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socrateaser, Attorney
Category: Bankruptcy Law
Satisfied Customers: 39045
Experience:  Attorney and Real Estate Broker -- Retired (mostly)
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Please try to understand, its not that we dont want to pay

Customer Question

Please try to understand, it's not that we don't want to pay our bills, but for a long list of reasons it is hard to impossible, due to our ages and health, I'm concerned about being able to leave something for my wife to survive on when I'm no longer able to provide for her. I'm 58 with diabetes and my wife of 40 years is 59 and needs surgery on both of her knees. Both of my parents have past and my mother put everything in my brothers name. We were in a solo proprietorship business that after 12 years failed in 2005. WE had a lot of debts, a lot on our credit cards and two supplier have judgments again me, not my wife, but she is still getting collection call from credit card bills, 2-3 a week. Both of our grown sons are in prison from drug related charges, our home was all but destroyed by Dolly and I can purchase one of my father's rental properties from my brother, but we need to assure it doesn't fall under the judgments when we do. Bankruptcy, negotiated settlement, trust, ?
Submitted: 8 years ago.
Category: Bankruptcy Law
Expert:  socrateaser replied 8 years ago.

How much do you owe?


How much do you have?


How is it held (retirement account, bank savings, house equity, etc.)?


Customer: replied 8 years ago.
Bills total for all accounts about 125,000 to 150, 000 with two judgments at this time only in the companyname and my, not my wifes.

We may have 15, 000 in checking accounts, maybe 25,00 to 30,000 in retiremnet accounts mostly 401 k and IRA and about 5, 000 in cash. We are of course worries about having anything left to retire on.

My wife's job could which require her to be gone about 5 weeks at a time and home for two weeks may end any day now due to lack of work for the company and I've only been on mine since Aug. after a year off work due to the place closing. So as you can see we're living on the edge.
Expert:  socrateaser replied 8 years ago.

Ordinary creditors can't touch your retirement accounts, and in Texas can't garnish your wages, either. If you file bankruptcy jointly, you can keep up to $60,000 in personal property (furniture, jewelry, etc.). And, the $5,000 in cash, well that could be gone by tomorrow on the necessities of life.


So, it's only the $15,000 in the checking account that you may want to gamble away in a fit of dispair. Otherwise, you're a perfect candicate for Chapter 7 bankruptcy, which will make all your troubles go away.


For lawyer referrals, see:


Customer: replied 8 years ago.
The couple of assets I need to add to the list is of course the property we are lliving on, .85 acres with a house that has been made nearly unliviblydue to Dolly last Aug. and 2 trucks not running, one was my Dad's 2 trucks that "run" and my wife's 1999 GMC mini van all with about 150,000 miles on them. Also a boat that's not i my name, the owner died after I bought it. and a motorcycle. If I sold the whole lot with the exception of 2 for us to go to work I might get 2-3,000. One home computer and one laptop my wife takes on the road.

Expert:  socrateaser replied 8 years ago.

House is untouchable under Texas law, no matter how much equity it has -- unless there's a mortgage or an IRS lien.


The rest of the stuff is covered under the $60,000 rule previously stated.


Customer: replied 8 years ago.
I of course will accept your reply and thank you just one more item, please realize I'm doing this off the top of my head so I think this is the last thing. We sold our warehouse, which was in my youngest son's name at the time and have a second mortgage with about 12, 000 still due going into an account in my wife and mine names and my son is

divorced and in jail/rehab for the next year.

Again thank you for your time and concideration and upon your reply I will accept this, the only reason I haven't so far is fear of losing the likk to you directly as these thought came to mind.


[email protected]

Expert:  socrateaser replied 8 years ago.

IF you have a mortgage, then you simply continue to pay it, and the lender won't be able to foreclose your house. Or, you could use that $15,000 you have in the bank to pay it off, which would make the money untouchable, because it's in your house.


socrateaser and other Bankruptcy Law Specialists are ready to help you
Customer: replied 8 years ago.
Sorry you misunderstood my question.

We sold a warehouse from the business, and took a second mortgage of 15, 000 and have 12,000 still due to us, I'm hoping to either sell the mortgage to a third party or discount it to the buyer for early payoff before filing bankruptcy. If you have any other suggestions please let me know what options I might have.
Expert:  socrateaser replied 8 years ago.

Any sale of an asset for less than "reasonably equivalent value" (REV), if made within one year of filing the bankruptcy petition, can be avoided/set aside by the bankruptcy trustee. REV is sometimes said to be no less than 70% of fair market value, but there are some other elements that can cause the court to set aside a transfer for a greater amount, depending upon evidence of the debtor's intent.


So, my only thought here is to be careful how you value your assets if you choose to sell them.