Retained A CH: 7 Lawyer - I have some questions.

[SanDog11]

Hello Everyone,

First of all I want to say thanks for any replies, this site has helped a bunch. 

I have 45K in debt, and I just stopped paying on all my cards, because I had no choice. I stopped paying on my two biggest cards 6 months ago. I have also sent cease and desist letters to each creditor, except for my two Chase cards, which I'm almost 30 days late.

I also bank with CHASE, so I am opening up a new checking account elsewhere this weekend, and then I will be send CHASE a cease and desist letter as well.

I will most likely have a no-asset CH 7 becasue I have no assets. I rent, own 1 truck, which I only owe 4K left, and this will not be including in the CH 7. According to my lawyer my 1 car is save.

I have one pension/retirement fund, which he also said is safe, as it's exempt.

As for non-exempt, I have three brokerage invenstement accounts that was supposed to pay off my debt before I lost it all. My portfolios are in the range of 88-98% down right now, and this brings me to my question.  Can the trustee force me to sell at a major loss when the real cash value of my brokerage accounts are less than 4K?? That and my truck is all I have, and from what I'm reading I should be safe.

I did not plan on doing CH 7, but I live in California, and I want to put myself on a 3 year plan to get the hell out of here and buy a home in 3 years with my pension money (30K in now but slowly dropping in this market) There is NO WAY I will ever be able to pay off my debt.

I'm also hoping that I can get to the CH 7 discharge date before my stocks recoup my inital invenstment. This way I will be in good shape.

Does anyone have any info with brokerage accounts and whether someone like me with no assets will be able to protect them? I have zero savings, zero toys, zero extra automobiles, and I am single. 

thank you all!

[despritfreya]

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@SanDog11 wrote:

I will most likely have a no-asset CH 7 becasue I have no assets. . .  As for non-exempt, I have three brokerage invenstement accounts that(are currently worth less than $4K). . . Can the trustee force me to sell at a major loss. . .?

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The short answer is YES.  The Trustee has no duty to "protect" you.  His/her duty is to liquidate non-exempt assets for the benefit of creditors.  He/she has a fiduciary duty to the creditors - not the debtor - ergo, the Trustee is not your friend.  If the brokerage account is not protected by an exemption, and the Trustee believes there is sufficient value to close it out and take the cash, he/she will take control of it for the benefit of creditors.  That is his/her job. 

You are in California.  Assuming you have been there for at least 2 years, you are going to use one of the two California exemption provisions.  There is a "wild card" in at least one of them where you may be able to protect (exempt) the current value of the portfolio.  Your attorney should be dealing with this.  Talk to him.

Des.

[SUPERSQUID]

Each state has its own rules regarding what assets you can keep. in my state i was able to keep my vehicle and i live in a manufactured home and i was able to keep that because it has no land attached. in my case my lawyer made me get professional estimates on the value of my vehicle and home and i had to make an itemized list of everything i owned and its value, my state has a max amount of personal property you are allowed to keep so i kept everything.

The previous poster seemed familiar with california rules so id heed that advise plus i would definitely bring these questions up with your lawyer.

[_NERD]

Someone else mentioned wildcard being possible. There's two types of Ch7 in California: one being for homeowners and one for people who don't own a home. I believe the latter is the one that gets the wildcard. 

I emerged from ch7 in California with the DC being filed just over a month ago. I own a home so I went the homeowner ch7 route.  I owned cryptocurrency at the time of my consultation with the bankruptcy lawyer. He said the crypto was an unprotected asset so sell it before filing. It was only worth about $2k at the time and the money was exempt because it fell within the scope of being a reasonable amount of cash needed to make ends meet. I ended up using some of those funds to pay the lawyer in full, and since I sold my crypto at a 95% loss i believe I can claim some of the loss as a deduction. 

if your brokerage account isn't a protected asset or covered by a wildcard you may be required to liquidate it and you should do so before filing your petition. We're just credit enthusiasts chatting on a credit building forum. The real conversation needs to had with your lawyer! 

[Anonymous]

As other posters have said, all of your questions should be directed to a professional such as an attorney.

This is not the time for wannabees!