Looks inevitable... Help!

[WhatDoIdo]

I searched through several hours worth of threads and found bits of similarity, but nothing really close to our current situation---my search skills must suck :

My wife and I own 2 homes (1 owner occupied in Nevada & 1 inherited rental home in California, both currently "upside-down") and have 2 leased vehicles. These are current.

In April 2011 I received a salary reduction.

In May we surrendered an RV, which subsequently sold at auction for ~50% (owe ~$50k after auction). We tried to negotiate several months before stopping payments, to no avail.

We are currently in debt to the IRS for ~$5k. This is paid monthly and is current.

We have ~$30k in credit card debt. We stopped paying ~3 months ago, tried negotiating to no avail.

I think we earn too much money to pursue a Chapter 7 bankruptcy.

I currently play in a band to supplement our income.


Questions:
Who determines the value of assets?

Are there exemptions in Nevada?

Does Chapter 13 require repayment in full, or an agreed upon amount?

Will we lose the rental house (inherited family home)?

Will items purchased with credit need to be sold/returned/surrendered?

I have more questions, but my stress headache is preventing me from recalling them all...

Any advice?

[debee]

I think we earn too much money to pursue a Chapter 7 bankruptcy.

You can file for chapter 7 even if you make over the median for your state. What's going to be the determining factor is your disposable monthly income on Means Test. When we were first considering bankruptcy, we made too much. We took the Means Test and it showed that we would have to file a chapter 13. We then researched the issue, adjusted our budget within allowed parameters, and then voila! we still made just as much, but we now qualified for a chapter 7. So don't give up yet.

You can see what the median income is for your family size and do a trial means test here.

Who determines the value of assets?

Normally, you do. For household goods, use garage sale pricing. Since the properties are upside down, you can use Zillow or similar service. If the trustee questions those values, she can have them appraised. If you had equity, it might be advisable to get a CMA, BPO or professional appraisal beforehand. Your lawyer can advise you better as to what the norm is with your local trustees for someone with your income.

Are there exemptions in Nevada?

Yes. Roughly 1/2 million for a house, 15K for a car, 12K household goods, 5K art/musical instruments. See them here.

Does Chapter 13 require repayment in full, or an agreed upon amount?

It depends on your disposable income. It can be 100% or even 0% to unsecured.

Will we lose the rental house (inherited family home)?

You mean the inherited family debt.

If the house is upside down, why would you want to keep it?

Will items purchased with credit need to be sold/returned/surrendered?

If you purchased items on a store card, the store will have a lien on them. It's very uncommon for them to ever pick up the items. What is more common is for them to make you think they will pick up the couch (or whatever) unless you pay them something. Dirty little trick.

If you bought unusual items (like 50 ipods that you intend to resell on ebay) or if you bought big ticket items (like a flat screen TV, bedroom set, livingroom set, etc) and then promptly stopped paying and/or filed bankruptcy (without a "triggering" event), then you may have some issues with your creditor objecting and that could mean having to sell items in order to settle with that creditor. However if this sort of thing is present then you may also have issues with "bad faith" that would bring your whole filing into question. Otherwise, you get to keep what you can exempt.

You might want to go in for some free consultations with local bankruptcy attorneys.

Meantime, welcome to the forum!

ETA: Some people quit their part-time jobs before filing in order to reduce family income.

[AngelinaCatHub]

First, welcome to the best advice on Earth but your own lawyer. We will attempt to aid you. You are with "Family".

I searched through several hours worth of threads and found bits of similarity, but nothing really close to our current situation---my search skills must suck : You're normal.

My wife and I own 2 homes (1 owner occupied in Nevada & 1 inherited rental home in California, both currently "upside-down") and have 2 leased vehicles. These are current. Then I assume both have payments on them.

In April 2011 I received a salary reduction.

In May we surrendered an RV, which subsequently sold at auction for ~50% (owe ~$50k after auction). We tried to negotiate several months before stopping payments, to no avail. It is non secured debt. That is good.

We are currently in debt to the IRS for ~$5k. This is paid monthly and is current. Stay that way. If you file they will force you to stop paying. Pick up again after.

We have ~$30k in credit card debt. We stopped paying ~3 months ago, tried negotiating to no avail.

I think we earn too much money to pursue a Chapter 7 bankruptcy. Let your lawyer determine that.

I currently play in a band to supplement our income. Are you good? LOL.


Questions:
Who determines the value of assets? Your state or the Fed exemptions. Mostly your state.

You also determine and always devalue them at what you would pay at a yard sale. BE HONEST.

Are there exemptions in Nevada? Of course. Google them.

Does Chapter 13 require repayment in full, or an agreed upon amount? This is determined by what circumstances that you may have. Again educate yourself by reading all the "stickies" and a good book from Nolo press, the C7 book download.

Will we lose the rental house (inherited family home)? If it is in your name, has a collateral value, and you are in C7, probably.

Will items purchased with credit need to be sold/returned/surrendered? This depends. If on credit, they are secured, and, you do not wish to have them, yes. If a revolving charge (CC) then no. Just DO NOT charge anything at this time. NOTHING!!!

I have more questions, but my stress headache is preventing me from recalling them all... Get used to it as it will get only a bit worse, until you make up your mind. Then, your stress will be lifted and at every step it gets better.

Any advice?

Chill a bit. You are one in many who have and more to come. How's Hope and Change working for you?

You will do fine and are among many who have succeeded in the "NEW START". Start living the new start now. Throttle back now and be prepared to liquidate the 'toys'.

Best to you and I will follow your progress. 'Hub

[LadyInTheRed]

Welcome to the forum, WhatDoIdo!

I think we earn too much money to pursue a Chapter 7 bankruptcy.

Are you sure about that? Your income alone does not determine whether you qualify for a Chap 7. Have you tried the means test calculator at http://www.legalconsumer.com/bankruptcy/nolo/ ?

Questions:
Who determines the value of assets?

You do initially. You determine the value of your assets and list the values on your petition. If the trustee thinks you are undervaluing any assets, you will have to support the values and the trustee may get their own appraisal. Your attorney will advise you on how to value your assets. You might just use Zillow values for real estate, but may also have to get a market analysis from a real estate agent or a full appraisal. For cars, kelly blue book, edmonds or nada values are usually used. For your other miscellaneous property, garage sale values are usually appropriate, unless you have collectibles or expensive jewlery.

Are there exemptions in Nevada?

I believe all states have exemptions. Some allow you to use federal exemptions, but not Nevada. You can read about Nevada's exemptions at http://www.legalconsumer.com/bankrup...-law.php?ST=NV

Does Chapter 13 require repayment in full, or an agreed upon amount?

You pay all of your disposible income to the Chap 13 plan. You continue to pay secured creditors your monthly payments during your Chap 13 (either directly or through your plan payments), unless you are surrendering the property securing the loan. If you surrender the property and it isn't worth enough to pay the debt, the creditor can file a claim for the deficiency and that claim gets paid as unsecured debt. Your unsecured creditors get paid whatever is left after paying secured creditors and attorney fees included in the plan and the trustee fee. If you have any non exempt property, what is left for the secured creditors must be an amount that is at least equal to the value of the non exempt property.

Will we lose the rental house (inherited family home)?

If it doesn't pay for itself, you probably will. But, if the rent covers the mortgage, insurance, taxes and maintenance, you can keep it.

Will items purchased with credit need to be sold/returned/surrendered?

Only if they are security for the debt. Some store credit cards have clauses that provide that anything you buy is security for the debt. But, I have yet to hear of a creditor actually coming to take somebody's used TV or furniture.

I have more questions, but my stress headache is preventing me from recalling them all...

Any advice?

Take a deep breath and try to relax. Things will get better from here. You've come to the right place for information and support. But, this forum is no substitue for an experienced attorney who can review all of your financial details and give you specific advice for your unique situation. Keep asking question here, but also make appointments for free consultations with a few experienced BK attorneys.

[AngelinaCatHub]

LOL. I sure can't beat 'debee' in response. Must be the age thingy. 'Hub

EDIT: Add on, or Lady in Red. LOL

[LadyInTheRed]

LOL. I sure can't beat 'debee' in response. Must be the age thingy. 'Hub

LOL. You are both faster than I!

[debee]

LOL. Three of us simu-typing. Too funny. Well, at least WhatDoIDo will feel welcome, trust the advice since we all gave about the same and have a better idea of WhatToDoNext.

[WhatDoIdo]

WOW! Thank you all! It's almost as if the same person answered the questions, but changed the wording a bit

The family home has sentimental value, has a low monthly payment, and rent covers all expenses. I would like to retain it.

Do the leased cars get taken back? Do they count towards assets?

I checked the Nevada Bankruptcy Lawyer page using the links at the top of the page. There are 120!!! Is this just a generic listing of those that provide the service, or an "endorsed" list?
What constitutes a good lawyer? (oxymoron?) <----sorry, trying to have something to smile about. Seriously, comfort, trust, coldly analytic, cheapest?

[keepsmiling]

Make appointments with a minimum of three attorneys in your area who are experienced in Bankruptcy. Read up a little more here, then go have some free consultations once you know what kind of questions to ask. You'll either know when you have the right one or you can come here and tell us about them, and get more guidance.

[debee]

Do the leased cars get taken back? Do they count towards assets?

You can give the leased cars back if you want out of the contract. Any penalties/fees/etc would then be rolled into your discharge. Or you can elect to keep making your payments. Trustees only seem to care if the payments are high or you're leasing luxury brand. Then there might be some issues.

You only have to exempt what you have an ownership interest in & usually only if it has some equity.

[holycowe]

Welcome to the forum. You've found the best place to start, this forum.
By the way, I'm your next door neighbour!!! Filed last month and done with 341 and so far so good on the record. Over median income as well and did qualify ch. 7

[mountanddo]

By the way, I'm your next door neighbour!!!

Literally? or Figurativly? LOL

I was actually wondering if maybe someone I might know would be on this board since it is the only one I really found that has a great discussion forum!

[WhatDoIdo]

We have found an attorney we are comfortable with and have an appointment after the new year. Looks like inevitable Ch13 with our income.
I have a couple of questions, based on some of the attorny(s) advice we received:
-Is it OK to max out IRA (457 and Roth) contributions?
-Are ESA exempt from "seizure", if so, is there a max contribution?
-Advised to expend available current assets on home improvements, kosher?
-Divorce?
-Move out of current home into an apartment and rent-out current home, do-able?
-Do trustees waver from the federal spending guidelines?

Thanks for any replies!
-

[WhatDoIdo]

thought of some more:
W4 currently at 4, can I bring it to zero?
the attorney says most legal fees will be added to the final payment plan, is this ok?

[keepsmiling]

Divorce??? You mean as a strategy? Why would you do that? Was that part of the plan before the bk???
That will NOT simplify anything and if you are only doing it to save money, DON'T. This actually does come up here from time to time as a possible strategy; never a good idea for those reasons, tho.

As to tt's waivering, that depends. If you can prove actual expenses, then it may not be an issue. Depends on what you are talking about, though; and there does seem to be some variation. Your attorney should know what's what in your district.

As to home improvements--- what exactly did you have in mind?