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whoisonfirst

Junior Member
What is the name of your state?What is the name of your state? OR

I have some questions about Chapter 7 in Oregon.

#1. Last December, my husband and I were given approximately $10,000 worth of stock. Since we were buried in credit card debt, we sold the stock and made a large (over $7,000) payment on a VIsa card. This payment paid off the card. We also purchased a futon, since we did not have a bed. But then the minimum payments on our other cards skyrocketed (changing interest rate?), and while we struggled to keep up, we ended up having to use my Visa again ... Will it look bad that we paid off the Visa in January, only to use it for several expenses again? We have not used this - or any - card since at least early February.

#2. We received a tax return of $1,000, and we are holding that amount now in cash, for the lawyer. Is this okay?

#3. I landed a one-time only freelancing job that paid $3,000. We used this money for medical expenses, clothes, food, and other expenses. This was on the advice of an attorney (who we have not yet retained - see #4) during a free consultation, who said we should purchase exempt items before the bankruptcy.

#4. We have to move to a new apartment on July 1st, 2004. OUr current building is full of crime, needles, and violence. We signed a new lease already. Should we file now, before we move? Will our change of address affect the papers? Or does that matter?

#5. Some of our debt is for computers purchased through financing. Do these need to be reaffirmed in order to keep the computers, as we need them for our livelihoods? Also, what if we sold some items that were on such financing, just to get by?

Sorry for all the questions. We are just very stressed out. We did not ever foresee that we would declare bankruptcy. Until our MBNA card suddenly spiked into the $300/month range - after not even using it for over a year - we honestly thought we could dig ourselves out.

I am also epileptic and without insurance. I very much need medical care, and that will be expensive. However, we have no expenses to show this, since we will not have the money for it until after we are discharged. We do have receipts and/or plans or bills for dental work and other medical care. I also have receipts for clothes, medications, and special food that I require due to allergies. Will these help?

Thank you!!!
 


I would advise retaining your lawyer right away. None of the things you mention would raise any flags for me, but your situation may have other complications that it would be better to sort out sooner rather than later. If you will have to make any more rent payments on your current apartment (say, because you didn't give a security deposit that would cover the rent on June 1), call the lawyer right away to see if there's any point. To put it bluntly, you need the money more than your present landlord, and you may be out before your landlord could possibly evict you.

$1,000 less $209 (the current filing fee for a ch. 7 petition) leaves $791 for the lawyer, which would be a normal fee in Massachusetts. If it were excessive for your area, the bankruptcy judge or trustee would say something about it.

Your lawyer will explain the different kinds of bankruptcy to you. In a ch.7 case, the trustee will sell all your non-exempt property for the benefit of your creditors. I'm willing to bet that all of your property is exempt, so your unsecured creditors won't get a penny.

In a ch. 13 case, all your disposable income for 3-5 years goes to paying off your creditors. Leaving aside debt payments, if you don't have much money left over each month (and it doesn't sound as if you do, given that you're not getting needed medical care), you would probably not be able to fund a ch. 13 plan.

Security interests in property don't get wiped out by bankruptcy. However, you have the option to "redeem" property subject to a security interest by paying the creditor its actual value. Because computer performance basically doubles every 18 months or so, a used computer is not worth very much. It would be a shame to reaffirm a loan that is already upside down. You can help your attorney by looking around to see how much similar computers are bringing. The attorney will then be in a better position to negotiate with the lender about a fair redemption price.

Your attorney will undoubtedly want certain financial information from you. Most people way underestimate their expenses, so start keeping records.

I also suggest that you talk to a legal aid office about options for low-cost or no-cost health care.
 

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