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cfortunato, Attorney
Category: Bankruptcy Law
Satisfied Customers: 8023
Experience:  Bankruptcy professor.
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I Live in California. I need advice on some of the exemptions

Customer Question

I Live in California.
I need advice on some of the exemptions in this state.
Married, one child, 2 car payments(lease one, loan on another),renting a home and own a business, current on all personal and business credit and loan accounts(business loan and student loans,credit cards). Excellent credit. I own a lot with a family member, not worth more than $25000.

Business not doing well,breaking even every month and strongly considering on filing. Problem is, that I personally garuanteed the business loan, over $1 million. The seller misrepresented the P and L's and I dont have hard proof. I looked into suing. I cant afford to retain an attorney. I have no way out.
We are making a paycheck every month but the business is not viable.

How much money can I have in my personal checking account(each of us, wife and myself)
that can be protected?

Can bankruptcy discharge be denied based on my circumstance?

Can my lot be exempted if I make it a burial plot? should I sell it?

If I were to start withdrawing money from my checking account, would saying I was wrecklessing spending it, gambling,etc... hold up in court?

How much am I allowed to donate as a gift to relative per year?
Submitted: 6 years ago.
Category: Bankruptcy Law
Expert:  cfortunato replied 6 years ago.

Hi JACustomer,

What is your net gross monthly household income. (Net gross = the gross income minus business expenses.)

Customer: replied 6 years ago.
Expert:  cfortunato replied 6 years ago.
Last question - what is the source of the $6000 - $8000 per month net gross income?
Customer: replied 6 years ago.
I pay myself as an employee from my business.
I pay my wife as well. We are both medical professionals.
As you know, those student loans akins, ake a big chunk of our paychecks!
Expert:  cfortunato replied 6 years ago.

Another last question - is the 1 million debt secured or unsecured? (Can the creditor take the business - or anything else - if you do not pay?)

Customer: replied 6 years ago.
They can take it. It was unsecured. I listed my property lot that I have(my partner is a relative). Not worth more than Maybe $30000 or $40000. I lease a car and I also make payments on my wife's car. I don't own anything else. I have some money in my checking account that I hope I can save. I partially support my elderly parent as well.
Expert:  cfortunato replied 6 years ago.

Your gross monthly income is close to the state median, which means you may not qualify for a Chapter 7. However, you can deduct what you pay for your parent from your income. How much do you pay per month to support your parent?

Customer: replied 6 years ago.
I'm really hoping to get out of this bad business decision(been a nightmare).
I'm fine with losing the business and starting fresh. I really want to bankrupt my business only but since I personally garuanteed it, I will need to file personal as well. This according to an attorney I spoke with here. I just can't retain anyone until I'm ready to file.
Im looking to make the best choice and have a strategy. Thank you
Expert:  cfortunato replied 6 years ago.

To qualify for a Chapter 7, your total household gross monthly income must be less than - or not much more than - $5,723. As the court looks at the average monthly income for the 6 months before filing, and you can deduct the $1,000 that you pay to support your parent, you may and may not qualify to file a Chapter 7 Bankruptcy - which would allow you to have your debts discharged without having to pay anything.

If your income level does not allow you to file a Chapter 7, you would be able to file a Chapter 11, which would require you to make some payments to your creditors.

In either case, you would have a $21,825 exemption for all property, including your share of the lot, and all bank accounts.

Regarding the lot, it would not make a difference if the lot was designated to be a burial plot - the same exemption would apply.

If you withdraw the money from your bank accounts, the trustee can - and probably will - ask for proof of what you did with it.

You are allowed to give up to $200 per year per family member (not including the support for your parent). The Bankruptcy trustee can take back anything that was given away in the 2 year prior to filing the Bankruptcy that does not fall into this parameter.


I think this is what you wanted to know. If not, please let me know.

Thank you!


Customer: replied 6 years ago.
If my monthly paychecks,(and my wife's) were being cashed every month, and I were splurging it(gambling, buying things cash), and there is no way to prove-no paper trail- how can I generate proof for the trustee? Can the bankruptcy be denied?

Expert:  cfortunato replied 6 years ago.
The Bankruptcy trustee can ask for proof if you withdraw substantial amounts of money from your bank accounts, not for proof of what you do with your regular paycheck.
cfortunato and other Bankruptcy Law Specialists are ready to help you
Customer: replied 6 years ago.
In your experience, when do you see court denying discharge? That's my only worry. Does my case seem typical for discharge?
Expert:  cfortunato replied 6 years ago.

Thank you for accepting my answer! And thank you for the bonus!

Having assets, or having had assets, is not a reason for dismissal.

The only reason for dismissal - that I know of - is income that is too high.