Business Bankruptcy...Please Help

[Dancey]

Hello everyone. I am a newlywed who is filing for bankruptcy becaue I business I began in 2005 is just not working and we are having to close our doors. (Obviously not that simple, but we don't have to get into details) I have about 38,000 of debt I am filing on...33,000 is business related. Becase the business was sole proprietor I am not allowed to just file on the business, I have to declare my personal cards as well. OK, here come the questions...
My husband isn't on any of these accounts and is not part of these procedings, but we do have one join savings account with about 1100 dollars in it? Will they take that? What about if that is money we are going to use to pay attorney expenses? That is the plan, and I would hate for them to take the money we set aside for attorney costs. What do I do?
2.) How many of you have actually had them come to your home and take your things?
3.) I own a home on my own, I have renters and the mortage in always on time, there is very, very little equity in the house and the appraisal value is low. Do they typically try to take the home?
4.) When I left my inital meeting with my attorney he said don't go out and buy anything big, you or your husband. Well, over a month went by and we didn't file. My husand looked at how much we were spending on gas one day with my gas hog of a jeep and he went out and traded it in for a new gas efficient car. It is not in my name at all, but will this hurt us?

5.) Finally, my grandma gave my husband and I a loan back in November to pay off some medical debt we had from a surgery my husband had. We were paying here back from my checking account each month. For at least three months now we've stopped doing that and only give her money from my husbands account or cash. So...will the trustee come after my grandma for the money that we paid to her? I don't know why they do this, but my attorney said that they could sue my grandma for the amount that we paid to her. Please explain and advise.

Any help would be grately apprecaited. It seems that these proceedings take about 4 months, is that right? Thanks again.

[CindyLou]

I think the most important thing to know first, is if you are in a community property state? What state do you live in?

Second, you mention " little equity"....how much equity do you have? What is your loan payoff, and what is you appraisal?

Once you give that info we should be able to answer more questions.
Thanks,
Cindy

[Dancey]

Reply

I live in Ohio. I purchased the house in 2005 for 77,700. The payoff is about 73,500. It was appraised when I purchased it for 82,000 (which was obviously in a different economic time than now.) I've changed a few things on the home...but when they appraised it they only drove by, so what I've done is on the inside not the outside...not sure how they can get a good feel for it's value by just doing a drive by, but none-the-less this is what happened.

[keepmine]

Using money in a bank account to pay a lawyer is an acceptable use of funds. In fact, your lawyer won't file until he/she is paid. Nobody is coming to your house to seize anything.
Your husband trading in a car is no biggie since he's not part of the bk proceeding.
Your other 2 issues could be important. Do I understand you to say this home you own is being used as rental property? If so, the trustee could look at the totality of the circumstances and force you to give it up if they thought it would free up enough dollars to fund a Chapter 13 plan. That's a question you need to ask your lawyer.
Your payments to your grandmother could be seenas preferential-you are paying an insider at the expense of other creditors.
How much did you borrow and how much have you repaid per month?
Are you still paying the cc debt?
I'm also confused about the statement you may be filing a business bk as well. Why? Just file a personal bk on the debts you guaranteed and let the business die a natural dearh.

[Dancey]

Using money in a bank account to pay a lawyer is an acceptable use of funds. In fact, your lawyer won't file until he/she is paid. Nobody is coming to your house to seize anything.
Your husband trading in a car is no biggie since he's not part of the bk proceeding.
Your other 2 issues could be important. Do I understand you to say this home you own is being used as rental property? If so, the trustee could look at the totality of the circumstances and force you to give it up if they thought it would free up enough dollars to fund a Chapter 13 plan. That's a question you need to ask your lawyer.
Your payments to your grandmother could be seenas preferential-you are paying an insider at the expense of other creditors.
How much did you borrow and how much have you repaid per month?
Are you still paying the cc debt?
I'm also confused about the statement you may be filing a business bk as well. Why? Just file a personal bk on the debts you guaranteed and let the business die a natural dearh.

Thanks so much for your reply. The business was under my name, just a seperate EIN number, so I do have to file personally and for the business. I just meant that I would have liked to just do the business without my personal finances being touched, but that is just how it is.
As for the load from my grandma, she gave me $10,000 and my husband $7,000...so we wouldn't have to pay taxed on the gift since you pay on anything given that is over $10k. Since she divided up between us it was clear. I have been paying her between $250 and $500 a month. The last check that I gave to her was probably February. To date I have paid her a total of 2,500 dollars. My lawyer told me to start having my husband pay her. Will I be responsible for coming up with that money?
As for the house, my mortgage is $605.00 a month and the renters are on a month to month basis and pay $550.00. They could leave at any time and don't even cover the cost of the full mortgage. What do you think?

[keepmine]

I think the house likely is in jeopardy since, you aren't getting enough rent to cover the mortgage and it's not in your best interest to keep it.
I'd agree with your lawyer. Let your husband repay your grandmother his portion.Nothing in the bk code says you can't repay anyone you please once the bk is discharged. Once that's done, you can make repayment arrangements. Your lawyer may well recommend you hold off filing for another few months just to put more distance between the last payments to your grandmother and the bk filing.
What sort of income do you have? How many in the household? How much does your husband make? His income will have to be disclosed. Of course, the debts and bills he's responsible for will be backed out. Just part of going through the means test.

[Dancey]

I think the house likely is in jeopardy since, you aren't getting enough rent to cover the mortgage and it's not in your best interest to keep it.
I'd agree with your lawyer. Let your husband repay your grandmother his portion.Nothing in the bk code says you can't repay anyone you please once the bk is discharged. Once that's done, you can make repayment arrangements. Your lawyer may well recommend you hold off filing for another few months just to put more distance between the last payments to your grandmother and the bk filing.
What sort of income do you have? How many in the household? How much does your husband make? His income will have to be disclosed. Of course, the debts and bills he's responsible for will be backed out. Just part of going through the means test.

Well, the house is current on all payments, I've just been making up the difference. I didn't include my grandma in the bk because we never signed anything and if need be I could have her just gift us the rest. We just wanted to pay her back, but can do that after we file.
There is myself, my husband and we have his son 50% of the time as well. I make 20,00 a year(888.00 p/m before taxes and 645.00 take home) My husband gets overtime a lot and has to take it (forced overtime) so each month is different - but he is supposed to make 45,000 a year but really makes about 60,000...I think his bring home is 2,000 p/m so before taxes it's probably something like $3,200. According to our credit counselor we don't make enough to cover our bills...with almost I think it is $1,000 shortfall per month.

[southernbelle]

I filed chapter 7 due to a sole prop. business and my only comment is regarding the gift from your grandmother. You say you didn't want to include grandma in the BK and didn't sign anything and she gave you $10k and your hubby $7k. If your intentions are not to disclose this to the atty or Trustee, make sure you don't have a paper trail (did you cash the check or deposit it into your bank acct)? Because if you are required to provide bank statements for a year prior to filing (which may be the case because a business is involved) then you might have some tough questions to answer later if that money turns up in your account from November.

Just trying to save you some grief. In my case, it's just better to disclose everything and let the chips fall where they may because my BK is too important to get it dismissed for non-disclosure.