BK 7 or Judgment proof

[rmab46]

I live in Arizona. I am disabled and only recieve VA disablity and SS disabiity. We do own a home but are upside down by 100K and own 2 cars but are upside down on those as well.

Since I will never be able to work which would be best. File for BK7 which I already started and I am eligible due to the means test or let it ride and go through with the judgment and inform the creditor that I am disabled and even if they did come after me they could get nothing

Would should I do?

RS

[JRScott]

You say you already started the BK7?

If its already filed let it run its course.

[kenshirley]

We are retired and so called judgement proof as you call it.
But once that money is in an account, usually required for deposit, it's at risk.
Yes an attorney can get it back after some time and money you will have to pay him but why have to worry about it?
But do you really expect to stay in your home, keep your cars and not pay for it?
I am a bit confused. Being disabled (me too) does not give you a free ride in life.

[HHM]

Being judgment proof is not a solution. It may be "reality" (i.e. creditors cannot get any money from you for now), but its not really a "solution" to debt. There is always some risk with a judgment, and you need to take into account lifestyle, dealing with constant collection activity, etc, is not really an enjoyable way to live over the long term. Dealing with collection activity over the "short term" may be needed. I only recommend someone go the judgement proof route (if you can call it that) temporarily. For example, if someone is unemployed and has NO means to pay their regular bills (rent, food, utilities etc), then I will not recommend a BK until they are at least able to pay their minimum living expenses.

If you are disabled (sounds like this is a recent development for you), time to get your financial life in order.

[rmab46]

confused

Being judgment proof is not a solution. It may be "reality", but its not really a "solution" to debt. There is always some risk with a judgment, and you need to take into account lifestyle, dealing with constant collection activity, etc, is not really an ejoyable way to live over the long term. I only recommend someone go the judgement proof route (if you can call it that) temporarily. For example, if someone is unemployed and as NO means to pay their regular bills (rent, food, utilities etc), then I will not recommend a BK until they are at least able to pay their minimum living expenses.

If you are disabled (sounds like this is a recent development for you), time to get your financial life in order.

I agree totally. I have given the lawyer a deposit and that is it toward the bankruptcy. He said I do qualify for chapter 7 but I am worried the judge would look at what I recieve in VA disability and then SSD and turn it into a Chapter 13 in which I will have no money at the end of the month to pay all my bills.The problem is my wife only works part time (25 hours a week) and she get a total of $600.00 per month but we are on the rocks so I am affraid when they count in her money they see I have enough money then we get divorced and I am stuck holding the bag

[kenshirley]

I am not sure in your case for the income on disability. Mine is not related to disability and that came after retirement.
But I am almost certain that your income does not count as income for the BK. IF that's true I am not sure how you would be forced into a 13.
Ask your attorney to be sure.

[rmab46]

Ssd

I am not sure in your case for the income on disability. Mine is not related to disability and that came after retirement.
But I am almost certain that your income does not count as income for the BK. IF that's true I am not sure how you would be forced into a 13.
Ask your attorney to be sure.

I am finding that Social Security disability is not counted as income on the means test. I also know that they can not garnish SSD or VA disability. I might keep talking to my lawyer but leave my options open. He told me I qualify for chapter 7 but after all the paperwork is done and if I am told they are going to convert it to a chapter 7 I am going to drop it and just go to paper checks and become judgement proof whhich I am

[kenshirley]

OK, but you are in for a rough road ahead.
Take my word for it.
You will find that you are going to spend $ trying to protect your money or assets.
Anything you own outright is going to be fair game.

[floridian]

i agree, if you can get a 7, be done with it....
however, i can not see much difference between a 13 and being on criminal probation, except they call them trustees and not probation officers..

[kenshirley]

And let us not forget that the trustees get a percentage of that money that is paid monthly for managing things.
That is why I waited 4 months to file the 7. I did not want to live under the trustee's eyes all the time and have no money left.
I just had to wait until our income fell off enough to make it a Chapter 7 filing.

[rmab46]

own

OK, but you are in for a rough road ahead.
Take my word for it.
You will find that you are going to spend $ trying to protect your money or assets.
Anything you own outright is going to be fair game.

I agree, but I own nothing outright. I am going on planning to file the chapter 7 paperwork and from what I am told by the lawyer he can play around with the expence number and make them work in my favor. Just don't want to get hung out so if an emergency happens in the family or something goes wrong with the house I would not have money to pay for it

[rmab46]

lawyers

And let us not forget that the trustees get a percentage of that money that is paid monthly for managing things.
That is why I waited 4 months to file the 7. I did not want to live under the trustee's eyes all the time and have no money left.
I just had to wait until our income fell off enough to make it a Chapter 7 filing.

I guess that is what the lawyer is for. He says he should be able to find some more things to write off. Also I have been reading that if you get only SSD and VA disability they can not be taken by the government so hopefully things will work out

[rmab46]

money

And let us not forget that the trustees get a percentage of that money that is paid monthly for managing things.
That is why I waited 4 months to file the 7. I did not want to live under the trustee's eyes all the time and have no money left.
I just had to wait until our income fell off enough to make it a Chapter 7 filing.

I don't have the luxury of waiting to see if my income goes up or down. I only get VA disability and SSD so that is it. I know for the means test SSD is not included but the VA disability is. Even so I fall below the line for a house of 3 so I meet the criteria for a BK7. The lawyer will have to look at the guidelines for expenses per month and figure out where I stand

[kenshirley]

If you are under the means for your area expenses don't come into bearing.

[HHM]

If you are under the means for your area expenses don't come into bearing.

That's not true. If your schedule I & J show disposable income even if you are under the median, the trustee can still require dismissal of your 7 or conversion to a chapter 13.