Another Bankruptcy Q Chap 7 - Past Due Property Tax - Dischargable?

In My Humble Opinion
21

Thanks!

Saw a lawyer at length yesterday.

As I expected (but hope springs eternal!), secured debts cannot be discharged without losing the property securing them. So taxes on real estate, motor vehicles, etc are secured by the property on which they are secured, and are, therefore, non-dischargeable.

As to listing each and every: Appears to (at least in CA, I believe this is Federal):

If I got this right (and the lawyer did as well):

There are two classes of chap 7:

Asset and non-asset.

You are allowed to come away with the shirt on your back, and a bit more*.

If there are assets beyond the allowed amount (an “Asset Bankruptcy”), an unlisted creditor has recourse - since there was a chance he would have gotten a piece of the pie, he is entitled to get what he would have gotten had he been notified
If, as in most cases**, your assets do not exceed limits (No Asset Bankruptcy), it is a good idea, but, since they would not have been entitled to anything anyway, they either will have no recourse, or will be looking for a (very) long shot.

But yes, by law, you are responsible to know each and every debt, and it is your responsibility to find the creditor and pay them - it is NOT the responsibility pf the creditor to track you down and demand payment. “They never sent me a bill” is NEVER a defense for not paying a debt. A quick reflection of the resulting situation in the courts if that was NOT the case will show why the rule is as it is. I’m a fan of chaos, the courts, not so much…

Those who have responded: Thanks so much for your time.

    • You literally DO NOT show up with ANY CASH - they will seize it right there in front of god and everything.

** - by the time you are talking to a Bankruptcy lawyer, most stuff is gone,and anything left will be taken up legal fees (yes, they are smart enough to get paid up front).

22

All very good advice. See, you did get something for your $1500! :slight_smile:

I think those stories about the trustee snatching stuff from you are somewhat exaggerated. If you have listed that cash in your schedules, then it is no different than if it was sitting at home.

However, I do remember someone who didn’t list grandma’s engagement ring (a nice one) on her schedules because it would have been non-exempt because it was too valuable. Unfortunately for her, she chose to wear it to the 321 meeting and kept flashing it in front of the trustee’s face. He took it and she was crying and screaming.

She was told that she ought to be happy that she wasn’t being charged with a felony bankruptcy fraud count for not listing the ring. She eventually “found” some money somewhere else to repurchase the ring from the estate.

There is a lot of this type of fraud in Chapter 7 and 13 bankruptcies and even though I hate creditors, this is wrong. As a debtor, you are getting a full discharge of debts that you lawfully owe. The law gives you certain exemptions. For a debtor to keep above and beyond that is simply theft.

23

Speaking of inheritances:
After my parents died, the few item of value which had originally been my grandparents’ were distributed.
I have a few items, none of which are valuable, so it would not apply to me but:
As I have never used any of the items (arrowheads found behind a mule-pulled plow in the 1890’s-1920’s, trivial jewelery which was a big deal for a girl growing up on a poor dirt farm), do I need to declare these as mine, when, in fact, I am holding them for my nieces and nephews?

I’m going to mail them to my sister before I file, with instructions to distribute as she sees fit, just to be sure.