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Thread: Bankruptcy?

  1. #1
    BrunetteGoddess
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    Default Bankruptcy?

    My husband and I will be meeting with a lawyer to file for Chapter 7 bankruptcy next Wednesday. We already know we qualify for Chapter 7.My questions....

    If I sell stuff on ebay on a regular basis for food money, gas, etc., can I keep my laptop? Or do I have to be an official business for me to keep it?

    When you file, do they take all the money you have too? We only have a couple hundred to our name, will they take that?? If so, how do you feed yourself, live,etc. once they take everything?

    What exactly are they interested in taking, and what wont they bother with?

  2. #2
    Banned Melonie's Avatar
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    Default Re: Bankruptcy?

    since the new bankruptcy law was enacted last October, I'm not really sure how 'understanding' the courts are now with Chapter 7 filings. I have heard that they're being real *pricks* with Chapter 13's.

    As to feeding yourself, paying rent etc. a Chapter 7 bankruptcy plus no source of income should make you a shoo-in for social welfare benefit eligibility - food stamps - subsidized rent - subsidized utilities - free health care etc.

  3. #3
    BrunetteGoddess
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    Default Re: Bankruptcy?

    So they will take all of our money? Even such small amounts? What are you supposed to do until you're actually on these programs as far as money?

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    Banned Melonie's Avatar
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    Default Re: Bankruptcy?

    ^^^ well if part of the money is in cash they won't know it exists !

  5. #5
    BrunetteGoddess
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    Default Re: Bankruptcy?

    I don't dance anymore, all money is in bank accounts.

  6. #6
    BrunetteGoddess
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    Default Re: Bankruptcy?

    Also, what are exempt and non exempt assets?

  7. #7
    God/dess VenusGoddess's Avatar
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    Default Re: Bankruptcy?

    In a chpt. 7 bankruptcy, an exempt item would be a fair amount of clothes, jewelry (within reason, ie an engagement/wedding ring or some jewelry that was handed down from a mom/grandma/etc). Exempt items will also include a television (I would assume that as long as it is not an HDTV you would be ok), stereo, computer equipment (within reason), toys for the kids and furniture.

    Non-exempt items would include assets such as stocks/securities/real estate/cars (financed...if your car is paid for, then you'll be allowed to keep it...transportation to/from work).

    If you sell stuff on Ebay, you would have to include that money as income. If I am not mistaken, you do not have to include bank statements/etc. Of course, don't lie, but don't over-estimate yourself, either. Now, I will say that I am not up-to-date with the new laws...so things may have changed. Your lawyer will be filling out all of the paper work for you. He/she will just tell you what you need to bring, what will be exempt/non-exempt, and go from there.

    Good luck!

  8. #8
    Featured Member GnBeret's Avatar
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    Default Re: Bankruptcy?

    Although you'll have to list anything and everything of value that you either own or could plausibly lay claim to, unless and until the total value of same exceeds the exemption amount and/or there are specific, non-exempt items included therein (differs by State) you keep everything. And, as you're down to hundreds of dollars and exemption total is in tens of thousands of dollars, doubt you'll lose anything at all. Instead, only real question will be whether or not you qualify under new formulas for complete discharge or will wind up getting saddled with monthly payments for next few years.
    "That's your answer Old Man? I guess you're a Hard Case too...."
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  9. #9
    BrunetteGoddess
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    Default Re: Bankruptcy?

    We've already been told that this is definitely a Chapter 7 case, no payments.

  10. #10
    Featured Member GnBeret's Avatar
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    Default Re: Bankruptcy?

    Well, assuming it was a bankruptcy attorney to whom you've candidly disclosed everything that told you that, then you have nothing to worry about - nothing will be taken, everything ('cept IRS, child support and whatever you should choose to affirm, if anything) will be discharged and you'll owe no payments thereafter.
    "That's your answer Old Man? I guess you're a Hard Case too...."
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  11. #11
    Banned Melonie's Avatar
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    Default Re: Bankruptcy?

    If you sell stuff on Ebay, you would have to include that money as income
    We've already been told that this is definitely a Chapter 7 case, no payments.
    I'm just curious as to whether you included last year's proceeds of E-Bay sales into the income figures you provided to the bankruptcy attorney. Keep in mind that your creditors will be pushing hard to convince the bankruptcy judge to rule in favor of a Chapter 13 filing so that the creditors will get some amount of money back. E-Bay will be filing 1099's by the end of this month, and that info will be available to the bankruptcy court / creditors attorneys soon after. Creditors' attorneys will specifically be looking for sources of 'undocumented' income in order to try and force a Chapter 13 filing instead of Chapter 7 such that their 'employers' will get some amount of money back from the bankrupt debtor,

    By my read, the 150% of poverty level threshold for Chapter 7 filing vs Chapter 13 filing for a 2 person household in 2006 is 13,500 * 1.5 = $ 20,250 in combined income. from

    There is also an issue of the bankruptcy judge ruling a Chapter 7 filing to be 'abusive' i.e. the debtor(s) had the capacity / ability to earn money, had earned annual amounts that were significantly higher than 150% of the poverty level in previous years, but deliberately chose not to work (or not to work as hard or as much) in order to create an annual income total that would fall below the 150% of poverty level threshold for the express purpose of avoiding Chapter 13 jurisdiction. Unless there was a medical reason, force majeure reason etc. why one or both of you were unable to work in 2006, an 'abusive' filing ruling is a possibility that must be considered.

    I would also point out that, as a result of the passage of a new state minimum wage law calling for $6.75 per hour, a person living in Arizona who is capable of working at a minimum wage job is guaranteed an earnings level of $6.75 * 40 * 52 = $ 14,040 thus two persons capable of working at minimum wage jobs have a guaranteed minimum earnings level of $28,080 ... which is well above the bankruptcy court's $20,250 150% of poverty level cutoff for Chapter 7 filings by two person households even after FICA and medicare taxes are subtracted. It remains to be seen how this will be exploited by bankruptcy creditors' attorneys and applied by bankruptcy judges in the state of Arizona re bankruptcy cases filed after last January 1st when the higher minimum wage was put into effect. This is likely to be particularly the case when there is no medical or force majeure reason rendering the debtor(s) unable to work.

    Again I don't mean to cause undue concern, but much of the criteria for Chapter 7 filing eligibility will stem from the opinions of the particular bankruptcy judge who winds up hearing your case i.e. how the judge chooses to interpret the particulars of your situation.

    ~
    Last edited by Melonie; 02-10-2007 at 05:39 AM.

  12. #12
    BrunetteGoddess
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    Default Re: Bankruptcy?

    Well he lost his job halfway through the year and even with that we were behind. I was and still am pretty sick and getting worse, so I cannot hold down a job right now. I never know how my health will be day to day, so no employer would keep me I'm sure I think I made $600 on eBay last year, and am not trying to hide that.

  13. #13
    BrunetteGoddess
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    Default Re: Bankruptcy?

    Also, and I say this as respectfully as I can, because you're always such a great help here, my question was NOT whether this is a Chapter 7 or 13. It was already disclosed that it is a 7, yes I'm aware of 13. So thank you to VG and GnBeret for giving me the information I asked for.

    Please don't think I don't appreciate your help though Melonie.

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    Banned Melonie's Avatar
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    Default Re: Bankruptcy?

    well I'm actually very glad that you'll be able to file under Chapter 7. IMHO filing under Chapter 13 amounts to little more than forced labor. All I was trying to say is that, until you actually hear that from the bankruptcy judge hearing your case, it isn't necessarily a cast in stone fact.

  15. #15
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    Default Re: Bankruptcy?

    Melonie, are you sure Ebay files 1099 ?

  16. #16
    God/dess VenusGoddess's Avatar
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    Default Re: Bankruptcy?

    Yes, Ebay does file 1099. They are required to do so by law.

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    Default Re: Bankruptcy?

    Thanks, VenusGoddess. I didn't know that. I thought that sellers would not receive 1099 because Ebay doesn't pay them any money.

  18. #18
    God/dess VenusGoddess's Avatar
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    Default Re: Bankruptcy?

    Ebay doesn't pay them money, but the sellers are paying to list their items. Ebay would have to report to the IRS where they are getting their money from. So, a 1099 is sent as a means to report that you are paying them to list/sell/make money off of their site.

  19. #19
    BrunetteGoddess
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    Default Re: Bankruptcy?

    Shouldn't I have a 1099 from them already then? Because I don't have anything yet....

  20. #20
    Banned Melonie's Avatar
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    Default Re: Bankruptcy?

    ^^^ vendors / merchants / clubs aren't required to send out 1099's until the end of February ... which sometimes don't show up in your mailbox until the end of March. I think that there is also a $600-$700 minimum.

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