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Hi. I have a lot of financial issues and want to ask about

Hi. I have a...
Hi. I have a lot of financial issues and want to ask about bankruptcy. I owe a bank $20,000 on a business credit line. If I file for bankruptcy, what will be the consequences? I own a business as a sole prop. I also own a home.
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Answered in 5 minutes by:
1/3/2012
WALLSTREETESQ
WALLSTREETESQ, Attorney
Category: Bankruptcy Law
Satisfied Customers: 17,253
Experience: 14 years exp., CH 7 AND 13 Bankruptcy cases, AFL-CIO UNION PLUS, UFT NYSID AND ALL MAJOR UNIONS
Verified

WALLSTREETESQ :

Hello I am a licensed attorney here to help you with your question, please review my response and do not hesitate to ask for clarificati on

WALLSTREETESQ :

Do you have any equity in the home?

WALLSTREETESQ :

Do you have any assets in the business in your name?

WALLSTREETESQ :

If you file a bankruptcy the 20,000 could be discharged, however your credit would be hurt for a few years,

WALLSTREETESQ :

and any non exempt assets you own could be taken to pay off the debt

WALLSTREETESQ :

If your home has limited equity, and your business has limited assets, than a bankruptcy would be fine and you would not be hurt too much

WALLSTREETESQ :

here are some of the exemptions you can claim if you choose to file:
• Homestead Exemptions: Most people can exempt up to $75,000 on their homestead, but this climbs to $150,000 for anyone 65 or older, disabled, or 55 or older if their gross income is less than $15 - $20,000.
• Wages: Under the wages exemption, a bankruptcy lawyer in California may help you to keep up to 75% of your wages.
• Autos: The automobile exemption helps you save up to $2,300 of equity in autos.
• Personal Property:will help you to save up to $6,075 for these items. This exemption can also be applied to tools you use for your business or profession.

Customer:

I don't have any equity on the house. Can you give me an example of what kind of assets in the business? I own a gym. What does homestead mean?

WALLSTREETESQ :

Do you own the gym or have a lease?

Customer:

In regards XXXXX XXXXX wages, what do u mean by helping me keep up to 75% of my wages? How does that work?

Customer:

I lease the place

Customer:

It is a Curves franchise

WALLSTREETESQ :

In terms of wages, how much is your current income?

WALLSTREETESQ :

Is the lease worth anything if sold?

Customer:

I am losing $ on my business since the recession. As of today, I only make anywhere from $1000-$2000 a month (this is after I have paid all my bills).

WALLSTREETESQ :

Is the lease worth anything, and is it in a corporation or your personal name?

Customer:

I may not be even able to sell it. My franchise is losing $. I have seen other Curves owners try to sell theirs for $1 just to get it out of their hands. Most of them close it down.

Customer:

It is a personal name

WALLSTREETESQ :

than you are fine,

WALLSTREETESQ :

these assets are not worth anything,

WALLSTREETESQ :

in terms of the wages, that is if you have certain income saved in a bank account,

WALLSTREETESQ :

75% would be protected if it is over a certain amount, in your case, where you have limited income,

WALLSTREETESQ :

it is not an issue

Customer:

I have about $8,000 saved in a savings...will that be a problem?

WALLSTREETESQ :

It could be, as $6075 is protected,

Customer:

huh?

Customer:

oh, i see

WALLSTREETESQ :

however, you can use the money to purchase exempt property such as an IRA, to protect some of it,

Customer:

How much does it cost to file?

Customer:

ok

WALLSTREETESQ :

their is a personal property exemption of $6075

Customer:

does personal property include the car?

WALLSTREETESQ :

Their is a $2300 exemption in a car,

WALLSTREETESQ :

If you own the car and it has more than $2300, it could be sold

Customer:

what if my car is worth $5000? What would happen with the 2300 exemption?

Customer:

oh, i see

Customer:

will I be forced to sell it?

WALLSTREETESQ :

Yes, it could be sold, or you would have to give the court the $2700 extra

Customer:

So in short, I won't lose my business or house?

WALLSTREETESQ :

no,

Customer:

how much does it cost to file?

WALLSTREETESQ :

You should seek counsel from a local CA bankruptcy attorney, but from the facts you have stated, with your limited assets, and income, you should be fine

WALLSTREETESQ :

$350 for the Court, and certificates required, and $500-$1500 for an attorney if you use one

Customer:

is it possible to file on my own without paying anyone?

WALLSTREETESQ :

Yes, it is possible, but difficult, I would look into a paralegal service which their are many online who just prepare the petitions for you they are cheap

WALLSTREETESQ :

Also, a website like craigslist has bankruptcy petition petition paralegals as well

Customer:

will they be able to counsel me?

Customer:

the paralegal, i mean?

WALLSTREETESQ :

no counsel,

WALLSTREETESQ :

only to prepare the peitition

Customer:

would it still be cheaper if I pay for counsel, and then go to a paralegal for the paperwork?

WALLSTREETESQ :

In your case I would shop around a chapter 7 may be $900, while a paralegal is $200

Customer:

$900 to whom? the lawyer for counsel?

WALLSTREETESQ :

yes the attorney fee

WALLSTREETESQ :

If you have any further questions please do not hesitate to ask

WALLSTREETESQ :

If satisfied with our service please press the accept button so we can receive credit

Customer:

do you recommend anyone in the Ontario, California area?

WALLSTREETESQ :

we are not allowed to,

WALLSTREETESQ :

you can use craigslist, or online to find a local attorney or even contact the local bar association,

Customer:

oh, i see. So can I ask u questions if I have any regarding the same things in the future?

WALLSTREETESQ :

yes, you can ask for wallstreet esq, and I will be happy to assist you

Customer:

oh, one last thing...can the bank sue me after i file for bankruptcy?

WALLSTREETESQ :

no, once you file bankruptcy all civil actions must stop, and all debts can be discharged, unless they are taxes, or child support

Customer:

ok...thank you so much!!! I will click the accept button now. Happy New Year!

WALLSTREETESQ
WALLSTREETESQ, Attorney
Category: Bankruptcy Law
Satisfied Customers: 17,253
Experience: 14 years exp., CH 7 AND 13 Bankruptcy cases, AFL-CIO UNION PLUS, UFT NYSID AND ALL MAJOR UNIONS
Verified
WALLSTREETESQ and 87 other Bankruptcy Law Specialists are ready to help you
Ask your own question now
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WALLSTREETESQ
WALLSTREETESQ
WALLSTREETESQ, Attorney
Category: Bankruptcy Law
Satisfied Customers: 17,253
17,253 Satisfied Customers
Experience: 14 years exp., CH 7 AND 13 Bankruptcy cases, AFL-CIO UNION PLUS, UFT NYSID AND ALL MAJOR UNIONS

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