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Want to file Chapter 7 bankruptcy, but have about $7K in stock. If I sell the stock before I file, could it be used against me?

Chicago, IL |

If I sell the stock before I file, do I list it on the bankruptcy paperwork? Also, I'm no longer employed, have no income, an old car, and living with relatives with no rent. On CC application a year ago, I had income and rent listed, can this work against me in filing Chapter 7? If I get a good paying temp job in the meantime, can they garnish my wages?

Attorney Answers 7


  1. You would not list the stocks, just the proceeds. What you filed a year ago can be reviewed, yes. On debts that are not discharged wage garnishment is possible.

    I suggest, from the questions you are asking, that you need to hire a lawyer.


  2. You must list all your property, whether stock or cash. (http://www.avvo.com/legal-guides/ugc/i-dont-want-to-file-on-that-what-you-must-include-in-your-chapter-7-bankruptcy). You will also list any recent transfers of property. If your creditor has a judgment against you, it can garnish your wages. However, the garnishment must leave you with a minimum amount, based on state and federal law. You need to hire an attorney to discuss the proper strategy for you. Hope this helps. Good luck!

    If you find this answer helpful, please mark the answer as "helpful." This is legal information and not legal advice. Contact an attorney in your area for legal advice. This answer is intended to be used for informational purposes only, and does not establish an attorney-client relationship.


  3. You must list the sale on Statement of Financial Affairs. If you use the proceeds on reasonable living expenses and then file, you will be fine. Some states (and the federal exemptions) have a wildcard provision that may exempt the stock. Contact a local attorney that is familiar with the Illinois exemptions.


  4. It would be well with it to use some of that money to retain an experienced attorney to guide you through the bankruptcy process.


  5. First, the stock may not be an issue. Your bankruptcy attorney can review how much risk you may have in having to give it or part of it up.

    Second, if you sell it, you still have something, cash. So, you would have to list the cash, have used it up for legitimate living expenses or invest it into an exempt asset, but the last alternative may have some consequences to be considered.

    The scope of this space does not afford an opportunity to assess the situation and advise you. I recommend you assemble for legal consultation: (1) your income information for April 2012 through the present, including wages and unemployment during that period; (2) all your bills (copies neatly assembled, back pages included); (3) last four years’ tax returns; (4) a credit report (use www.annualcreditreport.com to obtain free report if not requested in last year); and (5) other information that may apply, such as copies of lawsuits. Call at your earliest convenience to afford the most opportunity in which to be advised about your best course. You are not required to use an attorney in your area.

    I do not recommend filing bankruptcy on your own. There are too many complex issues. I have seen several posts on this site for debtors who filed on their own and are seeking counsel concerning complications. Most of them will have a hard time finding an attorney to get involved to unwind the mess without the attorney charging several times what would originally have been paid.

    The scope of this space does not afford an opportunity to adequately advise you. The response provided is intended to be informative, but not final. You are advised to arrange a consultation at which all facts and documents can be explored and terms for representation agreed. An attorney-client relationship must be formally established.


  6. > On CC application a year ago, I had income and rent listed, can this work against me

    Facts are missing. If you listed it -- falsely -- in order to get credit, you may be liable in a dischargeability adversary proceeding pursuant to 11 USC 523(a).

    This answer does not create an attorney-client relationship between you and I. I am not your attorney unless we both sign a written contract that describes our relationship and terms of the representation. Any information provided to you here is not a substitute for the advice you need to pursue any legal matter. I advise you to retain the services of a local attorney before taking any legal action in this matter.


  7. Piecemeal asking questions on this site to do brain surgery on yourself is not wise even if you were a doctor. Get an attorney. The attorney will advise you on your concerns and interests. Part of the proceeds from a stock sale could go toward paying an attorney.

    The response given is not intended to create, nor does it create an ongoing duty to respond to questions. The response does not form an attorney-client relationship, nor is it intended to be anything other than the educated opinion of the author. It should not be relied upon as legal advice. The response given is based upon the limited facts provided by the person asking the question. To the extent additional or different facts exist, the response might possibly change. Attorney is licensed to practice law only in the State of Illinois. Responses are answers to general legal questions and the receiver of such question should consult a local attorney for specific answers to questions.

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