Is chapter 7 an option if I am about to lose my job which is my biggest asset? 17 Answers as of October 10, 2014

I had a lawsuit filed against me and my business for trade secrets violation in 2012 by my former employment. I have paid approximately 35,000 in atty fees and have another 100,000 billed, with the expectation of another 150,000 when trial takes place in Feb 2015. I am being sued for in excess of 350,000 plus atty fees. I am at a point of despair and am about to lose my job, so I will have no resources. I am considering Chapter 7, my only assets are my home, retirement, auto and a small amount of cash. My biggest asset is my current salary which I am about to lose. Is Chapter 7 an option?

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C Page Hamrick Attorney at Law | C Page Hamrick
You definitely need to speak with an attorney about bankruptcy. Haven't your lawyers suggested it, after spending (charging you) all of that money?
Answer Applies to: West Virginia
Replied: 10/10/2014
Stephens Gourley & Bywater | David A. Stephens
Yes, unless your income is too high to qualify.
Answer Applies to: Nevada
Replied: 10/9/2014
GARCIA & GONZALES, P.C. | Richard N. Gonzales
Yes, by all means. Your case is a bit complicated. Call an experienced bankruptcy attorney for a face-to-face meeting. Be ready to pay for the consultation. You want one hour of an attorney's undivided attention. Free consults usually last 15 mins, and usually are with a staff member not an attorney. Discover all of your options. Good luck!
Answer Applies to: Colorado
Replied: 10/9/2014
Danville Law Group | Scott Jordan
Yes, a Chapter 7 bankruptcy is very much an option. You should consult in person with a local bankruptcy attorney for more details and review of your case. Many attorneys offer a free consultation.
Answer Applies to: California
Replied: 10/9/2014
The Law Office of Darren Aronow, PC
The Law Office of Darren Aronow, PC | Darren Aronow
If you have less equity in your home then your homestead exemption, then chapter 7 may be for you. However, the requirements for income is a 6 month average so if your income is too high but you are losing your job, then you may have to wait until your average income is low enough. You should see a local attorney to discuss the details of your case.
Answer Applies to: New York
Replied: 10/9/2014
    A Fresh Start
    A Fresh Start | Dorothy G Bunce
    The problem you may be facing may (or may not) be eligible to be discharged through a Chapter 7 bankruptcy. Under 11 USC sec 523, a debt related to the commission of a crime could be ineligible to be discharged through bankruptcy. Depending on the exact facts, a Chapter 13 might be a better option as you can receive a broader discharge encompassing more debts. But in order to qualify for Chapter 13, you will need to have regular income. The measurement of how much you have to pay in a Chapter 13 will be determined by how much you have earned during the past 6 months. So right now, you may be in between a rock & a hard place. I would urge you to meet with the most scholarly Chapter 13 attorney you can find in your community for strategies, because a lot is at stake.
    Answer Applies to: Nevada
    Replied: 10/9/2014
    Janet A. Lawson Bankruptcy Attorney
    Janet A. Lawson Bankruptcy Attorney | Janet Lawson
    This sounds more like a ch13. You need an experienced knowledgeable attorney, there are several issues here that need defending (such over the debt limit arguments). Don't despair. Find a lawyer who isn't a roll over. Ask if the lawyer has ever been involved in any litigation (other than lien strips).
    Answer Applies to: California
    Replied: 10/9/2014
    Freeman Law Group, LLC
    Freeman Law Group, LLC | Derek Freeman
    To file a chapter 7 you will need to meet the income requirements under the means test. Depending on your current salary, your income might be too high to qualify. But you might qualify after losing your job. The way income is determined is by taking the average of your last 6 months income. So after 1, 2, or more months being unemployed, your average 6 month income might be low enough to qualify. You will also need to determine if your other assets are exempt, and if they're not whether you are willing to lose them in a chapter 7. A chapter 7 discharge should cover the damage awards in your lawsuit.
    Answer Applies to: Colorado
    Replied: 10/9/2014
    Steele, George, Schofield & Ramos, LLP
    Steele, George, Schofield & Ramos, LLP | Alan E. Ramos
    Whether to file Chapter 7 or to file bankruptcy at all, is the product of a review of all of your circumstances. You should sit down with a competent attorney who will take your through all of the factors impacting your life and from that analysis the appropriate decision can be reached. You presented a number of issues that need to be considered; however, there are several factors within each of the issues that need to be considered.
    Answer Applies to: California
    Replied: 10/9/2014
    Garner Law Office
    Garner Law Office | Daniel Garner
    The biggest obstacle to filing a chapter 7 in your case is probably the "means test" which is based on your past 6 months of income. If you are over the median for your family size, you would have to explain why you don't expect to be able to find another job paying a similar salary. You would also have to consider filing 2 cases one for yourself and one for your business, to escape liability for the lawsuit. Liability in a civil lawsuit is typically dischargeable in bankruptcy unless the plaintiff can argue convincingly that the trade secret violation was some type of fraud, willful and malicious injury, or breach of fiduciary duty. If that is a possibility, you are looking at a possible adversary proceeding inside your bankruptcy which would increase the cost substantially. As for assets, your homestead exemption would be based on the amount of equity in your home. If you have too much equity in your home, you may have to surrender it in a chapter 7. Suffice it to say that yours is not a simple case and you would be wise to hire the most qualified bankruptcy attorney you can afford, with experience in business bankruptcy and litigation.
    Answer Applies to: Oregon
    Replied: 10/9/2014
    Patrick W. Currin, Attorney at Law | Patrick Currin
    Chapter 7 could be an option. If you have much equity in it, you may not be able to it all in the Chapter 7 format. Still, if you income will be basically zero, you have no disposable income so you could file a Chapter 13 in that event, keep the home (you still have to make the mortgage payments) and have a similar outcome as to unsecured debt.
    Answer Applies to: California
    Replied: 10/9/2014
    Meister & McCracken Law Firm, PLLC | Joanne M. McCracken
    You need to speak with a well qualified bankruptcy attorney before you continue to fund additional litigation you may be able to discharge that liability in bankruptcy. Please make an appointment to discuss this with a good bankruptcy attorney as soon as you can.
    Answer Applies to: Arkansas
    Replied: 10/9/2014
    Novakov & Associates, PLLC
    Novakov & Associates, PLLC | LINDA S. NOVAKOV
    Chapter 7 is an option, if you can meet the means test. That is whether or not you and your dependents are within the median income for a family of your size in the area in which you live. If you are too far over the median income and unable to meet the guidelines, you might be required to file under Chapter 13. If you lose your job and income during that process, you may be able to convert to a Chapter 7 at that time.
    Answer Applies to: Kentucky
    Replied: 10/9/2014
    Barnes Law Firm, LLC | Aunna Peoples
    Bankruptcy is an option. I say bankruptcy as opposed to a Chapter 7 bankruptcy because a Chapter 13 may be more appropriate depending on the different "causes of actions" for which you are being sued. When you speak to the bankruptcy attorney, you need to determine whether any of the actions against you would be considered non-dischargeable. If so, you may want to look at a Chapter 13.
    Answer Applies to: Missouri
    Replied: 10/9/2014
    Law Office of Andrew Oostdyk
    Law Office of Andrew Oostdyk | Andrew Oostdyk
    You may be able to file a Business Chapter 7 Bankruptcy if your total liabilities comprise of greater than 50% of business debt. If you do not qualify for the Business BK, due to mortgage and other personal debts being greater than business debts, you will likely not qualify for Consumer Chapter 7 while you are still employed. If you lose employment, you will likely qualify for Consumer Chapter 7. Many BK attorneys offer a free consultation and can give you a clearer picture once they have had an opportunity to get some details from you.
    Answer Applies to: Texas
    Replied: 10/9/2014
    Ferguson & Ferguson
    Ferguson & Ferguson | Randy W. Ferguson
    Yes. I would talk to an attorney now before the case goes any further.
    Answer Applies to: Alabama
    Replied: 10/9/2014
    D.J. Rausa, Attorney at Law | D.J. Rausa
    Your salary is not an asset within the context of a bankruptcy. To be able to fully respond the value of your real assets would have to be determined, i.e. your home, cars, etc.
    Answer Applies to: California
    Replied: 10/9/2014
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