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This isn't me, it's a guy I know. He lives in Nevada, crashed a brand new truck (without insurance) and went out and 'bought' ANOTHER brand new truck (now he has TWO truck payments). He bought some electric guitars, a drum set, amplifiers, 300+cds, ANOTHER Mac, he bought his $475,000 house about 5 years ago (it's worth less now), eats at super expensive restaurants, and just feels (and acts) like he is a person who deserves priveledges that we (lowly normal people) shouldn't get.
Anyway, he isn't responsible in the least.
I'm sure the judge will review his spending habits (right?).
This guy just spent $40,000+ before he is going to declare bankruptcy, and he's convinced that he will get to keep all of his purchases.
Any predictions?
I'm probably going to e-mail him this question/answers, so lectures are encouraged.

2007-12-29 10:08:34 · 8 answers · asked by Anonymous in Politics & Government Law & Ethics

I'm scratchin' my head here...it's WAY more than $40,000.

2007-12-29 10:28:03 · update #1

8 answers

Ok here we go, assuming chapter 7 under chapter 7 he would have to turn over all his non-exempt property.

His homestead is exempt if worth under $350,000 it can’t be forced into sale, but he’ll still have a mortgage and the mortgage company can foreclose on it.

Also exempt are private libraries works of art, musical instruments and jewelry not to exceed $ 5,000 in value, belonging to the judgment debtor or a dependent of the judgment debtor, to be selected by the judgment debtor, and all family pictures and keepsakes.

So he can keep up to $5,000 worth of the electric guitars, drum set amplifiers.

Necessary household goods, furnishings, electronics, wearing apparel, other personal effects and yard equipment, not to exceed $ 12,000 in value.

Farm trucks, farm stock, farm tools, farm equipment, supplies and seed not to exceed $ 4,500 in value.

One vehicle if the judgment debtor's equity does not exceed $ 15,000.

And other exempt property, as proscribed under the law.

Assuming I added right, he’ll be able to keep, not counting his home, about $35,000 of stuff, including his car or truck.

Now he would still owe for payments on the truck, house, they are secured by an asset.

Under chapter 13 he would keep the assets, but he would have to pay for all of them, normally a 3 to 5 year plan.

Even under chapter 7 if he makes more then the state's median income he would be required to pay back at least a portion of his debts.

Also under Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA) BAPCPA also requires individuals seeking bankruptcy relief to undertake credit counseling with approved counseling agencies prior to filing a bankruptcy petition and to undertake education in personal financial management from approved agencies prior to being granted a discharge of debts under either Chapter 7 or Chapter 13.

So assuming he make more then the state’s median income about 50,000 he would have to pay some of it back. He probably won’t get to keep the truck, his house may be sold if it’s worth more then 350,000 and even if its not he’ll still have to make payments. Also under BAPCPA, if I remember right, any debt he run up in anticipation of bankruptcy could be found exempt from bankruptcy that is he’d have to pay them back.

Here’s my preduction, he’s going to lose a lot of his stuff, he’ll end up paying a lot more then he thinks, he won’t get any credit for a few years, and he’ll be eating a lot of mac and cheese, and crying how unfair it was.

This type will almost never learns. So expect to see him back in bankruptcy in about 8 or 9 years.

2007-12-29 11:04:18 · answer #1 · answered by Richard 7 · 2 0

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RE :What happens when you buy frivolous things before declaring bankruptcy?
This isn't me, it's a guy I know. He lives in Nevada, crashed a brand new truck (without insurance) and went out and 'bought' ANOTHER brand new truck (now he has TWO truck payments). He bought some electric guitars, a drum set, amplifiers, 300+cds, ANOTHER Mac, he bought his $475,000 house about 5 years ago (it's worth less now), eats at super expensive restaurants, and just feels (and acts) like he is a person who deserves priveledges that we (lowly normal people) shouldn't get.
Anyway, he isn't responsible in the least.
I'm sure the judge will review his spending habits (right?).
This guy just spent $40,000+ before he is going to declare bankruptcy, and he's convinced that he will get to keep all of his purchases.
Any predictions?
I'm probably going to e-mail him this question/answers, so lectures are encouraged.
Update: I'm scratchin' my head here...it's WAY more than $40,000.
Follow 7 answers

2016-10-07 06:01:08 · answer #2 · answered by Buffy 6 · 0 0

For a very similar situation a found a great solution at: CREDIT-SOLUTIONS.INFO-

RE What happens when you buy frivolous things before declaring bankruptcy?

This isn't me, it's a guy I know. He lives in Nevada, crashed a brand new truck (without insurance) and went out and 'bought' ANOTHER brand new truck (now he has TWO truck payments). He bought some electric guitars, a drum set, amplifiers, 300+cds, ANOTHER Mac, he bought his $475,000 house about 5 years ago (it's worth less now), eats at super expensive restaurants, and just feels (and acts) like he is a person who deserves priveledges that we (lowly normal people) shouldn't get.
Anyway, he isn't responsible in the least.
I'm sure the judge will review his spending habits (right?).
This guy just spent $40,000+ before he is going to declare bankruptcy, and he's convinced that he will get to keep all of his purchases.
Any predictions?
I'm probably going to e-mail him this question/answers, so lectures are encouraged.

2014-10-03 01:52:31 · answer #3 · answered by Anonymous · 0 0

It depends on what cahpter he files. If he files a chapter 13 he will have to make a monthly payment that the court determines based on how much in debt he is. Ifhe files a chapter 7 then he gets his debt dismissed, he will be able to keep some property.

Howver, If he acting this foolishly, I hope they toss his rear in the clink for fraud. Most states actually have laws against acquiring anymore debt prior to filing bankruptcy. Bankruptcy isn't a solution for stupidity and poor financial planning.

2007-12-29 11:10:35 · answer #4 · answered by Anonymous · 2 0

If he declares chapter 13 he will still have to pay back part of what he owes. They will garnish his wages, and now that they changed the laws he will have to go through 6 months of financial counseling before being allowed to file. With the chapter 13 he will be able to keep everything as long as he can make the payments. Usually the interest is cut out or cut down. If he files a chapter 7 he will most likely lose his home and car, or anything else that is being financed. He will still have to go through the financial counseling.

2007-12-29 10:14:31 · answer #5 · answered by Ryan's mom 7 · 2 0

I surely hope that this will backfire on him. This is what I can't stand about bankruptcy policies is the fact that people are extremely irresponsible about their own spending practices and expect that the people who pay their pay their bills have to foot the bill.
Bankruptcy laws have become tougher and I am sure that he will have to pay a large sum of debt.

2007-12-29 10:14:39 · answer #6 · answered by HAGAR!!! 6 · 2 0

under new bankruptcy laws, chapter13 is no longer available to most people. He will most likely be required to sell everything except items a judge determines as essentials.

2007-12-29 10:18:04 · answer #7 · answered by Jan Luv 7 · 1 0

The Judge can hold him criminally liable for his actions.

If he deliberately did this, it's fraud and he can go to jail.

The Judge can also decline to grant bankruptcy and make him pay all of this.

2007-12-29 10:52:24 · answer #8 · answered by Anonymous · 2 0

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