I do have an attorney and got his advice but I would like a second opinion.

This is a little complicated hopefully I can explain.

I am self employed as a computer programmer. Been barely able to survive
month to month for the last couple of years while paying basic life
expenses (rent, utilities, food) and playing off an IRS debt (installment
agreement).

Simply became unable to pay off credit card debt from a couple years ago
(using them to support myself during the leanest years).

Filed for bankruptcy on Sept. 12th and just had my hearing.

On the day I filed I had negative -$1000 in my bank account.

Here is what happened. Someone I did some work for owed me a decent sum of
money for quite a while. $4000 to be exact.

They sent me a check the week prior to my filing. At that point in time it
became kind of a timing problem. I absolutely had to deposit that check in
order to pay my rent, buy food give the IRS their monthly due and dso on.
My monthly expenses all told are about $2000

Now I know when you file you're supposed to have very little cash on hand
in your account. So I couldn't file with $4000 in my account. I was
planning on paying it out until there was little left and then filing just
in time to be ahead of the Oct 17th deadline before the law changes.

But lo and behold the check for $4000 bounces. This was after the bank
supposedly cleared it and I began writing my own checks for rent, bills and
so on. When all was said and done, by the time I filed on the 12th I was
$1000 in the hole.

My rent check bounced, I had no moeny for food, nothing. I was very sure
the person who bounced the check was not going to make good any time soon,
if ever.

I figured I may as well go ahead and file the paperwork on the 12th while
my bank balances showed the worst possible scenario.

About a week later I managed to threaten the person owing me the money into
express sending me half of it. I deposited that, took care of my rent and
other needed debts and so on. About a week after that, they made good on
the other $2000.

Of course all that money is long gone as it was a month ago and I've had to
pay the next months rent, food, bills and so on. Today, on the date of my
hearing I have about $400 in my account.

During the hearing the trutee asked me if I had any "accounts receivable"
at the time of filing. Wanting to be truthful I told him the above story.

He then asked if the person who owed me evetually made good and paid me. I
said yes, but it was AFTER the date of filing and all the money had to be
paid to cover my monthly expenses.

He then declared that $4000 should have been given to my creditors and I
would now have to surrender it!! WHAT??! I asked him "I was supposed to
surrender money that I absolutely needed to keep from having to go hungry
or get evicted and move onto the street, especiually when I have no idea
when I'll get paid again?" He told me "yes you do".

I then asked how I can now surrender $4000 that was paid to me a month ago
95% of which had to be immediately paid to my landlord, the IRS, to buy
food, utilities, not to mention my need to save enough of it to deal with
the next months expenses since I don't have any new income coming in. He
just looked at me and shrugged.

He also asked to submit my bank statements from the last 3 months and
including to the end of this month. They will clearly show the bounced
check, my subsequent negative balances, the eventual payment to me of the
$4000 and my spending it on monthly expenses as needed. My bank statements
will definitely not show me having any kind of "extra" money at the end of
each month.

As I said, every month I have to plan very carefully for the bills coming
the next month. I'm always on the verge of completely running out of
money.

My attorney advised me not to worry and then rattled on about how they'd
handle it, but I had a hard time listening after this.

Is this normal? The trustee expects you to give everything you have even
if it means you have to move into the gutter because you have no idea when
or if you'll get any more money?

Can anyone tell me what they think will happen? I'm very upset.

"Karl J" <none@home.com> wrote in message
news:96EC8059Ekarlcsueduco@216.196.97.136...I do have an attorney and got his advice but I would like a second opinion.
<snip>

It's common for chapter 7 trustees to collect unexempt assets and distribute
the proceeds to creditors. That is the main reason chapter 7 trustees
exist. Whether the trustee has a valid claim to the $4,000 depends on the
laws of the state in which you reside and the other properties you owned on
the date of filing. There's not enough information in your post to provide
a meaningful reply. I suspect your attorney indicated s/he be preparing an
amendment to your schedules B and C to list the asset and claim any relevant
exemption. If your attorney didn't think you'd have to pay you're probably
worried about nothing.

JoblessDave@notlisted.us (JoblessDave) wrote in
<A0V2f.15179$fE5.11123@fed1read06>:
"Karl J" <none@home.com> wrote in messagenews:96EC8059Ekarlcsueduco@216.196.97.136.. .I do have an attorney and got his advice but I would like a secondopinion.<snip>It's common for chapter 7 trustees to collect unexempt assets anddistribute the proceeds to creditors. That is the main reason chapter 7trustees exist. Whether the trustee has a valid claim to the $4,000depends on the laws of the state in which you reside and the otherproperties you owned on the date of filing. There's not enoughinformation in your post to provide a meaningful reply. I suspect yourattorney indicated s/he be preparing an amendment to your schedules Band C to list the asset and claim any relevant exemption. If yourattorney didn't think you'd have to pay you're probably worried aboutnothing.

I guess I'll add that I own literally almost nothing. No propery, no
luxury items, no jewelry or anything else that could be sold for any kind
of money to pay debt. My car is an 11 year old piece of crap worth maybe
$1000. I rent my apartment. I have the "usual" things everyone owns.
Basic furnishings, clothing, assorted bric a brac. I live in Utah.

I calmed down and called my attorney and spoke to the head partner about
this. What he said was that yes the trustee can claim the $4000 even
though it would have meant my having to go live in the street if I'd paid
it.

He then said his plan is to file a motion to have the $4000 listed as a (I
believe) a federal exemption as "wages earned but not collected at time of
filing". In which case if accepted I would only be liable for 25% of it
which I would pay and the rest of my debts discharged.

A worse case scenario he explained would be that depending on thr trustee,
that exemption claim would be rejected and I would be liable for the whole
thing, but could pay it off over the course of a few months with the
remainder of my debt (about $9000) discharged. That kind of sucks.

Past that I guess if there were no discharge I could file again but it
would now be under the new laws which apparently means a major headache for
me.

GRRRRR. I should have freaking lied about the money like everyone else
does.

"Karl J" <none@home.com> wrote in message
news:96EC9E234karlcsueduco@216.196.97.136... JoblessDave@notlisted.us (JoblessDave) wrote in <A0V2f.15179$fE5.11123@fed1read06>:"Karl J" <none@home.com> wrote in messagenews:96EC8059Ekarlcsueduco@216.196.97.136.. .I do have an attorney and got his advice but I would like a secondopinion.<snip>It's common for chapter 7 trustees to collect unexempt assets anddistribute the proceeds to creditors. That is the main reason chapter 7trustees exist. Whether the trustee has a valid claim to the $4,000depends on the laws of the state in which you reside and the otherproperties you owned on the date of filing. There's not enoughinformation in your post to provide a meaningful reply. I suspect yourattorney indicated s/he be preparing an amendment to your schedules Band C to list the asset and claim any relevant exemption. If yourattorney didn't think you'd have to pay you're probably worried aboutnothing. I guess I'll add that I own literally almost nothing. No propery, no luxury items, no jewelry or anything else that could be sold for any kind of money to pay debt. My car is an 11 year old piece of crap worth maybe $1000. I rent my apartment. I have the "usual" things everyone owns. Basic furnishings, clothing, assorted bric a brac. I live in Utah. I calmed down and called my attorney and spoke to the head partner about this. What he said was that yes the trustee can claim the $4000 even though it would have meant my having to go live in the street if I'd paid it. He then said his plan is to file a motion to have the $4000 listed as a (I believe) a federal exemption as "wages earned but not collected at time of filing". In which case if accepted I would only be liable for 25% of it which I would pay and the rest of my debts discharged. A worse case scenario he explained would be that depending on thr trustee, that exemption claim would be rejected and I would be liable for the whole thing, but could pay it off over the course of a few months with the remainder of my debt (about $9000) discharged. That kind of sucks. Past that I guess if there were no discharge I could file again but it would now be under the new laws which apparently means a major headache for me. GRRRRR. I should have freaking lied about the money like everyone else does.

FWIW, I think you did the right thing disclosing this issue. It *may* cost
you a thousand dollars, but at least you'll get a proper discharge of the
remainder. Good karma + a discharge = good chance at a fresh start.

In my practice I'd claim the total $4,000 as exempt under that 75% of wage
exemption and expect the trustee to abandon the other 25%. It's just not
practical in the cost/benefit sense to prosecute an objection to an
exemption to collect a $1,000 asset.

Sigh... That's cold comfort but thanks. Any other advice / thoughts are
appreciated as I contemplate this new reality...
FWIW, I think you did the right thing disclosing this issue. It *may*cost you a thousand dollars, but at least you'll get a proper dischargeof the remainder. Good karma + a discharge = good chance at a freshstart.In my practice I'd claim the total $4,000 as exempt under that 75% ofwage exemption and expect the trustee to abandon the other 25%. It'sjust not practical in the cost/benefit sense to prosecute an objectionto an exemption to collect a $1,000 asset.

Yes, it's normal. Yes, the trustee acted properly. ARs are property of the
Trustee.

Brett Weiss
lawyer@brettweiss.com
www.brettweiss.com

Maryland, DC and Federal bars
Member, National Association of Consumer Bankruptcy Attorneys

--> Read our Bankruptcy FAQ at www.brettweiss.com/faq/br_faq.htm

Justice consists not in being neutral between right and wrong, but in
finding out the right and upholding it, wherever found, against the
wrong. —Theodore Roosevelt

************************************************** ***************
The Small Print: This response is for discussion purposes only.
It isn't meant to be legal advice and you shouldn't treat it as
such. If you want legal advice, speak with a local lawyer
familiar with your state's laws who can review *all* of the
facts and the law applicable to your situation.
************************************************** ***************


"Karl J" <none@home.com> wrote in message
news:96EC8059Ekarlcsueduco@216.196.97.136...I do have an attorney and got his advice but I would like a second opinion. This is a little complicated hopefully I can explain. I am self employed as a computer programmer. Been barely able to survive month to month for the last couple of years while paying basic life expenses (rent, utilities, food) and playing off an IRS debt (installment agreement). Simply became unable to pay off credit card debt from a couple years ago (using them to support myself during the leanest years). Filed for bankruptcy on Sept. 12th and just had my hearing. On the day I filed I had negative -$1000 in my bank account. Here is what happened. Someone I did some work for owed me a decent sum of money for quite a while. $4000 to be exact. They sent me a check the week prior to my filing. At that point in time it became kind of a timing problem. I absolutely had to deposit that check in order to pay my rent, buy food give the IRS their monthly due and dso on. My monthly expenses all told are about $2000 Now I know when you file you're supposed to have very little cash on hand in your account. So I couldn't file with $4000 in my account. I was planning on paying it out until there was little left and then filing just in time to be ahead of the Oct 17th deadline before the law changes. But lo and behold the check for $4000 bounces. This was after the bank supposedly cleared it and I began writing my own checks for rent, bills and so on. When all was said and done, by the time I filed on the 12th I was $1000 in the hole. My rent check bounced, I had no moeny for food, nothing. I was very sure the person who bounced the check was not going to make good any time soon, if ever. I figured I may as well go ahead and file the paperwork on the 12th while my bank balances showed the worst possible scenario. About a week later I managed to threaten the person owing me the money into express sending me half of it. I deposited that, took care of my rent and other needed debts and so on. About a week after that, they made good on the other $2000. Of course all that money is long gone as it was a month ago and I've had to pay the next months rent, food, bills and so on. Today, on the date of my hearing I have about $400 in my account. During the hearing the trutee asked me if I had any "accounts receivable" at the time of filing. Wanting to be truthful I told him the above story. He then asked if the person who owed me evetually made good and paid me. I said yes, but it was AFTER the date of filing and all the money had to be paid to cover my monthly expenses. He then declared that $4000 should have been given to my creditors and I would now have to surrender it!! WHAT??! I asked him "I was supposed to surrender money that I absolutely needed to keep from having to go hungry or get evicted and move onto the street, especiually when I have no idea when I'll get paid again?" He told me "yes you do". I then asked how I can now surrender $4000 that was paid to me a month ago 95% of which had to be immediately paid to my landlord, the IRS, to buy food, utilities, not to mention my need to save enough of it to deal with the next months expenses since I don't have any new income coming in. He just looked at me and shrugged. He also asked to submit my bank statements from the last 3 months and including to the end of this month. They will clearly show the bounced check, my subsequent negative balances, the eventual payment to me of the $4000 and my spending it on monthly expenses as needed. My bank statements will definitely not show me having any kind of "extra" money at the end of each month. As I said, every month I have to plan very carefully for the bills coming the next month. I'm always on the verge of completely running out of money. My attorney advised me not to worry and then rattled on about how they'd handle it, but I had a hard time listening after this. Is this normal? The trustee expects you to give everything you have even if it means you have to move into the gutter because you have no idea when or if you'll get any more money? Can anyone tell me what they think will happen? I'm very upset.

So what do you think is going to happen when I (or my attorney) explains
that I did not pay any of my creditors this money (which I did not even
collect until AFTER I filed) because to do so would have meant homelessness
and going hungry? And further still I cannot possibly come up with that
money now because any little bit I've gotten since then has continued to be
used to keep me from living on the street? And any more coming in the long
term is going to be needed for the same thing?

I have a hard time believing people without homes or food are capable of
paying off creditors...
Yes, it's normal. Yes, the trustee acted properly. ARs are property of theTrustee.

Brett Weisslaw...@brettweiss.comwww.brettweiss.com

I think that unless you can exempt some or all of the $4,000, the Trustee
won't care. Under the law, it's his money, not yours.

That being said, the Trustees generally are not unsympathetic to your
situation, and will normally allow you to work out a payment plan for any
non-exempt funds. But that's about all he can do.

Brett Weiss
lawyer@brettweiss.com
www.brettweiss.com

Maryland, DC and Federal bars
Member, National Association of Consumer Bankruptcy Attorneys

--> Read our Bankruptcy FAQ at www.brettweiss.com/faq/br_faq.htm

Justice consists not in being neutral between right and wrong, but in
finding out the right and upholding it, wherever found, against the
wrong. —Theodore Roosevelt

************************************************** ***************
The Small Print: This response is for discussion purposes only.
It isn't meant to be legal advice and you shouldn't treat it as
such. If you want legal advice, speak with a local lawyer
familiar with your state's laws who can review *all* of the
facts and the law applicable to your situation.
************************************************** ***************


"Karl" <none@home.com> wrote in message
news:96ECB2992karlcsueduco@216.196.97.136... So what do you think is going to happen when I (or my attorney) explains that I did not pay any of my creditors this money (which I did not even collect until AFTER I filed) because to do so would have meant homelessness and going hungry? And further still I cannot possibly come up with that money now because any little bit I've gotten since then has continued to be used to keep me from living on the street? And any more coming in the long term is going to be needed for the same thing? I have a hard time believing people without homes or food are capable of paying off creditors...Yes, it's normal. Yes, the trustee acted properly. ARs are property of theTrustee.Brett Weisslaw...@brettweiss.comwww.brettweiss.com

lawyer@brettweiss.com (Brett Weiss) wrote in
<_5Odna_E0uDIytHeRVn-sQ@giganews.com>:
I think that unless you can exempt some or all of the $4,000, theTrustee won't care. Under the law, it's his money, not yours.That being said, the Trustees generally are not unsympathetic to yoursituation, and will normally allow you to work out a payment plan forany non-exempt funds. But that's about all he can do.

Well that's my question... In order to ever pay that $4000 I'd need some
kind of installment plan that lasted YEARS. Are they going to do that?
What will they do when I tell them there's no way in the forseeable future
I can ever pay it?

Seriously, to give them anything more than pocket change each month would
cause me to rapidly go into negative cash flow and quickly become unable to
afford rent and or food and or power / hot water. Then I become homeless
and of course unable to ever give them anything again.

To look at my bank statements this would quickly be confirmed. Every month
ends with me having close to nothing in there. Then I scramble to do as
much work as I can, and get paid. That money gets to me just in time to
pay rent, utilities, buy food for me and my dog and give something to the
IRS. There is NOTHING left over.

I'm a stone. What will they do when they discover they can't get blood
from me is what I am asking here.

Thanks again.

At least in Illinois, 85% of your wages/income are exempt. I wonder
what the law is in your state??

David Leibowitz
Waukegan, IL
www.lakelaw.com





Karl J wrote: I do have an attorney and got his advice but I would like a second opinion. This is a little complicated hopefully I can explain. I am self employed as a computer programmer. Been barely able to survive month to month for the last couple of years while paying basic life expenses (rent, utilities, food) and playing off an IRS debt (installment agreement). Simply became unable to pay off credit card debt from a couple years ago (using them to support myself during the leanest years). Filed for bankruptcy on Sept. 12th and just had my hearing. On the day I filed I had negative -$1000 in my bank account. Here is what happened. Someone I did some work for owed me a decent sum of money for quite a while. $4000 to be exact. They sent me a check the week prior to my filing. At that point in time it became kind of a timing problem. I absolutely had to deposit that check in order to pay my rent, buy food give the IRS their monthly due and dso on. My monthly expenses all told are about $2000 Now I know when you file you're supposed to have very little cash on hand in your account. So I couldn't file with $4000 in my account. I was planning on paying it out until there was little left and then filing just in time to be ahead of the Oct 17th deadline before the law changes. But lo and behold the check for $4000 bounces. This was after the bank supposedly cleared it and I began writing my own checks for rent, bills and so on. When all was said and done, by the time I filed on the 12th I was $1000 in the hole. My rent check bounced, I had no moeny for food, nothing. I was very sure the person who bounced the check was not going to make good any time soon, if ever. I figured I may as well go ahead and file the paperwork on the 12th while my bank balances showed the worst possible scenario. About a week later I managed to threaten the person owing me the money into express sending me half of it. I deposited that, took care of my rent and other needed debts and so on. About a week after that, they made good on the other $2000. Of course all that money is long gone as it was a month ago and I've had to pay the next months rent, food, bills and so on. Today, on the date of my hearing I have about $400 in my account. During the hearing the trutee asked me if I had any "accounts receivable" at the time of filing. Wanting to be truthful I told him the above story. He then asked if the person who owed me evetually made good and paid me. I said yes, but it was AFTER the date of filing and all the money had to be paid to cover my monthly expenses. He then declared that $4000 should have been given to my creditors and I would now have to surrender it!! WHAT??! I asked him "I was supposed to surrender money that I absolutely needed to keep from having to go hungry or get evicted and move onto the street, especiually when I have no idea when I'll get paid again?" He told me "yes you do". I then asked how I can now surrender $4000 that was paid to me a month ago 95% of which had to be immediately paid to my landlord, the IRS, to buy food, utilities, not to mention my need to save enough of it to deal with the next months expenses since I don't have any new income coming in. He just looked at me and shrugged. He also asked to submit my bank statements from the last 3 months and including to the end of this month. They will clearly show the bounced check, my subsequent negative balances, the eventual payment to me of the $4000 and my spending it on monthly expenses as needed. My bank statements will definitely not show me having any kind of "extra" money at the end of each month. As I said, every month I have to plan very carefully for the bills coming the next month. I'm always on the verge of completely running out of money. My attorney advised me not to worry and then rattled on about how they'd handle it, but I had a hard time listening after this. Is this normal? The trustee expects you to give everything you have even if it means you have to move into the gutter because you have no idea when or if you'll get any more money? Can anyone tell me what they think will happen? I'm very upset.

dpl@lakelaw.com (David Leibowitz) wrote in
<5MGdndLW-PubP9HenZ2dnUVZ_tOdnZ2d@comcast.com>:
At least in Illinois, 85% of your wages/income are exempt. I wonderwhat the law is in your state??David LeibowitzWaukegan, ILwww.lakelaw.com

I just looked it up and it says:

Minimum 75% of earned but unpaid wages; bankruptcy judge may authorize more
for low-income debtors

Which, if I remember correctly is what my attorney said. But he also said
something like they have tried to argue this before and a couple of
trustees would not accept it. So I'm guessing this isn't some hard and
fast rule? At this point I'd be ecstatic to be done with this for $1000 or
even less.