Bankruptcy Advice

Question:
I am considering filing for a chapter 7 bankruptcy (in Florida) and had some questions that I hope someone could answer: 1) My father has cosigned a car loan with me. I intend on reaffirming this debt. Would he find out about my bankruptcy? And would my bankruptcy affect his credit in any way? 2) I understand that in a chapter 7 you are allowed certain exemptions for personal property. How are these items valuated? For examle I recently had to replace a dying dishwaser so obviously the one I have is brand new. Would this be deemed as being worth $500 (which is about what I paid)? That would eat up a fair sized chunk of my 'exemption money'. Same question for my dining room set. My wife purchased it a number of years ago and even though it's older it's a rather nice set which we would prefer not to lose. One might say that you could get $1000 for it if you put an add in the paper, but then you could just as easily say that it might bring a few hundred in an aution... In order to get a better idea of what I might be able to keep how do I estimate the value for these items? 3) I have a 401k through my employer with around $8000 in it. Is this exempt? I did not see it listed in the Florida exemptions. 4) I read somewhere on the internet that unless your expenses exceeded your income you might not be granted a discharge of your chapter 7 or that it might get converted to a chapter 13. While technically yes I make enough to cover all of my debts and everything is mostly paid current there doesn't seem to be any light at the end of the tunnel. I have tried for years to make headway only to find myself deeper in the hole. With creditors raising my interest rates to ungodly figures, late fees, over limit fees, etc. I don't see that I will ever get out of debt. If I am going to only get converted to a chapter 13 I'd rather keep trying to work things out on my own I think (maybe one of these debt reduction services... any comments on that?). 5) How much is the home equity exemption in Florida? I read that is was $15000. Is that per person? The last time I had an appraisal my house was valued at around $82000 but based on what other houses are selling for in the area I think it may be worth more like $125000. How will my equity be determined? Will the trustee do an appraisal? I owe $97500 on the house, assuming that I do have $30000 or so in equity would I be able to exempt all of it between my wife and I?

Answer:
> 1) My father has cosigned a car loan with me. I intend on > reaffirming this debt. Would he find out about my bankruptcy? > And would my bankruptcy affect his credit in any way? In most cases, it is not necessary (and the Court will not allow you) to reaffirm a secured debt if payments are current. Your father is likely to find out about your filing, since he must be listed as a co-obligor on the loan, but so long as payments are current, his credit should not be affected. > 2) I understand that in a chapter 7 you are allowed certain > exemptions for personal property. How are these items valuated? > For examle I recently had to replace a dying dishwaser so > obviously the one I have is brand new. Would this be deemed as > being worth $500 (which is about what I paid)? That would eat > up a fair sized chunk of my 'exemption money'. Same question > for my dining room set. My wife purchased it a number of years > ago and even though it's older it's a rather nice set which we > would prefer not to lose. One might say that you could get $1000 > for it if you put an add in the paper, but then you could just > as easily say that it might bring a few hundred in an aution... > In order to get a better idea of what I might be able to keep > how do I estimate the value for these items? In most cases, you will value assets at fire sale/auction prices. Speak with your attorney to find out how your local trustees handle valuation issues. > 3) I have a 401k through my employer with around $8000 in it. > Is this exempt? I did not see it listed in the Florida exemptions. Yes. > 4) I read somewhere on the internet that unless your expenses > exceeded your income you might not be granted a discharge of > your chapter 7 or that it might get converted to a chapter 13. > While technically yes I make enough to cover all of my debts > and everything is mostly paid current there doesn't seem to be > any light at the end of the tunnel. I have tried for years > to make headway only to find myself deeper in the hole. With > creditors raising my interest rates to ungodly figures, late > fees, over limit fees, etc. I don't see that I will ever get > out of debt. If I am going to only get converted to a > chapter 13 I'd rather keep trying to work things out on my > own I think (maybe one of these debt reduction services... > any comments on that?). The answer depends on the details of your case. Again, your attorney should be able to review your case and let you know if he/she feels there will be any problem with your filing a Chapter 7. > 5) How much is the home equity exemption in Florida? I read that > is was $15000. Is that per person? The last time I had an > appraisal my house was valued at around $82000 but based on what > other houses are selling for in the area I think it may be worth > more like $125000. How will my equity be determined? Will the > trustee do an appraisal? I owe $97500 on the house, assuming > that I do have $30000 or so in equity would I be able to > exempt all of it between my wife and I? My understanding (although I don't practice in Florida) is that Florida is one of the states that has an unlimited homestead exemption. Again, these are issues that you need to address with your attorney.





Categories