Thinking about filing for Chap 7 but I have fears!

[lilcam]

What is the name of your state? PA

I have fears of going to court and having some smart a$$ lawyer grill me with questions. People make mistakes and I definately learn from my mistakes, I dont need you to question me. However, I know it's their job and they wanna make sure I am doing so for the right reason. Anyways, I have been debating but not sure if I can go through. I spoke with a lawyer but he wants $200/hr to discuss my case!

Anyways, I have a real estate business with a partner (LLC). We have 2 properties under the LLC and one is under my name. If I file, will they come after my business? Also, what can they come after? My friend told me in PA they can't come after my accounts, wages or personal properties.

I make $2000/month AFTER taxes and in PA the median income is like $38k, and I make $32k/year.

3 CC totaling $35,500 (ALL PAID ON TIME)
3 unsecured line of credits totaling $108,000 (monthly payments about $1000)

They're calling me at work and I'm tired of this. I just want it all to go away!

[Ladynred]

You're over your state Median income, you will be forced into a Chapter 13 plan to repay at least some part of your debts.

You need to call a few lawyers and find one that will give you a FREE consultation.

The process of bankruptcy includes being questioned about your BK petition by an appointed Trustee, there is no way around it. How detailed they get depends on your petition and the pickiness of the particular Trustee. You won't be 'grilled' as you describe, but you will have to answer his/her questions -under oath.

Under a Ch 13 you get to keep your assets because you'll be paying off some portion of your debts.

[lilcam]

Originally Posted by Ladynred

You're over your state Median income, you will be forced into a Chapter 13 plan to repay at least some part of your debts.

You need to call a few lawyers and find one that will give you a FREE consultation.

The process of bankruptcy includes being questioned about your BK petition by an appointed Trustee, there is no way around it. How detailed they get depends on your petition and the pickiness of the particular Trustee. You won't be 'grilled' as you describe, but you will have to answer his/her questions -under oath.

Under a Ch 13 you get to keep your assets because you'll be paying off some portion of your debts.

I'm over? I make $32k a year and I thought $38k was my state's median.

[Ladynred]

Oops.. I'm sorry.. loooonngg day.. I reversed those numbers in my head I guess

Soooo... given that you're UNDER the median income, that's still no guarantee you'll get a Ch 7. If you have as little as $100/mo in disposable income, after ALLOWED expenses (per the IRS allowances under the new law), then you could still get stuck with a Ch 13. You're not really allowed all of your actual expenses any more. If your expenses are over what the IRS allowances say you can have, then that amount you're over may not be considered or you'd have to appear in court and argue the excess expense be allowed.

You need to check the PA exemptions too. Anything that's not within the exemption allowances may be forfeit or you may have to redeem them to keep them from being liquidated. The list of what is 'personal property' is now limited in a way it was not limited before. For example, under the old law you could have 3 TV's as long as the value (at garage sale prices) was within the exemptions. Now its likely you'll only be allowed ONE TV - its all that's 'reasonable and necessary' - AND you must use REPLACEMENT VALUE with depreciation figured in. Its a whole new - ugly - ballgame.

With the assets and the LLC, only a lawyer in your area can tell you how the LLC will be affected - if at all.

[lilcam]

Yes, I knew it doesnt mean I would automatically get chap 7 but anything is better than them coming after me. But, can someone tell me if they can come after my properties and wages? I am from Pennsylvania.

My friend told me to sit tight and wait for some money to come in. We're selling our 3rd house and refinancing our second house in about 3 months. That should get them off my back.

[Ladynred]

IF you go into a Ch 13 your assets are generally safe. If you get a Ch 7, then your wages aren't garnished in a Ch 7, but in a Ch 13 payments MAY have to come out of your paycheck. Its not considered a garnishment. Other assets and their 'safety' will depend on the equity and your available exemptions. I believe in PA you can choose Federal or State. Federal is more generous than PA exemptions except for the 'tenancy by entirety' for real property which MAY protect all of the equity for a homestead.