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Chapter 7

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Newposter

Junior Member
What is the name of your state (only U.S. law)? AZ

I am going to file chapter 7. I am using the State legal aide service. I cannot afford to pay a lawyer. Honestly, I would have to borrow the money, and that seems like fraud to me since I would have to list that debt also in BK. and I know it up front.

Well, anyway. This is the situation. I have 6 horses. Thoroughbreds. 3 horses are on a boarding farm in Virginia. I currently owe $9,000 and that bill increases by $900 each month. The farm will not release the horses until that bill is paid in full. They and I both doubt the horses are worth that much at this point. This is why they haven't done a sheriff's sale. With some work and time they could be brought back into condition to race again...but this is not a training center..and the farm isn't going to pay for that.

I have 3 horses on a boarding farm in Kentucky. A mare and her 2 foals (1 yearling, 1 new born). Thoroughbreds. I owe $26,500 total in stud fees. And $4,500 in farm fees which are increasing by $600 each month. The farm is not going to allow those horses to leave until the full boarding fee is paid. Also..the stud owner will not allow the sale until the stud fee is paid in full. I might be able to make a deal to pay the stud fee from the auction price...but the farm will not allow the horses to go to the auction.

In both cases, the farms are likely to destroy the horses rather than to be left holding the bag.

So...if I make a deal with someone to take these horses and pay the bills...they would take the risk of paying to train and/or auction them to get their money back. Might pay enough, might pay more, might lose a lot of money. Hard to know for sure.

The thing is...the auction is in August....this must be done right now or the opportunity is gone. That yearling must be sold in the yearling sale ...if he goes to the January sale...he has to be broken and in training. Big additional investment....I won't find someone to go that far....so it must be August. For the older horses...training them to run will require 3 months of training...the racing season ends Dec. 31. Just barely enough time to make money (if that is even possible) to maybe come back to break even for someone who takes them and pays those bills.

So..what happens to my BK? Am I in trouble for liquidating an assets? Am I in trouble for "preferring one or two creditors over the others"? Since the deal has to include the stud fees and farm bills.

To finish...I have no income. I have no prospects for income. I also have approx $30,000 in vet bills...two vets already have judgements against me. I have no credit card debt. I have no car loans, no mortgages. I have no assets other than my car 2002 Toyota Camry. I believe I will inherit my fathers house in the next couple years. I hope to not lose it to judgements. If I have no prospects next year, I will file for Social Security ...I am 65. My credit is already trash....BK offers me the chance to start over and maybe recover from the mess my life has become.
 


Proserpina

Senior Member
What is the name of your state (only U.S. law)? AZ

I am going to file chapter 7. I am using the State legal aide service. I cannot afford to pay a lawyer. Honestly, I would have to borrow the money, and that seems like fraud to me since I would have to list that debt also in BK. and I know it up front.

Well, anyway. This is the situation. I have 6 horses. Thoroughbreds. 3 horses are on a boarding farm in Virginia. I currently owe $9,000 and that bill increases by $900 each month. The farm will not release the horses until that bill is paid in full. They and I both doubt the horses are worth that much at this point. This is why they haven't done a sheriff's sale. With some work and time they could be brought back into condition to race again...but this is not a training center..and the farm isn't going to pay for that.

I have 3 horses on a boarding farm in Kentucky. A mare and her 2 foals (1 yearling, 1 new born). Thoroughbreds. I owe $26,500 total in stud fees. And $4,500 in farm fees which are increasing by $600 each month. The farm is not going to allow those horses to leave until the full boarding fee is paid. Also..the stud owner will not allow the sale until the stud fee is paid in full. I might be able to make a deal to pay the stud fee from the auction price...but the farm will not allow the horses to go to the auction.

In both cases, the farms are likely to destroy the horses rather than to be left holding the bag.

So...if I make a deal with someone to take these horses and pay the bills...they would take the risk of paying to train and/or auction them to get their money back. Might pay enough, might pay more, might lose a lot of money. Hard to know for sure.

The thing is...the auction is in August....this must be done right now or the opportunity is gone. That yearling must be sold in the yearling sale ...if he goes to the January sale...he has to be broken and in training. Big additional investment....I won't find someone to go that far....so it must be August. For the older horses...training them to run will require 3 months of training...the racing season ends Dec. 31. Just barely enough time to make money (if that is even possible) to maybe come back to break even for someone who takes them and pays those bills.

So..what happens to my BK? Am I in trouble for liquidating an assets? Am I in trouble for "preferring one or two creditors over the others"? Since the deal has to include the stud fees and farm bills.

To finish...I have no income. I have no prospects for income. I also have approx $30,000 in vet bills...two vets already have judgements against me. I have no credit card debt. I have no car loans, no mortgages. I have no assets other than my car 2002 Toyota Camry. I believe I will inherit my fathers house in the next couple years. I hope to not lose it to judgements. If I have no prospects next year, I will file for Social Security ...I am 65. My credit is already trash....BK offers me the chance to start over and maybe recover from the mess my life has become.

For Arizona: http://www.azb.uscourts.gov/court-info/faq?page=1
 
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I am going to recommend that you consult with several attorneys in whatever county in Arizona you are located in.

My gut reaction, without knowing the details of your situation. . . Chapter 7 trustees do not like dealing with assets that require feeding and vet care. It is highly likely that, once the trustee becomes aware that he/she is now responsible for livestock, he/she will move quickly to abandon the bk estate’s interest. Once that happens the livestock belongs to you. Since it appears that nothing is going to happen to the horses until August, you may (and I stress the word “may”) want to file bk now and approach the Trustee to issue his/her notice of abandonment. Once abandoned you are free to make whatever deals/transfers you want without the fear of what could happen in the bk. The problem is that, to do this properly, you really need the assistance of a qualified bk attny. I am not sure that legal aide will have had enough dealings with the various trustees to effectuate such a plan.

Des.
 
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Newposter

Junior Member
I am going to recommend that you consult with several attorneys in whatever county in Arizona you are located in.

My gut reaction, without knowing the details of your situation. . . Chapter 7 trustees do not like dealing with assets that require feeding and vet care. It is highly likely that, once the trustee becomes aware that he/she is now responsible for livestock, he/she will move quickly to abandon the bk estate’s interest. Once that happens the livestock belongs to you. Since it appears that nothing is going to happen to the horses until August, you may (and I stress the word “may”) want to file bk now and approach the Trustee to issue his/her notice of abandonment. Once abandoned you are free to make whatever deals/transfers you want without the fear of what could happen in the bk. The problem is that, to do this properly, you really need the assistance of a qualified bk attny. I am not sure that legal aide will have had enough dealings with the various trustees to effectuate such a plan.

Des.
No, those horses must be entered for the August auction NOW. The auction house will send reps out to look at the horses before the entry fee is accepted.

I believe that once the farms know I have filed for BK...they will destroy the horses. There will not be an opportunity to deal with this later ...they will be gone before a trustee has any chance to decide.

My only question is...making a deal NOW to have someone take the horses and pay the debts..what does that mean when I file in July? Have I messed up? Liquidated assets that I should not have? Paid debts in such a way that I preferred one creditor over another? (Farms and stud but not vets). Does it mess up my filing a month or two AFTER I make the deal and transfer the horses and debt to someone else?
 
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Newposter

Junior Member
Also...I guess you missed the part about I do not have any money to pay anyone for anything. I have talked with many lawyers...they all drop me when they ask for $1,000 to $1,800 and I tell them I cannot afford $50 much less that amount. I was told over and over to go to AZ legal services....that is where I am. They are not going to act as attorney...they "guide" you through filing yourself. But...I am not the typical BK. no credit card debt. No car loan, No mortgage, etc. they don't seem to have much idea if I can do this deal or not...or what the ramifications will be. They seem to deal with people buried in medical bills and/or credit card debt. Me? They have no idea. Maybe you can tell me how to find a BK lawyer that doesn't want money? (It is ironic that I need that much money to go BK)

(Ps...just as aside...if those horses are destroyed while I am "owner". My licenses are revoked. I will be banned from all racetracks in this country. Any idea I might work on the track in the future is gone. . Jockey club really punishes anyone causing the destruction of thoroughbreds).
 
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those horses must be entered for the August auction NOW.

This is why you REALLY NEED a qualified attny. I could care less about the auction house. Once you file bk, if the auction has not taken place, the auction house cannot, without violating bk law, do anything with the horses. The minute you file the horses belong to the bankruptcy estate and a notice to the auction house of the filing should stop any illegal sale of estate property.

I believe that once the farms know I have filed for BK...they will destroy the horses.
Same as above. Once case is filed holder of estate property can legally do nothing without first getting the bk trustee to say "ok". Get an attny.

My only question is...making a deal NOW to have someone take the horses and pay the debts..what does that mean when I file in July?
You will have to disclose all such transactions on question 10 of the Statement of Financial Affairs, giving as much detail as possible. It will then be up to the Chapter 7 Trustee to decide if the transaction should be set aside for whatever reason. Nothing you can do about it. Further, payments in excess of $600.00 in the 90 days prior to filing to any one creditor must be disclosed on question 3 of the Statement of Financial Affairs. It will be up to the Trustee to determine if such payments are preferential and can be recovered from the recipient pursuant to 11 USC 547.

Again, you need to discuss the details with a qualified attny.


Des.
 
Also...I guess you missed the part about I do not have any money to pay anyone for anything. I have talked with many lawyers...they all drop me when they ask for $1,000 to $1,800 and I tell them I cannot afford $50. . . But...I am not the typical BK. . . Maybe you can tell me how to find a BK lawyer. . .

I will look up the Bkforum. Can you give me the full URL?

(Ps...just as aside...if those horses are destroyed while I am "owner". My licenses are revoked. I will be banned from all racetracks in this country. Any idea I might work on the track in the future is gone. . Jockey club really punishes anyone causing the destruction of thoroughbreds).
1. In an earlier post you made reference to borrowing money for the attny. Might be a good idea to do just that. Yes, the person you borrow from will be listed as a creditor however, once your case is filed you are free to voluntarily repay any creditor from post petition wages. I cannot mention names of possible attnys - not within the forum rules. I do have some in mind (leaving my firm off the list) but all do charge. You are not going to find anyone willing to represent you for nothing.

2. I understand your concern over the Jockey Club. This is a good reason to make sure you have proper legal representation in the bk.

Des.
 
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Newposter

Junior Member
1. In an earlier post you made reference to borrowing money for the attny. Might be a good idea to do just that. Yes, the person you borrow from will be listed as a creditor however, once your case is filed you are free to voluntarily repay any creditor from post petition wages. I cannot mention names of possible attnys - not within the forum rules. I do have some in mind (leaving my firm off the list) but all do charge. You are not going to find anyone willing to represent you for nothing.

2. I understand your concern over the Jockey Club. This is a good reason to make sure you have proper legal representation in the bk.

Des.
Thank you so much for all your help! The references and the advice are very helpful. Such an eye opener!!

Btw...if I take a cash advance for $1000 (lowest amount quoted to me) it would cause me trouble since I read anything over $500 on an account this close to filing is fraud for sure. Any way, besides that...no one is going to lend me money... I have told them I cannot repay it, and no one I know can take that much of a hit for me.

Thank you again!!
 

Newposter

Junior Member
There might actually be a fair number of people trying to figure out what happens to animals they are responsible for once they go into BK. might be show dogs, or any number of other possibilities. This is post might be a guide to them.
 
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