Protecting Bankruptcy Assets

Non-investing personal finance issues including insurance, credit, real estate, taxes, employment and legal issues such as trusts and wills
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mrgeeze
Posts: 180
Joined: Wed Nov 04, 2015 11:09 am

Protecting Bankruptcy Assets

Post by mrgeeze » Sun Nov 04, 2018 9:25 am

State is Va.
Friend contemplating bankruptcy.
Serious illness. Won't get better.

I'm trying to help out with a bit of a financial mess.

I have read the state exclusions for chapter 7 in virginia.
I understand his residence and IRA are protected.

He may soon sell a property that should put about 100K in his non-retirement bank account.
I'm guessing that will NOT be protected and will be used to pay creditors.
Yes or no.

Finally, I will consult with a proper attorney before I do anything.

Thanks,

Silk McCue
Posts: 1332
Joined: Thu Feb 25, 2016 7:11 pm

Re: Protecting Bankruptcy Assets

Post by Silk McCue » Mon Nov 05, 2018 8:43 am

Sorry to hear of your friends problems.

The bottom line is that they are going to need a bankruptcy attorney to provide expert guidance. Hire a good one.

Obviously they shouldn't sell the property before they meet with a lawyer.

Cheers

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HueyLD
Posts: 6236
Joined: Mon Jan 14, 2008 10:30 am

Re: Protecting Bankruptcy Assets

Post by HueyLD » Mon Nov 05, 2018 8:55 am

Went to a all day seminar/training on how to help the less fortunate. One of the speakers was a bankruptcy attorney.

When asked how he got paid by clients filing for bankruptcy protection, he said: " Upfront" and the soon to be bankrupt clients always seemed to have the money to pay him.

rooms222
Posts: 331
Joined: Fri Feb 22, 2013 2:12 pm

Re: Protecting Bankruptcy Assets

Post by rooms222 » Mon Nov 05, 2018 3:00 pm

Being paid upfront is before filing. It is not entirely accurate Almost all bankruptcy attorneys offer free consultations, and may have several meetings trying to get the case to a point where it can be filed and where the money has been paid. A friend of mine I referred for potential filing has had four meetings with their attorney, and cannot come up with the funds, so the attorney has made nothing for their time. Also, because of changes to the bankruptcy act about 15 years ago, potential bankruptcy attorneys may not be able to fully advise you and then represent you in a filing. Additionally the bankruptcy court has general guidelines about how much money such an attorney can earn in a filing as a fee, so the best attorney costs about the same as any other. You may have additional fees, because the property is a complicating factor with high risk/high reward. Property filings are one of the most scrutinized items by the trustee.

One should look at the bankruptcy court where you will likely file, and look for bankruptcy practitioners who are also bankruptcy trustees. Most of them take private clients where someone else would be the trustee. Being the trustee means that the attorney is likely plugged in professionally to the other practitioners (other trustees) and has a good general knowledge of what will fly. Who is a trustee can be found on PACER if you get an account, and often be found by google search, on the bankruptcy court website, or by asking the court clerk for a list of current trustees.

Also, creditboards.com may give better discussion beyond the limitations of this board. To access the bankruptcy board, you must be a member. It does not show up for non-members. I would not take their advice as gospel, but do as described above. Get more than one free consultation. There are several courses of action that come to mind in this case, and it is state-specific, bankruptcy-circuit specific, and tied to the facts of the property to be acquired and the assets and liabilities of the debtor.

J295
Posts: 1681
Joined: Sun Jan 01, 2012 11:40 pm

Re: Protecting Bankruptcy Assets

Post by J295 » Mon Nov 05, 2018 8:45 pm

Sorry about this serious illness that won’t get better… Given that fact, what is the reason for filing now?

carolynb2
Posts: 8
Joined: Fri Sep 30, 2016 2:52 pm

Re: Protecting Bankruptcy Assets

Post by carolynb2 » Thu Nov 08, 2018 11:44 am

If the person has student loans and the illness/situation won't improve make sure they also file an adversarial proceeding to include the student loans. Most people eligible to do that don't. Depending on the study 30-50 or so percent of the people that do this, actually have their student loans erased as well.

Katietsu
Posts: 1622
Joined: Sun Sep 22, 2013 1:48 am

Re: Protecting Bankruptcy Assets

Post by Katietsu » Thu Nov 08, 2018 12:01 pm

What kind of debt? Is there a reason that a bankruptcy filing is needed now? I mean has a creditor forced the issue with a legal proceeding?

Instead of bankruptcy, it might be better to just quit paying on the debts. Let the creditors know about the illness and the lack of future income. Use part of the 100k to make settlement offers. Of course, this is highly dependent on the situation.

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