Hey all, so I'm starting to review the process for BK and was looking for advice on being on the edge of chapter 7. Any advice on how to go about this as I don't want to file 13 and was thinking debit consolidation would be better in the long run since its the same 5-year payback as 13 would be. I'm in the grey area with income in California and have just about as much debit as income due to medical and loss of job a few years back.
If you can I would avoid it at all cost see if you can maybe PFD some items or refinance some things etc before entering into a 7 year penalty I call it haha.
7-year penalty...referring to bk13?
No I believe his is referring to the 7 year reporting period. When you go with a debt consolidation company these accounts negative activity will remain for 7 years.
OIC and thanks! My fear with BK13 is the 5-year repayment plan and the credit jail I'll be placed in. I have a current home loan and will be outgrowing this house in the next few years and not sure what direction is best for the pickle I am in.
I'm in the grey area with income in California and have just about as much debit as income due to medical and loss of job a few years back.
Whats the grey area? You either pass the means test or fail it. Is all your debt or is nearly all of it medical ? Income ? how many household members?
Main thing comes down to passing the means test for your state. If you would like to file a Chapter 7 bankruptcy you must pass the California means test. The test only applies to higher income filers which means that if your income is below the California median for your household size you are exempt from the test and may file a Chapter 7.
If your income is higher than the California median you will need to complete the means test calculation to determine if you can pay back a portion of your unsecured debts through a Chapter 13 bankruptcy. May 2019 stats:
I'm at 102,xxx for the year and the cut of for a family of four is 97k. All of my debt is unsecured and i was told they can run the stress test, but i would need to pay 1000-1400 in order to find out if i can make 7 work.
TALK TO A BK7 LAWYER.
I was in the same boat as you: I signed-up for debt consolidation and all of my accounts were closed with notations of "debt management" on my credit reports. Then the company was sending my payments late and I was racking-up 30 day lates. After 2 months I gave up and sought BK consultation. Like you, I was making too much money and was trying to fill out the Means Test at home by myself. Meantime, the phone kept ringing. I grew discouraged. I went to a free consultation and it changed everything! A BK7 is all about (1) timing, (2) living expenses, and (3) Wild Card exemptions (both federal and state). But mostly it's about timing. I had to delay filing for 4 months because I had Uber income in addition to my regular income that was putting me over the income limits for my state and family size. I had already stopped driving for Uber due to needed car repairs, but I still needed to wait 4 months so that extra income could not be counted in the Means Test (backward and forward looking). I was borderline and It was complicated and sometimes frustrating, but my lawyer and I figured it out. From the time of my consultation to my actual file date was 9 months. My lawyer told me to give creditors and collection agencies his number if they called me, and I did. The calls and letters stopped almost immediately.
Sorry to ramble on, but the point is, GO SEE A LAWYER. If you're borderline a good BK7 attorney will help you figure it out.