Bankruptcy Info?

[Contrary1]

I am going with a very good friend tomorrow to her appointment with a bankruptcy attorney. I don't know the first thing about the procedure, but she will need the moral support, and probably a ride home, as she is very fragile these days.

She lost her job in June from the same company that kicked me under the bus this past November. She was making about $75k, extremely good money for a woman, especially one without a degree. That fact has kept her from finding another decent job, even though she is willing to work for less money. She can no longer pay her mortgage. I have helped her out financially, but it has reached a point, that even if she found employment today, it is unlikely she could ever catch up.

Anyway, I was wondering if anyone reading this could offer some advice as to what questions she should ask. I know she will be too upset to think straight, and I want to make sure nothing is overlooked.

Thanks! :hi:

[SoCalDem]

1. Even with the new laws, she should be fine. The lawyer will do

all the heavy lifting for her. When my friend filed, it was not hard for her ast all.. Tell your friend to watch out though, because apparently the credit card companies will start sending her "free" cards right away.:scared:

[notadmblnd]

2. I think they'll be asking most of the questions.

I don't know all of the procedure since the law was changed, but one of the questions she will be asked is if, after all the bills are paid, does she have $200.00 dollars left. But is your friend is wondering if it is better to file chapter 13 or chapter 11? Doing either is going to go on your credit report. If she decides to file, she only has to file on what she wants to file on, meaning she can keep her house or car, but they have to be current. Is this the kind of info she is looking for?

[Deep13]

3. Don't reaffirm debt to keep secured property...

...except for a house. Surrender the items instead. That includes overpriced cars.

[Dr.Phool]

4. She's going to have to pay a percentage of any asset she keeps.

A friend of mine had his first hearing last month after being injured in a car accident, and losing several months pay (self-employed). He needs his car to work, and when his engine blew a couple of months after the accident, he bought another used car for cash. He had to pay a percentage of the value to the court. Had he taken out a loan, he would have had less equity, and not had to pay anything.

Tell her to ask questions along those lines.

[Deep13]

9. That depends on state law.

Ch. 7 is liquidation. In a personal case, most of most people's property is protected by exemptions. Those exemptions are written into the Bankruptcy Code, but individual states are allowed to opt-out and substitute their own exemptions. This state's exemptions are downright stingy compared to the Federal exemptions and exempt a small dollar value for various catagories of property. Other states have broad exemptions especially on real estate. Ch. 7 has no repayment of debts.

Ch.13 is a structured repayment plan and may be what the previous poster is thinking. Basically, if the debtor makes enough to pay off a good part of the debt, then he or she is limited to Ch.13. There are no exemptions because no one loses property in a 13.

[northshore]

5. Best move she could make given the circumstances

If she is hopelessly in debt, it is the best move she will ever make.

"Oh don't!!!" "You will never be able to get credit!!!"

Well, she can't get credit now. The only difference between hacking your way back to zero piecemeal and bankruptcy is with bankruptcy you don't have to pay!!!

Besides, these days, she will be in good company. Many fortune 500 companies have gone BK, as well as a butt load of "rich" people. The law is there for you to use. Why not avail oneself of the protections that the government has made available to you?

When I look back on my bankruptcy, the only regret I have is not doing it sooner.

[Union Thug]

6. You've described my situation exactly.

Although I filed before the new bankruptcy laws, so I don't know how that will impact her. Either way, reassure her that it is not the end of the world and that once over with, she'll feel a huge burden lifted from her shoulders. I held off for the longest time, but having gone through the process and knowing how good it feels to get out from under crushing debt, I would have filed much sooner if I had it to do again.

I can empathize with her... But even without a degree (like myself) another job will come along requiring her unique skillset. It sometimes takes a while, but tell her to hang in.

[Lydia Leftcoast]

7. The hardest part of bankruptcy is filling out all the financial forms

Seriously.

If she's being hounded by creditors, ask if she can refer all creditors' calls and letters to the attorney. That stopped them cold in my case.

The attorney has been through it all before and will guide your friend step by step through the procedure.

[Greyhound]

8. I filed mine on the last day under the old law, but the attorneys and courts

are still unraveling the whole mess this new law has created, so nobody can give clear answers to many of the questions that will arise.

Empty all of her bank accounts prior to filing, you can only keep $2000 total, any more and the court will claim it for the creditors (my lawyer forget this little gem and it cost me dearly).

Her credit will be ruined no matter which filing she makes, and cannot be saved by stopping the proceeding, the credit hit is applied upon filing, no matter the outcome.

There are state laws which will determine whether she should try to keep her home, but in most cases she will have to sell her home to withdraw any equity she has. Same thing with cars, and other major assets (art, jewelry, furniture, etc.), they must be in other hands before she files, otherwise they can be seized by the court to satisfy her creditors.

As for her future employment picture, I wish I could offer hope, but between the blatant sexism, ageism, and the re:puke: economy, she should plan for a dramatic adjustment to her lifestyle, unless she has a very specialized and in-demand skill.

[Contrary1]

10. Thank you for all your comments and suggestions

I really appreciate the input.

My daughter and son-in-law just left a few minutes ago. Guess what? He has lost his job. The good news is that it has not been outsourced to another country...just to Florida. The bad news is that he has submitted 60 applications in the last 30 days with no response. They are already behind in their bills. :-(

Can someone please point me to where this vibrant economy exists that Bush is talking about? I would like to relocate there.