Or, why you can’t afford not to hire a bankruptcy attorney.
I was sitting in on some meetings of creditors today and heard the trustee tell unrepresented married debtors that they would have to surrender their vehicles or buy them back from the trustee. I could tell that the debtors had no idea what the trustee was talking about because they kept saying that they owned the vehicles free and clear. They did not understand that everything they owned when they filed bankruptcy became part of the bankruptcy estate and was subject to sale and distribution to creditors, except for property that was claimed exempt on Schedule C or property where they owed more than it was worth.
The trustee confirmed with the debtors that they used § 704 exemptions, which is not very common these days in California. One of the § 704 exemptions protects equity in a property, which is usually the main reason for choosing this set of exemptions. After the meeting, I went and looked up the schedules that the debtors had filed with the assistance of a non-attorney petition preparer.
The debtors had no equity in their property and had no reason to use the § 704 exemptions to exempt the property. In addition, the exemption for a motor vehicle was used for an RV with no equity instead of the 2 vehicles they use to get to and from work.
At the end of the meeting, the debtors ended up having to buy back their vehicles for $10,000 from the trustee. With proper legal representation, it is likely that they would not have had to pay anything and kept all of their property – and there is also a good chance that the attorney fees would have been a lot less than $10,000.
A bankruptcy attorney’s job is not to simply prepare a bunch of paperwork for you. My job is to help you understand how the bankruptcy process works, explain your options for the property that you own, and help you make a fresh financial start. Please feel free to contact me to schedule an appointment to discuss your options.
This is just a basic overview and is not legal advice specific to your situation. If you are considering bankruptcy or are facing foreclosure, you should speak with an attorney in your area for legal advice. To speak with me regarding your situation, please email me at [email protected] or call 925-586-6738