Scared to file BK now! Will they take everything?!

[FortHoodTX]

Hello all, new to the forum! I am a Texas resident. I've read that Texas has some of the most lenient laws for keeping property under a Chapter 7 bankruptcy. Contrary to the thread title, I know I won't lost "everything".

I know there's a $30,000 limit on personal property in Texas, but can anyone tell me exactly what to expect? I'm planning on voluntarily surrendering the car I have a loan on. My second car (will become my primary) is worth $10.5k– I own it outright.

If you come into my home (I do not own the home) and assess my property, you won't find $30k worth. I believe it's substantially less. 2 firearms, which I know are exempt.

What do you think the trustee will want to take? I have 2 computers (essential for work), Playstation, XBOX, 65" LED TV, 88-key synthesizer... my electronics are obviously the thing I'm worried about. Would it all simply be exempt because the aggregate fair market value is under $30k?

Please advise... I feel overwhelmed by credit card debt and bankruptcy seems like the appropriate thing to do right now, but I feel sick just thinking about them raiding my house to take what they want.

I have had a lawyer consultation but haven't retained her yet. I'd love to hear from a variety of sources who aren't just trying to sell me something

Thanks in advance, all.

[AngelinaCat]

Hi FH:

Welcome to the Forum.

First of all, rest easy. No one is going to come to your home, and ransack your belongings. Below is a link to an article about exemptions in the state of Texas, prepared by the people at NOLO Press. You can use either the State exemptions or Federal, whichever is more beneficial to you. You cannot 'mix and match' from both.

http://www.nolo.com/legal-encyclopedia/texas-bankruptcy-exemptions.html

Many of us on this Board like to have a copy of the Nolo Press book on whichever Chapter we have filed as a 'Ready Reference' that we can refer to, even though we might have an attorney.

I would advise consulting with at least two more attorneys before settling on one. BK law is complex, and one person may have a better understanding of it than another. Also some attorneys specialize in one particular chapter, and you may find yourself being steered toward a particular chapter, when the other one might be a better fit for you.

[TXskyblue]

In Texas, you can choose either federal or state exemptions. The main reason someone would choose the Texas exemptions is if they have equity in a house. Texas has a huge home exemption. You don't own your house so there's no reason you wouldn't want to consider using federal exemptions.

Additionally, owning your car outright is a problem. You said it's worth about 10K. That's 10K worth of an asset that the trustee is going to be interested in if you use the Texas exemptions.

The federal exemptions, however, allow about $3675 in automobile exemption. Additionally, there's a federal wildcard exemption of $13,475. That means your car should be able to be exempted, leaving several thousand in wildcard exemption for other property.

When you meet you meet with a BK attorney, I imagine he will tell you that you'll be using federal exemptions instead of Texas exemptions.

[FortHoodTX]

I agree that Federal exemptions look better than state in my case, because that wildcard will be very important to preserve my property. I work only on commission... so there's no set paycheck coming in. My bank account goes toward the wildcard, right? (Assuming I'm doing Federal.) Does this mean I should slow down working or stop working for a bit? Bringing in those wages seems to just give them more that they can take.

Regarding the car, yes the blue book shows about 11k if I give it a generous value. It was in real bad shape and my dad put about $5k to restore it. His money, not mine. I'm sure that doesn't matter since the car is in my name, I guess... but perhaps there's some wiggle room on the value since it was previously wrecked etc... but yeah, that will be a big chunk of the wildcard.

[AngelinaCat]

What we did when placing a value on our cars, we took the KBB value, plus two other reputable sources--I cannot recall the names--and averaged them. Then we took that figure to a used car salesman who has a good reputation in our area--and also we had done business with him in the past--and got a value for our particular cars in our area.

There were no questions asked about that.

[FortHoodTX]

The federal exemptions, however, allow about $3675 in automobile exemption. Additionally, there's a federal wildcard exemption of $13,475. That means your car should be able to be exempted, leaving several thousand in wildcard exemption for other property.

I see on the 2013 inflationary changes, federal exemptions allow for $11,500. Just curious as to where you got the $13,475 figure?
legalconsumer.com/bk/bankruptcy-inflation-adjustments-april-2013/

[Pizza]

Re: the electronics, etc... I filed in TX and kept every last thing in my home. Technically, the TX exemptions say 'home furnishings' and nothing specific about 'electronics', but still, there were no problems.

[FortHoodTX]

Re: the electronics, etc... I filed in TX and kept every last thing in my home. Technically, the TX exemptions say 'home furnishings' and nothing specific about 'electronics', but still, there were no problems.

That's definitely good to know. I am self-employed and work mainly from home, so it's possible that my vehicle and computers will be protected under the 'tools of the trade' exemption, including my laptop which I use when I do home appointments with clients, right? If that is the case, it will free up a lot of the wildcard for other items.

Since I'm not a homeowner and don't own too many very expensive items that a trustee would want to liquidate, hopefully I won't lose much (or anything.)

[jst4f]

Remember the price of your stuff and the car is for a quick sale. We went to CARMAX and got a price they would give us right then and there for each of our cars and used that number in our filing. Never questioned by TT. Having been in an accident is a big deal in the used car business and significantly lowers the price.

Your household belongings need to be priced as if they were being sold at a tag sale. We were "shocked" at how little our stuff was worth. The federal exemptions were very generous.

The other key item to remember is to be FULLY forthcoming and honest with your filing and with the TT. Many of the sad tales you hear about BK are due to the TT getting the feeling that the petitioner was hiding something. Be sure your petition is complete and accurate. You should have no problems.

[magic13]

I'll take the 65" Led television Seriously, I would just say I have a LED television

[Pjmax]

First of all, make a few more appts. 3-5 is a good number to start with before signing with an attorney. Do this soon, so you'll have plenty of time to decide which attorney is best for you, and to come back here and ask more questions.

I had a simple one-sheet page of my basic info: Income, total CC debt, IRS debt (and years), assets, etc. This made my initial consults smoother. I also wrote down a few specific questions of things I was most concerned about, and asked each attorney. (I tend to forget things, thus my over-organization.)

Second, (after you sign with an attorney, just ballpark stuff for your consults,) just make a list of everything, as detailed as you want, model numbers, age, etc., then figure out the resale value.
Then, make a second list, based on the first. Group items such as clothing, jewelry, furniture, etc. I would have one group for TV, stereo, X-Box; and another group for computer equipment, since that may go under tools-of-the-trade. Give the attorneys a copy of the second list, which should be condensed down from the first, but keep your first list handy. If the attorney asks about something specific, you will have the information handy. When it comes time to prepare the filing, your attorney will group and/or list property in probably a different way than you have it, but you will have the info you need ready to refer to.

It's good to start a file folder. I had one of those accordian things, actually, I had two. One I used to keep everything (like my first property list mentioned above,) including originals, which I carried to every appointment (after I hired an attorney.) In the second file, I had copies (the originals were in my 1st file) of everything my attorney asked for, organized.

Worrying about all this is totally normal, but for most of us it was a relatively painless process. I, for one, laugh at myself now for the things I worried over. I will also add that it was so much easier than it would have been because I found the terrific folks here who were always ready to help and listen.

[FortHoodTX]

That's true that sometimes too many details can be bad! I'll keep that in mind when I list my property.

The bankruptcy attorney I've consulted with has been doing nothing but bankruptcy cases for a few decades (whereas it seems others in this county have many other areas of focus). She deals with nothing but bankruptcy law, is a lot more affordable, and has an outstanding reputation, so it makes me feel a lot more comfortable. I've told her office a general description of what I have and the things I was worried about, and I've been told that I shouldn't lose anything in the process. Worst case scenario? I retain her for a couple hundred bucks, then at my second consultation I decide against it and I lose that money.

I'm working against the clock because I have a creditor who served me with 2 lawsuits (credit cards) ten days ago. They can get a judgment against me here in about ten days so I need to get the ball rolling and get my case filed quickly. I wish I had time for a few more consultations but it doesn't seem like I will.

Thanks for the advice about building my lists... I'll take it!

A little off-topic... I am self-employed. Business has been quite slow which is why I don't have steady money coming in... sporadic deposits and that's helped to cause a lot of me falling into debt. Is the trustee going to ask about that? "Why haven't you been making any money?" or will anyone even delve into my personal issues?

[AngelinaCat]

Answer the lawsuits. Don't let them get default judgments. Answering the summons will give you time--if you have 20 days to answer, and you answer, then they have 20 days to answer.

We had two lawsuits against us. We went to the civil court and when asked if we owe the debt, we answered that "we neither affirm or deny this debt." Then a date was set for Arbitration, wherein supposedly we would sit down with the creditor's attorney and work out a payment plan. Arbitration in our civil court district only happens once a month. So that bought us a month's time.

However, the date that the judge set fell on a date that we were going to be out of town. We spoke up and said this--which was true--so the judge set the date for the following month. That bought us an additional month. By that time we had our ducks together and filed BK.

[FortHoodTX]

Thank you! That is what I needed to hear. Obviously I know this is my credit card debt.... but should I give the same answer that you did? Because yes absolutely, I'm trying to string them along and buy time. (This attorney is some kid from Dallas who got his license last year, probably not very aggressive anyway.) It won't take that long to pay off my attorney and get my BK filed, so I just need another few weeks at most.

[TXskyblue]

I see on the 2013 inflationary changes, federal exemptions allow for $11,500. Just curious as to where you got the $13,475 figure?
legalconsumer.com/bk/bankruptcy-inflation-adjustments-april-2013/

The site I looked up the federal exemption on may not have been current. I should have checked it against another site, but I did not. My apologies.