| 1. |
|
| 2. |
|
| 2. |
|
Ratings. Guidance. The Right Lawyer.
filing for bankruptcy protection, exempt assets, can husband and wife file separate chapter 7 petitions
Seattle, WA
Viewed 4166 times.
Posted about 1 year ago in Bankruptcy / Debt
Flag as objectionable
bankruptcy/debt:
My Husband and I have been married 31 years. We both worked together in the transportation industry and have suffered a great loss of income due to the rising costs of fuel, insurance’s and other expense. We had to close our trucking business and we have not had income in over five months. We had great credit, but now have fallen behind in all our credit cards (8 of them approximately $65,000) behind in medical bills ($1500) and are now falling behind with our mortgage (just fell behind for the first time this month). We were never late paying anything but now with the loss of income we can no longer pay our bills.
We have a 2002 Ford pickup that we still owe $24,000 on — a 2000 Mack Dump truck that is getting ready to be reposed with an outstanding balance of $60,000. Our house is under major construction and is just a shell with no power, water, etc. Home is appraised at $408,000 and we owe $202,000 to the bank for a first and second mortgage. We cannot refinance — too much revolving credit and now that we have fallen so far behind there is no way to get a loan. We cannot finish the house so we put it on the market in hopes of maybe selling it. We have seen several attorneys — most suggest a chapter 7. Our home has been on the market sometime now and we have reduced it several times just trying to get it sold and the loans paid off. The current asking price is $299,000. And still no luck selling it. If we file a chapter 7, we are very concerned we will not meet the $125,000 exemption and the trustee will then go the few little things we do have (own). We have a 2003 RV that we are living in since we started the remodel (lived in the RV 5 years), our work rig which is a 2000 semi truck and a 2002 trailer, and we own a 1999 Saturn car. The RV is our home and the work rig is our only possible chance for future income. If the Ford is reposed, then the Saturn will be our only means of transportation. We don’t know if filing a bankruptcy is the best solution. If the trustee cannot get the $125,000 exemption and then takes away our RV (which is our home) and the rig (only chance for future income) we will most likely loss “everything” we own. House will end up going into foreclosure and back to the bank and then there is nothing left. We do not know what to do. We wonder if we stand a better chance at not filing and just letting the creditors come after us for the debt, let the home go to foreclosure, and let the vehicles be reposed. Then keep our RV, our big rig, and our little Saturn and just try to start over or what? Even after talking to several attorneys — we still really don’t know what our best option would be. Sometimes we feel the attorney just wants us to hire him/her but he haven’t truly felt that any of them have given us all our options or they have not told us any solutions other than court/bankruptcy. This is an incredibly difficult situation we are in and at our ages 50 & 56 we need to make the right decision that will benefit "us" the most. Another thought we ponder is to try and liquidate “everything” we own — negotiate a settlement with the creditors and then take what is left and try and start over? In the event of a divorce, would we be able to split the assets before filing a chapter 7? Would we be able to file our own separate bankruptcy? We would appreciate any suggestions you have and any information that you can share with us.
Additional information
I was in the same boat so to speak and the only difference was I had prepaid legal. They informed me that if I filed bankrupcy with more then one home that I could loose the one with equity to a sale for the creditors, so I let the home without the equity go to foreclosure. I wasn't able to refinance and had no other options because of it. The attorneys at prepaid were very kind and answered all my specific questions as well as being available to me at all times when there were changes or new things came up. This only costs me around thirty dollars a month and they are av-bv rated attorneys(in the top 20% of all attorneys.) Many other benefits come with it as well that are far to numerous to mention here. Mostly Peace of Mind! Answers (2)
Lesley Abigail Hoenig
This attorney is licensed in Illinois and 2 other states.
Posted about 1 year ago.
Flag as objectionable
If you are thinking of liquidating everything then you would probably be better off just filing bankruptcy and let your trustee liquidate everything and walk away, then you have the benefit of a discharge and a clean slate. Negotiating a debt after liquidating it yourself leaves you in a worse position than if you were to file bankruptcy.
If you were to divorce, it would probably be better to file bankruptcy jointly before the divorce is final that way you both walk away with a clean slate (but it sounds like that's only an if to a definite). If you have too much assets to keep if you were to file, you may want to look into a chapter 13 instead of a chapter 7. Your question is very fact intensive, and I think you would do well to take what local bankruptcy attorneys have told you of the likely outcomes (because they know what the local trustees would do). If you have the house listed for $299k despite you thinking it is worth over $400k, and no one is buying you probably need a new appraisal to figure out whether your house is really worth as much as you think it is. That would help you figure out whether your property is worth too much to be completely exempt or not. If there's $75k not exempt (based on the info you gave me) it would be better to file a chapter 13 and pay at least $75k into the plan if you are determined to keep the house. (assuming you file a bankruptcy at all). Which it looks like that would pretty much pay all of your unsecured debt, but obviously you'd need to have the money to pay it. But it doesn't sound like you're going to be able to keep all this property unless you are able to find a new source of income some time soon. 
Dainen N Penta
This attorney is licensed in Washington.
Posted about 1 year ago.
Flag as objectionable
You are in an unfortunate situation, and if you are thinking about filing for bankruptcy, it is often better to do so sooner rather than later. It is also unfortunate that you feel the attorneys you have seen "just want us to hire him/her." Usually we want you to hire us because we are certain that we can help you!
True, there is a great deal of shame and stigma attached to seeking bankruptcy protection. Many people feel that there are other options that aren't being explained to them. Sadly, by the time people are thinking about bankruptcy, in many cases it is the best or only option. Non-bankruptcy options could even leave you with just as much debt as you started out with, or you could fall victim to a seemingly helpful "debt elimination" or "debt settlement" company and end up having to file for bankruptcy anyway. It is useful to keep in mind that the U.S. Constitution requires us to have a "uniform system" of bankruptcy laws, and the Bible even contains scriptural authority for regular forgiveness of debts. Although the bankruptcy laws changed, the main goal behind the bankruptcy laws is that the "honest but unfortunate" debtor needs a fresh start (not a head start, but a fresh start). As much as you seem ambivalent about filing for bankruptcy, you may wish to consult with another attorney to get another opinion, or you may want to contact the attorneys you met with to discuss your situation further. A great deal of making the difficult decision to seek bankruptcy protection is also finding an attorney who has compassion for you, can explain the bankruptcy law and your other options in a way you can understand, and who you have a natural rapport and feel you can communicate openly with. |
