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cfortunato
cfortunato, Attorney
Category: Bankruptcy Law
Satisfied Customers: 8023
Experience:  Bankruptcy professor.
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We are thinking of going bankrupt. Here are my questions: We

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We are thinking of going bankrupt. Here are my questions: We had our motorhome repossessed a year ago. We now owe the deficit of 85,000. We have not paid any of that. We own a home in AZ. Can we keep it? We have Credit Cards, we Am Express, Discover, and Capitol One are paid off every month, can we keep them? Bank Am and Citibank have large balances. We have a motor home in CA, the payment isn't big but with the space rent it is hard to make. We have a 2007 Saturn Vue and an 1999 motor home, both are paid off. Can we keep them? All our income comes from retirement. Our saving is used for paying quarterly taxes.

Blanche

cfortunato :

Hi - my name is XXXXX XXXXX I am a Bankruptcy and Consumer Protection attorney here to assist you.

cfortunato :

1) Have you lived in South Dakota continuously for the past 2 years?

Customer:

no, we are full time rv's. That is our residence but we are on the road for part of the year, stay in the AZ house for part of the year and volunteer Camp Host the rest of the year.

cfortunato :

Since you have not lived in one place continuously for 2 years, the Bankruptcy court will apply a special formula to determine which state's exemptions you will be able to use.

cfortunato :

You will have to use the exemption for the state where you have lived the longest amount of time in the period of 2 years - 2 1/2 years before you file.

Customer:

OK so now what does that mean exactly.

cfortunato :

If you filed right now, you would have to look at where you lived during the months of April - September 2011.

cfortunato :

If you filed in November, 2013, you would have to look at where you lived during the months of May - October 2011.

cfortunato :

The Bankruptcy court does this to prevent filers from purposely moving from one state to another in order to use the most beneficial Bankruptcy exemptions.

cfortunato :

Once you are able to determine which state's exemptions you have to use, then you will know which property you will be able to keep if you file a Bankruptcy - as this will vary depending on which state's exemptions you have to use.

Customer:

That would be AZ but we are residences of SD, we vote there, our bank accts are there we pay taxes in SD. We are thinking of filing in Jan 2014. We bought our house in AZ in March of2011

Customer:

I had no idea this was going to be so complicated.

cfortunato :

If your permanent residence is South Dakota, that is considered to be the place "where you live". It does not matter that you travel.

cfortunato :

In other words, since South Dakota has been your permanent residence for the past 2 years, you would be using South Dakota exemptions.

Customer:

Good, I guess,

cfortunato :

So you live in a motor home when you are in South Dakota?

Customer:

Yes

cfortunato :

You would be able to keep that motor home, as that home would be considered to be your homestead.

Customer:

good

cfortunato :

Whether or not you would be able to keep the AZ home would depend on how much equity that home has.

cfortunato :

What is the current market value of that home?

cfortunato :

And what is the balance - if any - owed on any mortgages for that home?

Customer:

Not sure, we paid 70,000 in march 2011. I doubt if it's gone up much

Customer:

We owe approx 55,000

cfortunato :

As you would be able to keep up to $8,000 worth of property, you would also be able to keep the AZ house - as it has less than $8,000 equity after deducting 15% cost to sell and trustee fees, and after deducting the balance owed for the mortgage.

Customer:

What about savings accts and CC

Customer:

what about the car

cfortunato :

Your credit card debt would be discharged in your Bankruptcy - along with the balance owed for the motor home ($85,000).

cfortunato :

If you file a Bankruptcy, you will be able to keep up to $8,000 of any property - including cars and bank accounts.

cfortunato :

You are the one who decides which property you want to keep.

cfortunato :

If you decide to keep the AZ house, that will reduce the $8,000 by approximately $4,000.

cfortunato :

How much is the car worth?

cfortunato :

How much money do you have in your savings account?

cfortunato :

Also, what is the source of the money in your savings account? (Is it from retirement income, for instance?)

Customer:

I do not know but probable more then 4000. At least to us it is. Yes all our money is retirement money. we do not have any other income.

cfortunato :

Since the money in your bank account is from retirement, which is exempt, that bank account will be exempt, regardless of how much money is in it.

cfortunato :

If the car is worth more than $4,500 - $5,000, you will have the option of paying the balance to keep it.

Customer:

If we have CC that are 0 balance do we keep of them?

cfortunato :

If you file a Bankruptcy, most CC companies will cancel the account, even if the balance is 0.

cfortunato :

But you will still be able to keep any bank debit cards.

Customer:

Thanks for your help. You gave us some food for thought.

cfortunato :

You're welcome!

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