Considering filing bankruptcy. What can I retain? I don't think I make enough to qualify for ch13 so prob would have to be ch7.

Asked over 2 years ago - Orlando, FL

I owe a lot of credit card debt from previous marriage. Debt isnt mine but Im stuck with it due to cards in my name. Anyway, I own a vacant piece of land but used it back in 2010 to secure a loan with someone I personally know (agreement was signed but not notarized or filed with county- was told would still be valid, however?) Theyre eligible to collect on the note next month which would give them a portion of the land to cover the amount I owe them. The amount I would retain of the land is still a few thousand. Can I use wildcard to keep my share? Would the transfer to them be deemed as preferential because I personally know them and be reversed? Also, my ex owes me money... Would court take it away? What if they try and can't get him to pay? I haven't been able to get him to pay.

Additional information

There was nothing in any marital agreement or divorce agreement/settlement about my cards or his.

Attorney answers (4)

  1. Roman Vincent Hammes


    Contributor Level 7


    Lawyers agree

    Answered . There are a handful of issues here. First, what you would be able to retain. In chapter 7, the debtor retains all exempt property and any non-exempt property that the trustee abandons (doesnt administer for the benefit of your creditors). Common exemptions include homestead, $1K in a vehicle, $1K in personal property, wages held in a bank account that were earned in last 6 months if you are head of family, tenancy by the entirety property (if you have re-married), etc. If you do not claim homestead, you are also entitled to an additional $4K wild card exemption. The applicability of these various exemptions will depend on the particulars of your situation.

    Second, the lien on the vacant piece of land may be avoidable in a chapter 7. Secured transactions can be complicated and if the lien is not recorded properly, it is possible that a chapter 7 trustee will move to have it invalidated. If you deed a portion of the vacant land to your friend before filing chapter7, a trustee may look into bringing a fraudulent or preferential transfer action against your friend. These are complicated issues and I strongly recommend that you consult with a bankruptcy lawyer before proceeding further.

    Third, the money owed to you by your ex would need to be listed on Schedule "B" of your chapter 7 petition. It is possible that a trustee would look to collect this money for the benefit of your bankruptcy estate, but this depends on a number of factors (collectability of the debt, speed of collection, effort in trying to collect, etc.). If the trustee doesnt want to try and collect, the receivable will likely revert back to you after you chapter 7 case closes.

  2. Elias Leonard Dsouza

    Contributor Level 10


    Lawyers agree

    Answered . This is a complicated scenario. My best suggestion is for you to see a bankruptcy attorney where you live. The credit card debts may get discharged in a chapter 7 or 13 bankruptcy, however, if it was a part of the Marital Settlement Agreement wherein you agreed to be responsible for these debts and hold your ex-spouse responsible, the discharge of those debts is questionable because the ex-spouse can/may still sue you for contempt in the family law court.

    No attorney-client relationship exists by the submission of this answer. Elias Leonard Dsouza, Esq. is only... more
  3. Deborah F Bowinski

    Contributor Level 17


    Lawyers agree


    Answered . You must consult with an experienced bankruptcy attorney. You are asking a number of complicated questions that have very fact-driven answers. When assets, joint debts, and divorce issues come into play there are no such things as quick, reliable answers. An attorney will be able to carefully review your circumstances and suggest the best options for you.

  4. Dorothy G Bunce


    Contributor Level 20


    Lawyers agree

    Answered . The property you can keep if you file Chapter 7 is determined by state laws known as exemptions & I am posting a description of these laws for all 50 states for you to review.

    A couple of things to remember - 1st, to use state exemptions, you must have lived in the state for more than 2 years. If less than 2 years in the state, the exemptions in the prior state apply. 2nd, the amounts referred to are for equity, which is the fmv minus any lien. So if your car is worth $10K and you owe $12K, your equity is $0.

    Hope this perspective helps!

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