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cfortunato, Attorney
Category: Bankruptcy Law
Satisfied Customers: 8023
Experience:  Bankruptcy professor.
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I have Bipolar I Disorder w/Psychotic Episodes. Was stable

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I have Bipolar I Disorder w/Psychotic Episodes. Was stable for 23 yrs on my job had to retire in '04. I had a long fight with a County retirement system to get my disability retirement (non job related). It cost $17K in med/legal fees. During this time my husband & I moved out of Sacto to Lakeport for my mental health. Due to continued money issues we had to take a second on our house in Lakeport in '07, then again due to continued cost of the lawsuit & my medical bills we put a lot of normal daily expenses on credit cards. During this time my mania was out-of-control, I had psychotic episodes & depersonalization episodes. I would spend many hours shopping, much of the time not realizing how long/how much I was actually spending. Home was forclosed on, we rent now, we owe approx $40K. Now IRS says we owe them $7K due to errors. We are on Kaiser, but legally shouldn't be (out of area), can't afford other insurancewith the debt. Hubby's only outlet is bass boat/will he lose in Bankruptcy
Submitted: 7 years ago.
Category: Bankruptcy Law
Expert:  cfortunato replied 7 years ago.
Hi butterfly,
What is the mileage on the Mini Cooper?
What is the year, and also the mileage on the Jeep?
What taxes (year and type) are being claimed by the IRS?
Customer: replied 7 years ago.

Hi Christina,


The mileage on the Mini Cooper is 53,000.

The Jeep Liberty is a 2004 and has 96,000 miles.

The taxes owed are from 2008. We just received a notice saying we made a mistake on our return and put in the wrong amount on our taxable income. My husband and I had a really difficult time doing our taxes that year because it was when I had received my lump sum settlement from the County of Sacramento for my back pay on my disability retirement. Apparently, we didn't put the correct amount in.

I also wanted to say that the issue with our medical insurance is bad because we live out of the service area but the difference in cost is about $600 a month for the insurance that is accepted where we live. The only way we can afford to pay for that insurance is if we can get rid of this debt. Because we both have such critical need to have medical resources close by, this is one of the reasons I think we should look at bankruptcy.

The other taxes owed are from the current tax year (2009). When our home was being foreclosed on we moved out and rented a place instead of staying in the home. We should have increased our tax withholding, but at that time we had so much else going on that we didn't even think about it.

Thank you for looking at this for me - last night I completely broke down over all this and had to take some of my emergency medication that I keep on hand and go to bed. I fear I may be headed for another hospitalization. It's difficult for me to push my husband too much on all this because he is much older than me. I'm 53, he's 67 yrs old and has very severe cardiac disease, diabetes, depression, severe arthritis in his spine, and has just been diagnosed with a movement disorder called senile gait disorder which causes him to be unsteady on his feet. Our total credit card debt is approx $35,000.

So thank you so much!


Expert:  cfortunato replied 7 years ago.
When a debtor files for bankruptcy protection in California, there are 2 sets of exemptions (property the debtor can keep) available to choose from.
Since you don't own a house, but you do own other property, Set #2 would probably be the better choice, because you are allowed to apply the homestead exemption (currently $20,725) to other property.
I am not sure what else you own, but basically you are allowed to keep cars with combined value of up to $3,300. Since your cars are worth more, you can use part of the homestead exemption for this.
Whether or not you can keep the boat depends on what the boat is worth and if it is paid for.
Try not to get too stressed over the taxes. It is too early to have those taxes discharged in a bankruptcy proceeding (would have to be taxes owed from more than 3 years ago), but you may be able to deal with this by submitting an "Offer in Compromise", which basically tells the IRS that you cannot afford to pay those taxes. If you can prove that you really cannot or can only pay part, they will cancel the debt, reduce the debt, allow you to pay it off, or both.
cfortunato and other Bankruptcy Law Specialists are ready to help you
Customer: replied 7 years ago.

Thank you so much for this information. I can show it to my husband and try to talk him in to setting up a consultation with a bankruptcy attorney in our County, or in Santa Rosa. He just keeps saying if we just keep paying on our bills we should have them paid off in 5 years, but something else always comes up that pushes us further behind. Also, the credit card companies have raised their interest rates over the past 9 months since the government said the new laws were going to go into effect beginning 2010. Some of our rates went from 12% to 29% when we did nothing wrong. They just wanted to get the rate raised before the new law went into effect. So, now that makes it almost impossible for us to pay off our debt.


Anyway, thank you so much for your time and care you have given me.



Expert:  cfortunato replied 7 years ago.
You're welcome! And thank you for accepting my answer!