Hi:We are filling for bankruptcy. I could not afford an attorney at $3500.00 so I filled out all of our paperwork ourselves. The only problem I was having is the Schedule C - Property Claimed as Exempt. I put our household goods, wearing apparel, animals, books etc. The only thing I didn't know what to do with is a Crysler Van which we owe the bank $3400.00 and a motorcycle which we owe a finance company around $6,000.00. There is no equity in these items but I don't want them to take them away if I don't put it on our schedule C. Bankruptcy court has advised the bank about our chrysler van and Wells Fargo has sent us reaffirmation agreement but for the motorcyle I don't think the finance company was noticed. I saw something about that they don't allow more than 2400.00 for a vehicle???
State/Country relating to question: Connecticut
The first thing you need to know about the exemptions is that you have a choice of which set of exemptions to use. You can use the federal exemptions that are laid out in the Bankruptcy Code, or you can elect to use your state exemptions (I presume Connecticut). In Texas, Debtors use the State exemptions the majority of the time. You should Google the Connecticut exemptions (someone will have a list) and see if they are better or worse in your case.Second, keep in mind that Chapter 7 only discharges unsecured debt. So the Chapter 7 doesn't keep the bank from foreclosing on the house or the car company from ultimately repossessing the car if you aren't current. However, if there was a foreclosure, the bankruptcy does discharge your liability for any deficiency on the debt. If your primary purpose of the bankruptcy was to save the house/car and you can't work out a deal with the bank, you'd probably need a Chapter 13.With respect to the van and motorcycle, if there is no equity in them, it really doesn't matter if they are on Schedule C because your are really only exempting the "equity" in the car. Note that the Schedule C asks you to indicate the "value of the claimed exemption" the property. "the value of the exemption" is just the equity. However, to be safe, list the car/motorcycle on Schedule C and take your best guess as to what the equity value is.However, remember that listing it on Schedule C does not protect it from the bank. As to the reaffirmation agreement, those are tricky. Generally, I never recommend clients to sign them. Especially if there is a possible deficiency. Usually they just get away with continuing to make the monthly payments. The one exception is that some banks say that they will foreclose if they don't get a reaffirmation agreement, regardless of whether you are making payments. The argument is that there is no payout agreement because of the discharge and the whole debt becomes due (as to the collateral only) and they can immediately foreclose. Most banks don't do that though. With respect to the $2,400 for a vehicle, that only refers (under the federal exemption) to the value of your equity in the car (the difference between its value and the debt) -- by the way (it's $3,450 under 11 USC 522(d)(2)) You also have a "catchall" exemption of $10,825 if you haven't used it for your house.Generally, I would say list it all on your Schedule C, keep making your payments on the house/car and you'll be fine on this issue.Sorry for all the words, did that answer your question?
Good advice. I don't have a house and I am not deficient on my vehicles so I think I'll be ok. Now, value of claimed exemption means how much I owe on the car? Current value of Property is what it worth? right?
The value of the claimed exemption is the value of the car, less what you owe on it. (The equity in the car). It's the amount you would get if you sold the car and paid of the bank. From what you were saying, you owe more than the car's worth. Thank makes the equity in the $0 and the value of claimed exemption is also $0. However, put $3,450 on the Schedule C anyway just in case your opinion is wrong.Yes, Current Value of Property is what it's worth.Let me know if you need anything else! Good luck!
One more question. Schedule B - Personal Property. I listed the household goods (current Value of Debtor's interest in property) at $1000.00. That is why on Schedule C, I thought the totals have to match, in other words I put Value of Claimed exemption at $1000.00 also but Current Value of Property I wanted to put around $500.00 because that is what it is probably worth. Am I right to do that? Same with Wearing apparel etc, etc.
Yes, that is appropriate.The only theoretical issue is that if you valued something at $1,000, put it on Schedule C as $1,000, the Trustee (for whatever reason) got hyper-aggressive and sold the item for $10,000, you'd only get the $1,000 as "exempt"Just make sure your valuation is correct and use the value in both places. Use garage sale/craigslist value for household stuff.But, you're on track with your gut feel.
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