topic Re: What would a judge say about my expenses if i try BK? in Bankruptcy

What would a judge say about my expenses if i try BK?

Anonymous — Sun, 17 Feb 2008 21:11:06 GMT

So i have spent the last 3 days contemplating on what decision I have to make. BK is def in the air but I keep hearing that the that the judge has to agree whether or not i go ch. 7 or 13. Here is my current income and expenses.

75k a year is what i make which turns to $3900 a month take home after taxes, ins, and ira.

Mortgage : $2000

Car : $260 (lease)

Condo Association : $140

Car/Home Insurance : $200

Utilities : approx $400

Gas : approx $200

Phone/Internet/Cable : $0 (I work in this industry so its paid for by company)

Food/Entertainment: Approx $400

So this is a total of approx $3600 in monthly expenses that is not including some other misc expenses that probably add up to $100 a month.

I am currently single and I'm planning on getting married in the next 3-4 years. I just bought my new home in June of 07. I am currently taking care of my family as I have two sisters who live with me and my mother and father. I am 25 and my sisters are 22 and 17. My father cannot work and my mother has a part time job because she has to spend time taking care of my father if needed. Luckily, my family lives with me because I am able to pass on some expenses to them. Currently, my 22 yr old sister pays the assocation fee, my mother pays me $600 towards the mortgage and all utilities. The problem here is that my family is planning on moving away in about a year so I cant count on them for long. I dont see the need to try to sell the house especially in this terrible housing market that is currently going on. I have a brand new condo and the builder is still building 70 more condos in my sub so I dont see why someone would want to purchase my home when the builder is selling brand new condos for right around the price I purchased mine.

So anyway...I currently have close to $1000 to put towards my credit cards and I am just under 70k in credit card debt. I only have credit card debt and nothing else. I am current on all of them...I have never been late on a payment with any creditor and I have never been late on my mortgage. At this rate, I am never going to be able to pay off the creditors, it will probably take me well over 10 years with interest and thats not including what could happen after my family leaves. I know i can probably find a roommate but i wont count on that for now.

I also want to know what happens if I file BK now and get married after a few years. What happens to my spouses income? Will that be reported as disposable income? If so, I wont even bother getting married until I get through this...that would be the last thing I would ever want to do to my wife.

Do i seem like a BK candidate? If you genuinely feel with my current situation that there is please let me know. I am thinking about a DMP too but that all depends on what the monthly payment to them would be.

So I hope this clarifies as much as i can in my current situation. If there is anything else you would like to know please dont hesitate to ask. Thank you for all of those who has responded to my most recent posts the last few days.

Re: What would a judge say about my expenses if i try BK?

granny031350 — Sun, 17 Feb 2008 22:03:15 GMT

Because your case is complicated, I would talk to an attorney but here is my take on your situation, and I am NOT a lawyer so take it for what it is worth.

First, the attorney will look at who is living in your home and will ask about their incomes. If only your mom is working part time, her income counts. If your sister is working part time her income counts etc. So everyone living there is a part of your financial situation on the day you file. Now with a chapter 7, that snapshot is a 1 day snapshot, filing day. With a chapter 13 it is more complicated and if you are losing income when they move in a year, then I would stay away from filing a chapter 13 if at all possible. If that is the only way to go, the go with your DMP program, not the chapter 13. If you can do a chapter 7, then proceed.

Then your expenses are compared to the IRS standard guidelines and the attorney will throw all the misc stuff in there as well. I would count internet, phone etc because you are allowed it in the expense section. Your goal on the means test is to be a zero or negative so as not to throw you into a chapter 13.

Your exemptions should cover your home and your car and your furniture etc.

So to file you would need 6 months of bank statements, all cc statements, all loan papers, house appraisal (probably can use the one from a year ago) and see an attorney for that free consult.

If he says chapter 13, RUN to the DMP. If he says chapter 7, then in about 6 months you would only owe on your house and your car and be done. However it will stay on credit for 10 years but it does lessen in time. It will NOT affect your future spouse in any way unless after your discharge you make late payments and get into another mess.

Re: What would a judge say about my expenses if i try BK?

Anonymous — Sun, 17 Feb 2008 23:12:43 GMT

how does my mother and sister's income effect this decision? I dont want this effecting my sister at all. she has many credit card bills and student loans she has to worry about...

Re: What would a judge say about my expenses if i try BK?

granny031350 — Sun, 17 Feb 2008 23:29:17 GMT

ok I didn't mean to imply your sister would be affected. But she lives in your home. So she counts in your "household" as to how many people live in the house etc. Your BK won't affect her credit or her at all, only that she lives in your home and you help tosupport her etc. You need to talk to a lawyer asap so he can explain better than I can how it all works. But in essence all household members are your "household" and all their income counts. But your attorney will factor out her own bills etc so probably net gain to income there is zero. The BK will only affect you.

Re: What would a judge say about my expenses if i try BK?

Anonymous — Mon, 18 Feb 2008 02:13:24 GMT

Does having a pet legitamatly count as an expense? Anything else i should look at as being able to claim as an expense?

Re: What would a judge say about my expenses if i try BK?

Anonymous — Mon, 18 Feb 2008 02:37:23 GMT

if you are spending money on him, like food, vet bills, that is your expense, bud. money on it doesn't grow in trees or your pet's wazzooo.lol

Re: What would a judge say about my expenses if i try BK?

Anonymous — Mon, 18 Feb 2008 02:45:36 GMT

is there anything else that i should know that may get me into a ch7? I am hoping that i can get in ch 7. What other tips and tricks do you recomend i look into before talking to the lawyer

Re: What would a judge say about my expenses if i try BK?

Anonymous — Mon, 18 Feb 2008 02:56:23 GMT

your lawyer would advise you, as well as the mandatory class before filing.

but please realize that i am not recommending you file for bk, but rather, laying out your options as would a lawyer would do if u go see one.

a discharge is not a guarantee.

Message Edited by whoisjohngalt7 on 02-17-2008 06:56 PM

Re: What would a judge say about my expenses if i try BK?

Anonymous — Mon, 18 Feb 2008 16:37:25 GMT

http://ficoforums.myfico.com/fico/board/message?board.id=generalcredit&thread.id=17383

http://ficoforums.myfico.com/fico/board/message?board.id=bankruptcy&thread.id=51

http://ficoforums.myfico.com/fico/board/message?board.id=bankruptcy&thread.id=19

http://ficoforums.myfico.com/fico/board/message?board.id=bankruptcy&thread.id=20

Re: What would a judge say about my expenses if i try BK?

Anonymous — Mon, 18 Feb 2008 16:43:53 GMT

I've stumbled upon more than a few articles about how the BK Reform Act, or BARF, has continued to barf. The means test isn't weeding out all that many people because, shock of shocks, people AREN'T abusing the BK laws. If anything, they are failing to avail themselves of BK long after many a competent accountant or financial adviser would TELL them to file BK7.

A number of BK lawyers have written articles stating, in clear terms, they are getting their clients approved for BK7 at rates in the high 90th percentile. If you qualified for a BK7 before the law changed, odds are extremely good you still qualify for a BK7.

The biggest change in the BK from BARF was in people's perception. The consumer's "friends in the media" haven't been too helpful in getting that truth out. While the BK laws might have changed, the reality of BK has changed little. You can still do it, if you need to do it.

One thing I cannot stress enough--don't go it alone. Get a good lawyer.

Re: What would a judge say about my expenses if i try BK?

Anonymous — Mon, 18 Feb 2008 18:39:48 GMT

I'm meeting with a lawyer in couple hours. He has worked with a family member of mine through a ch. 7 and she said he is great. A bit expensive, but will get the job done with no worries! I will follow up after the meeting to let you know how it goes. I'm crossing my fingers for ch. 7! Wish me luck...

Re: What would a judge say about my expenses if i try BK?

Anonymous — Mon, 18 Feb 2008 22:42:10 GMT

LTrain823 wrote:
I'm meeting with a lawyer in couple hours.

If you get the chance, at least read this before you go.

http://kennethbrock.blogspot.com/2006/07/what-do-i-need-to-bring-to-my-attorney.html

Re: What would a judge say about my expenses if i try BK?

Anonymous — Mon, 18 Feb 2008 23:00:20 GMT

So the meeting didnt go nearly as good as I expected.

A question I have about tax returns. I am expecting probably arount $7k in tax returns this year. The lawyer said that i should wait 90 days til after I cash that tax return check before I file BK and it should be fine. And then he told me that I have tell the trustee what I expect to use that tax refund with. What if I cashed it and put it in an IRA fund. Should I just kiss the tax return goodbye and file now?

He also said that I need to wait awhile because I have used my credit cards a lot in the past 6 months (almost $20,000). What should i do? Should i keep paying the creditors? He said that i have to pay them because it would be credit fraud if i used that much credit so soon to filing BK. The meeting didnt sound as good as I wanted. I dont think I will get ch. 7 which is what I hope to get. But now I'm looking at another 3-4 months of paying minimums. Any thoughts?

Re: What would a judge say about my expenses if i try BK?

granny031350 — Tue, 19 Feb 2008 00:50:49 GMT

it is true that using your credit cards right before filing will raise a lot of red flags. And your lawyer knows your trustee well. IRA's are exempt. If you let the trustee take your refund then your case would be open a long time. With a chaper 13 you could file right away because you will be making a payment to the trustee. Wonder if your attorney thinks you could start with a chapter 13 and convert later? something to ponder. But you do need to stop using your credit cards completely, no matter which direction you go.

Re: What would a judge say about my expenses if i try BK?

Anonymous — Tue, 19 Feb 2008 03:33:23 GMT

i am planning on stopping completely using my credit cards. So are you saying that if I file a ch. 13 that i will be able to keep my tax refund? What does my ira have to do with anything? What does you mean "if" i let the trustee take the refund? Why would i want to give it? Sorry to sound so direct, i just became really confused all day.

Re: What would a judge say about my expenses if i try BK?

Anonymous — Tue, 19 Feb 2008 03:34:42 GMT

Also, what is the worst that could happen if i have used my credit cards before i file bk? just curious...

Re: What would a judge say about my expenses if i try BK?

Anonymous — Tue, 19 Feb 2008 05:27:39 GMT

Another big concern is about my family's income. Can anyone please tell me what steps the court takes to verify my families income? How will they know about my sisters? What if i never told them they even lived with me. I am not trying to break the law or anything but i am just trying to prepare myself for how and what they will be asking from me.

The other very complicated thing is about my parents. My parents are paying me $1000 for mortgage and for all utilities which equal about $1500 a month. The problem here is that my mother and father own a business that is losing money. They are not showing any income right now yet they still manage to give me the 1500 a month. Although the business is losing money they manage to pay some bills from what the business does do. The atty asked me to verify my mother and fathers income and I didnt know how to anser it. I have to claim this because after sittting with him and breaking down all the household expenses it came out to be a little over $5000 a month. My take home income is $3900 so he asked where the other $1100 came from and how I am managing to pay minimum payments on my CC's. Do i say that my parents only give me 1000 so it comes close to the expenses? Does this help get the ch.7? Again, i hate to sound like im trying to beat the system but my situation is def not a slam dunk situation to work with.

Re: What would a judge say about my expenses if i try BK?

Anonymous — Tue, 19 Feb 2008 14:56:32 GMT

These all sound like very good questions for your lawyer.

AFAIK, IRAs are safe in many states and cannot be touched. And, I would try to keep minimum payments paid on time so as not to incur a bunch of lates or a CO.

Even if you couldn't qualify for a BK7, a BK13 is probably going to be a lot less painful than the promises of a DMP.

Nothing a DMP tells you carries the weight of law behind it. A gentleman's agreement made with someone who ain't a gentleman.

Re: What would a judge say about my expenses if i try BK?

granny031350 — Thu, 21 Feb 2008 00:32:36 GMT

Even though BK law is federal, every trustee and every district does their own thing. Some trustee's take the refund some do not. Your attorney would let you know which kind of trustee you have. My trustee gets my federal refund, not my state in my chapter 13.

Re: What would a judge say about my expenses if i try BK?

Anonymous — Thu, 21 Feb 2008 02:58:27 GMT

I am meeting with a ch. 13 lawyer in friday. The first lawyer i spoke with said he doesnt do chapter 13's so he referred me to someone else.

I'm really still unsure of what the goal is for me to have going into this. Is the goal to show as less disposable income as possible? I have no disposable income. Every month my expenses are more than what i make so i have to take money from my other business that i own half of with my sister. The store is losing money every month but i have no other source to take money from. I have already borrowed money from friends and family and that hope has definately gone away.

What happens if i have used a lot of credit cards in the past 90-120 days? I'll admit that I got a very irresponsible and stupid in the past few months. I took a lof of cash advances out of some of my credit cards and lost most of it at the casino. I know I know, please spare me the preach...sorry, ive heard it from a million and one people so far so i guess im just trying to get some guidance without someone telling what i shouldnt of done in the past when i already know what my mistakes are and will learn from it after this is all said and done.

If i owe many friend and family money will the trustee let me use the tax return check to pay them back? Does it make sense to wait until i get my check before i fil bk?

This has already been a nightmare going through my head and I have yet to already go through with this...

I spoke to someone yesterday who told me that his lawyer told him that they will not touch his house and then 6 months later the mortgage company forced him to forclose...that worries the hell out of me!!!