right now they just have listed miscellaneous jewelry, $3000. It is appraised for much much more but either way I don't want to ever risk parting with it. Don't gifts count for anything?? I asked today and the paralegal told me not to worry that it is listed like that and it is protected. It is not itemized. I just wish I could say zero, I really don't have any jewelry anyway. I just feel like I don't want to even include any because it could someday be gone but he says it can't, it is in the exemptions and it can't be touched. Is that true? Then what if you just say you don't have any jewelry?? He said they don't come to your house and look around, but I just don't get it. Am I being told the truth? When something is exempted and protected is that the bottom line or is there some double edged sword to that? Thanks.
This is all so traumatic, the whole thing, I just feel like the stress involved is unbearable. Wondering if they are going to increase my plan payment, wondering if there are going to be any surprises, etc. I want to think the lawyers are on our side but I feel uncertain. Do people really make it through the 5 years successfully?? It seems so much can happen in 5 years and it would be impossible.

[LadyInTheRed]

Take a deep breath and relax! You are being told the truth. If it's exempt they can't take it. Don't leave it off your schedules. That would be hiding the asset. If you don't list it, what if the trustee asks at your 341 if you have any jewelry? Are you going to lie? What if you say "no" and they see you're married and say "don't you have a wedding ring?" This might not happen even if you do leave the ring off the petition. But, why risk it? I have yet to hear of somebody having the trustee question the valuation of a wedding ring. It's not likely to happen unless you are in a certain district in Florida where the trustee does actually have appraisers go to debtors' houses. That is the ONLY place that ever seems to happen. Most people are never questioned about the values of their assets.

The trustee does not want to try to sell your wedding ring. It's worth a lot more to you than it is to anyone else.

Your lawyer is on your side. Have they given you a reason not to trust their advice? I'm not saying blindly follow. Everyone makes mistakes. Educate yourself so you can catch any mistakes. This is a good place to do that. It's possible the trustee will have issues with your plan and request changes. Deal with that if and when it happens. Ask your attorney questions if you don't understand something. If you still don't understand, ask more questions. You paid your attorney to work for you! They have nothing to gain in your failure. Despite what some may some about attorneys, most of them want to represent their clients well and have happy clients. Not only do they get personal satisfaction, but happy clients make good referral sources..

Check the Chap 13 forum and you will find people who made it through their plan successfully. Many people don't because, yes, a lot can happen in 5 years. Some convert to a 7 because of reduction in income. Some have a huge increase in income or get an inheritance and have their cases dismissed voluntarily because they decided they'd rather take care of the debt outside of the Chap 13. Others filed to stall a foreclosure or lawsuit and never intended to complete the plan. Some have financial difficulties that they don't communicate to their lawyers and their case gets dismissed for non-payment. Don't let that be you! Guard against the unexpected by living within your budget and saving whatever you can. When the unexpected does happen that raises issues that can't be resolved through the use of savings, contact your attorney right away to decide how best to handle it.

You are not powerless in a Chap 13.

[mom901]

Dear Lady,
Thank you so very much. If you were here I would give you a big hug right now. I am just so fearful and I am scared. I want to think that the bright side is we have a good firm, one of the most successful with 13's in the state and they have dozens of offices and that they are on our side. We really get along great with our attorney and paralegal but still we don't know all of the ins and outs. Also that we get to keep our home we worked so hard to build together next to my mom I care for and get rid of our back taxes that built up and at the same time have protection, unsecured that built up gets zero and in 5 years they will be gone. My family always told me live within my means and here I am in my 40's, married and in this situation. But on the other side it is all so scary, the fine print, the court, the trustee it all scares me for some reason that once we sign they control us and want us to fail so they make more money off of us or something. Meanwhile we will be scrounging to no end. We have been budgeting pretty well, we don't go out, we pack lunches, we live a simple life and care for our moms and our precious 6 year old. We are doing alright on cash now budgeting every dime and thinking carefully before every purchase, cutting back and trying to save here and there. If the plan amount changes it will kill us, I am fearful of surprises along the way. It seems too good that it would stay the same and it would be smooth sailing. I often think if they ask at our 341 about inheritances because someone mentioned that, but truthfully we don't know what is in our mother's will, can only speculate nor do we want to really think about it but if they ask we can just say we only know about being in each other's, mine and my husband's. How are you really suppposed to know about what a person has in theirs and why do they ask that? And also thank you Lady for making me feel better about my rings, and at the 341 I will be wearing my plain work band...

[LadyInTheRed]

Glad I was able to make you feel better. Good plan to wear just the band. I did the same thing even though I have plenty of exemption to cover an engagement ring worth 3 times what mine is worth.

I was concerned about my payment going up too. I had all kinds of scenarios in my head about what the trustee might object to. But, there were no objections and the plan was confirmed. The trustee didn't even ask about my unemployed non-filing husband! Things are tight, but we have a payment we can live with. That's pretty much how it's supposed to work. I credit the smooth confirmation to the fact that I have an experienced attorney who is known by the trustee.

I went on a camping vacation a week after the 341 and was completely out of touch for about 10 days. I got back and checked PACER to see my plan had been confirmed. On my first day back to work, my boss called me into his office to tell me I was getting a promotion and a small raise (about 2%), retroactive to April 1! I called my attorney and he said we didn't have to inform the trustee of such a small increase, but it's about $160 a month. So, I increased by 401k contribution and am looking forward to a extra hundred dollars of retroactive pay to put in my savings account. Hopefully, I'll have the discipline to not reduce the 401k contribution. I'm also in my 40s and really would like to retire in 25 years or so.

There are difficult times in a Chap 13, but there are good times too!

[mom901]

Lady, thank you... we are having our review with our attorney next week. How soon after that is the 341 and how soon after that are you confirmed, even though we start making payments next week? I hope there are no objections to our plan, and it is tight, but also I hope they don't raise our payment along the way. What reasons do you think they can do that? I just want to know that the payment we are told is the one to stick with and no surprises once I get in my mind how to budget things. We are on lockdown mode I call it, necessities only and have been that way for awhile. Hubby's work fluctuates with the seasons so it is all averaged but they said I can do some work when our daughter goes to school this year and just keep them informed. I will still be caring for my mom so it would be minimal, maybe some part time work anyway. I somehow feel we can do this and the attorney wants us to succeed but I am not someone who takes the surprises well. I just hear of so many horror stories of people in 13's and how the success rate is so low and that bothers me... oh and congrats on your raise

[LadyInTheRed]

Lady, thank you... we are having our review with our attorney next week. How soon after that is the 341 and how soon after that are you confirmed, even though we start making payments next week? I hope there are no objections to our plan, and it is tight, but also I hope they don't raise our payment along the way. What reasons do you think they can do that? I just want to know that the payment we are told is the one to stick with and no surprises once I get in my mind how to budget things. We are on lockdown mode I call it, necessities only and have been that way for awhile. Hubby's work fluctuates with the seasons so it is all averaged but they said I can do some work when our daughter goes to school this year and just keep them informed. I will still be caring for my mom so it would be minimal, maybe some part time work anyway. I somehow feel we can do this and the attorney wants us to succeed but I am not someone who takes the surprises well. I just hear of so many horror stories of people in 13's and how the success rate is so low and that bothers me... oh and congrats on your raise

Thanks!

The trustee would object to the plan and request a higher payment if he/she thinks your income is understated or that your expenses are unreasonable. The trustee will also object if the plan doesn't pay arrears on secured debt, priority debt and as much to unsecured as they would receive in a Chap 7 liquidation (the value of non exempt assets you are keeping). There could also be objections if he doesn't think your plan is feasible because your budget doesn't allow you enough to survive. If the trustee objects, your attorney will negotiate with the trustee and you will have the opportunity to amend your schedules and plan. Hopefully, your attorney has prepared a petition that will avoid any objections. As long as your petition is accurate and you can back up your expenses, you'll be fine.

My plan was confirmed 16 days after my 341.

[Fallonedward]

Another way to estimate value is to take the ring to a pawn shop and ask how much they'd give you for it.

Our attorney told us today that I would need to take the price I paid for my 22 year old ring and increase the amount for inflation so my ring would be worth about $2000 now. We stopped at a pawn shop tonight and they told me they would give me $300 for the ring...

So now I'm confused not sure what dollar amount to assign to it

[LadyInTheRed]

Don't take my word over your attorney's. Maybe it has something to do with the trustee.

After reading suggestions here to use pawn shop value, I asked my attorney if that would be okay and he said it would. It doesn't make sense to me to assume that the value of a piece of jewelry will follow the rate of inflation, especially a wedding ring. Current fashion trends will influence the value of rings according to their settings and stone cuts. But, I also don't think it makes sense to use NADA retail value to value cars and some trustees do.

If you can't exempt a $2,000 ring, maybe it would be worth it to get a professional appraisal.

[Hairy]

Basing present-day value on the retail price from 22 years ago doesn't make much sense. Your ring has some value for its precious-metals content (especially with gold at $1225/oz), and some for its design, but retail markup rates on jewelry are extremely high, and original-price-times-inflation doesn't take into account any wear on the ring, nor any personalization (engraving names/dates inside).

That said, the pawnshop is probably offering no more than a percentage of salvage value. The only time I saw one buying scrap gold jewelry off someone, they were offering less than one-sixth the value of the gold content alone.