Obsessing

[MomIcantFindmy]

There are only three attorneys in my area and we have retained one with a small retainer fee. (I am not opposed to changing attorneys). We retained so that we had a attorney to fall on if things got ugly with our creditors.

We have two assets we would have to surrender. Car that my daughter drives (worth about $5K and owe nothing on it) and a property worth about $4K (if one could sell it). All other assets are covered under state exemptions. We would reaffirm secured autos in chapter 7.

Family of 4

We fail means test by $10,000 a year.

I looked at chap 13 BK cases filed last year. Judge is very favorable to creditors. Noticed plans where judge ruled $49 for internet is not allowed also $200 for health care is not allowed. Various other things I consider essential not allowed.

We stopped paying creditors in September/October. Recieved notice that we are being sent to outside collections or attorney in our area Jan 15th. That is the only creditor we have heard from. Unsecured total $90K, Secured total $30K

My questions:
Does trustee and judge look simply at numbers (income)?

If we put the car money into retirement account would they want me to take it out and give it to the creditors?

Does the date I file decide the number of family members?

If we dont care about the property and sell the car and live off military retirement does that effectivly make us judgement proof? (atleast as far as creditors getting anything).

[woeisme]

I would say that the idea of having your husband quit his job to get you to a 7 makes sense from your point of view, since it is the difference between a CH 13 and a 7, and once the 7 closes, he could look for work again. I think it would probably depend on your husband's age whether or not the BK judge would look at it as fraud or not, since there is a rule against quitting a job just to declare BK. Do you also work? How old is the other child that's not about to turn 18? Could be justified for him to be a stay at home Dad for this other child if he/she is young. (or, not to help you lie or anything, if the other child is also a teenager, maybe he/she needs someone to be at home before and after school for some reason, so hubby had to quit job to "supervise" this other kid for some reason?) Of course, if you are a stay-at-home Mom, I don't think this is going to fly unless your hubby has some really valid reason (other than lowering your income below the median!) for quitting his job, be it medical or whatever, or unless he's really retirement age (not military retirement age which can start as young as 38 after 20 years of service).

A question I have, are you willing to pull the other child out of school to move into a different state to live with relatives while this all happens? Are relatives willing to take you in? If they do take you in, and don't charge rent, you need to be careful that the trustee doesn't still try to force you into a 13 because you now have more than $100 a month disposable income, therefore qualify for CH 13 even despite the fact you are below the median.

[keepmine]

I think it would probably depend on your husband's age whether or not the BK judge would look at it as fraud or not, since there is a rule against quitting a job just to declare BK.

There is no such rule.
In general, I've never liked the idea of quitting a job just to file bk but in your case, it has merit since, with the military retirement, you have health care benefits.
I'd go for it. You don't say if you work but, pension income is exempt from creditor seizure so they'd get nothing in a lawsuit and if you move in with realtives, you should be hard to find.
I think prior to filing, I'd rent a place to show that expense in your budget has been established prior to filing-along with utilities.

[FreshLikeADaisy]

Would anyone care about husband taking sabatical or does trustee and judge look simply at numbers (income)?

If we put the jeep money into retirement account would they want me to take it out and give it to the creditors?

Does the date I file decide the number of family members or can the judge make us a 3 person family after we have filed?

If we dont care about the timeshare and sell the jeep and live off military retirement does that effectivly make us judgement proof? (atleast as far as creditors getting anything).

Does my idea of the employment sabatical even sound logical???

This is just me, and I'm not a lawyer, but I don't think your husband's unemployment will be an issue. There are many, many unemployed people in the bk system (I am one of them) and from everything I have heard, it would just not be questioned. BUT, don't let him quit the day before you file! And YES, it sounds logical, if you can do it and still keep a roof over your head.

A better option might be taking a leave of absence, especially if there are any health related issues, or anything that might qualify you for FMLA. FMLA is *definitely* not going to be questioned; you have to provide proof of your qualifying circumstances to get the leave to begin with. Google "FMLA" for more info on that. Woeisme had some good pointers on why your husband may have chosen to take time off, if it ever comes down to it.

The judge will probably never even see your case in great detail; in Chapter 7 they pretty much take the trustee's recommendations and sign off on it. There are definitely exceptions, but that's pretty standard. Different from a 13 where a judge is much more involved.

Your bk is based almost entirely on your circumstances *on the day you file* and the previous six months to two years, depending on your trustee. If you file as a three person family, and your daughter turns 18 the following month, not a big deal as far as I know.

Once you put your cash into a retirement account, the bk court can't touch it, but do this as soon as possible, again, not the day before you file.

It's not that the things you are thinking about are wrong, it's that you REALLY want to structure your moves so that it doesn't look like you set it all up JUST to declare bankruptcy. It is not illegal to strategize and plan for bk, but you don't want to give the trustee the idea that you had assets, you just didn't feel like using them. Now, whether that is true or not and to what extent, I leave between you and God. Just don't give the trustee that idea. You want to steer very clear of anything that might smack of fraud or abuse of the system.

As far as the judgement proof thing, I don't know what your assets really are of course, but from what you wrote, yes, you'd be technically judgement proof. BUT, be careful that a creditor doesn't get a judgement anyway and try to seize that exempt income. Yes, money in an actual retirement account (not just regular checking or savings) is safe, but a bank doesn't know the difference between a checking account with exempt funds in it and a checking account with non-exempt funds in it, so be very clear on the difference, because the bank will be. Once a creditor has a judgement, they can levy your accounts and then it's on you to try to get that money back. So be very careful to know if you have any judgement activity occurring, and takes steps to live as much cash-only as you can.

If you move in with relatives, get a P.O. Box so that you can continue to receive mail (and thus be notified of impending judgements) and keep a prepaid cell for personal calls, so that your relatives don't have to take your calls. If the creditors figure out you're physically there (via skip trace, etc) their phone will never stop ringing and you just don't want to do that to them.

So me, I think you have a good plan, just start moving and arranging now and plan to file in 3-4 months. Getting some free atty consults wouldn't be a bad idea either. Good luck!!!

P.S. You mentioned North Florida; if you are filing in Jax you may find it interesting to read through some of Judge Funk's decisions on the Middle District website. Look for anything that has the word "fraud" in it.

[One Half Full]

maybe a back problem?

[Minnymouth]

Quitting a job, selling off assets (to put money in retirement fund) could be considered fraud when you go to file bankruptcy. Especially if done within 6-12 months of filing bankruptcy.

Also changing states, and moving in with relatives (saving money - few expenses) could still put you in a Chapter 13....

THINK, the fact that you have already QUIT paying your creditors, now you want to sell car and put funds in retirement account, and now will quit job prior to filing bankruptcy...... THIS WOULD RAISE MANY red flags for the Trustee to search...

Normally they would only go back 6 month (180 days) BUT a Trustee has the power to go back 2-5 years looking at your financial records if he wishes.

There's nothing wrong with trying to protect your assets, BUT you don't want to give the idea of "fraud" to the Trustee..... and your actions would.........

Is the daughters car in your name? Paid for? Does she live at home still?

Isn't it better to have ALL YOUR DEBTS DISCHARGED and loose a little money on a car, then to be dismissed for trying to hide a small asset (auto).....

Besides, if the value of the auto is not much (sold as market value), you could purchase the auto from the Trustee at cost.... and keep it.....

You take your chances when you start trying to hide assets and sell them before filing. Its not illegal to do so, but it sure can cause you a great deal of problems when you file. Problems that could cause your case to get dimissed. Then your stuck with ALL THE DEBT and no way out!!!

Keep us posted...................

[MomIcantFindmy]

We have another option I guess.

Filing 7 on 1 July. Surrender the car.

We don't have a lot of great "stuff" the house has always been decorated in Early American Poverty but much of it is kids stuff and stuff from their childhood in the 8 states we have lived in. So I will keep an inventory but I doubt the trustee will want much.

If we can find a place to live here for about $550 a month as of March 1st that would solve the "live with family issue" that might put us into a Chapter 13. Big "if" here and the part that scares me the most. I have a vision of us living in a crack neighborhood at that rent range. 6 month lease is up then 1 September and BK should be closed soon after. We either leave the state at that point or try to tough it out one more year to let child finish high school.

If we can't find a rental then we still have the option of leaving the state and moving in with family. Ugggg......I don't do well with "if's".

[silverlotus]

All cases filed after 1/1/08 are allowed certain expenses without question. A search for "amended means" would give you some posts about it.