Income to high for BK... any other options? Help!!!

[07sky04]

I talked to a lawyer about filing Ch 7.  He says we make too much money, yet we're in the hole every month!!  That's mainly to our kids being in daycare to the tune of $1400 a month (unfortunately, we don't have family that can watch them for free... and those are the cheapest centers around!!).

Anyways... we haven't been able to pay in 2 months.  The phone calls are beginning to be too much!!  Should I try and settle with the companies?  How do I go about doing this?  Mailing them letters?  Just talking to them on the phone?  We could aggressively pay down our debt when our daughter starts school in Sept 09, but until then, we're poor! 

Any help you can provide would be great!

Thanks!!

[Anonymous]

The other option is chapter 13, but if you're about to drop $700/month of your expenses in 9 months, that's not going to work.

I would look more carefully at your budget, see where every dollar of your money is going.  Do you have two large car payments?  Sell them and buy something cheaper.  Are you eating out a lot?  Do you have premium cable/phone features you can cut back on?  Do you have stuff sitting in your closets and back porch that you can sell?  Can one or both of you take on a part time job, maybe do something from home?  Is it more cost effective for one of you to take a leave of absence from work? Maybe one of your bosses is willing to let you work from home?  Maybe you have a big house and you can rent out a room for a year?

Unfortunately, there is no easy way out.  You can save up say $2000, and then if you have two creditors who want $5000 call them up both and tell them "first one to send me a written offer to settle this account for $2000" gets it.  It's hard to say anything specific without knowing more details about your situation.

[Anonymous]

You may want to contact a different lawyer.  We filed chapter 7 in December of 2006 and we actually made a little more than what the limit was for chapter 7, however, once we took the means test, it was clear, we were way in the hole.  We also had childcare and all of those expenses are figured into the monthly budget.  We were in the hole about $500 per month with all expenses.  We easily qualified, even though, the income was over.  I would look into this further because you may not have someone that is telling you everything you need to know.  I wish you luck!

[Anonymous]

Well TLM, I agree yet disagree with your post.  The means test and the budget are totally different. The means test goes by your gross income for the six months prior to filing the case. The budget, which is schedules I and J in the petition, looks at your income and expenses going forward. You can be over the limit yet qualify for a chapter 7.  The means test will allow deductions for things such as mortgage payments, child support, taxes, health insurance etc... the test automatically calculates an IRS standard for these things, but if yours is higher than the standard there are ways to still qualify.