Billings, NY Bankruptcy Law Firms & Lawyers

Your chapter 13 plan should state if you are allowed to use any new credit, and if so, how much you are allowed to use. If the plan doesn't address this, your next option would be to read the local bankruptcy court rules, and then, if no other information is available, to ask the Trustee for permission. Understand that answering your questions is not the responsibility of the Trustee but of your attorney, and that the Trustee may not respond to your request for an opinion. This issue varies widely between the judicial districts.

My first question would be whether the house has $91,000 in equity or that is simply the value and you have a mortgage on it? That would make a huge difference in your case. In bankruptcy you have to "exempt" or "protect" your assets. The job of a Bankruptcy Trustee is to try to liquidate unprotected assets to pay off your creditors. Plus they take commission on what they collect. In bankruptcy you can either use 704 exemptions which allows you to protect the equity in your residence and limits what other things can be protected (in your case the stocks/investment accounts will most likely not be protected)... OR you can use 703 exemptions which provides you with a $23,000 Wildcard you can use to protect your stocks/investment accounts/etc. but you cannot protect $91,000 in equity. So it's a give and take. I would highly recommend sitting down with an attorney to go over the facts of your case to let you know if you should file or not. If equity in your home is not a problem I would definitely recommend you filing bankruptcy to stop the lawsuit and get rid of the $35,000 unsecured debt.