Probably Filing Chapter 13 - Utterly Stressed

[justbroke]

My house payment including escrow is $1,779/month, my 1 car is $600/month and the other is $458/month. Those are the only assets like care about. No other assets.

You don't have much in secured debt and cars, so your fixed payments are low. For example, my house payment plus the arrears was over $5,000/month.

Also, how was your trustee making $700/month in commissions only paying your secured debt? I read that in PA the trustee fee is 8.7%. Unless your secured debt monthly payment was around $8-10K with similar trustee fee.

While our trustee is is only about 8%, they still "charge" 10% per month during the life of the plan. The Trustee was making over $7,000 month in payments to my secured creditors and the IRS.

[flashoflight]

Just some random comments.

1) The gambling needs to dealt with first prior to filing. If you have the gambling itch, wait. Self-exclusion from all of the online casinos plus any brick and mortar casino within driving distance. You may need a Gambler's Anonymous program before filing. It is super easy to relapse even during chapter 13 because your mind will be thinking you can double up and still make your trustee payment. There needs to be more than three months between the last gambling and filing. You may never gamble again. I wouldn't even risk a scratcher.

2) You can't keep two cars as a sole filer. Why should your unsecured creditors pay for your second car? Needing a backup car is not a good excuse.

3) Looking at your numbers, there is just about zero chance you will be in a $0 DMI situation. Your mortgage is on the small side and you won't be able to keep two cars. The way to get 0% DMI with 170k income is a huge mortgage payment PITI, large amount of back taxes, large amount of mortgage arrearages, investment property that is cash flow positive, high medical expenses, and high charitable contributions. Every number other than food needs to be backed up with months of receipts. Plan on turning all of the receipts in with jacked up numbers. If you were north of $3k on mortgage PITI and on top of that you have arrearages, maybe we can talk about getting to zero. But your amounts are too little to be seriously talking about a 0% plan with your current situation.

4) With commission income going into what looks like a really bad recession, I'd wait until the credit cards start suing you and gives you more time to work on the gambling. Maybe you can squeeze into a 7 by this time next year. Keep up the mortgage payments and you won't lose the house. That's better than missing mortgage payments and tax payments on purpose.

5) A 0% plan leaves you no room if your commissions drop or if you need your lawyer to file a motion for anything. Your trustee payment cannot drop much in a 0% no matter what happens.

[euphoria124]

Just some random comments.

1) The gambling needs to dealt with first prior to filing. If you have the gambling itch, wait. Self-exclusion from all of the online casinos plus any brick and mortar casino within driving distance. You may need a Gambler's Anonymous program before filing. It is super easy to relapse even during chapter 13 because your mind will be thinking you can double up and still make your trustee payment. There needs to be more than three months between the last gambling and filing. You may never gamble again. I wouldn't even risk a scratcher.

2) You can't keep two cars as a sole filer. Why should your unsecured creditors pay for your second car? Needing a backup car is not a good excuse.

3) Looking at your numbers, there is just about zero chance you will be in a $0 DMI situation. Your mortgage is on the small side and you won't be able to keep two cars. The way to get 0% DMI with 170k income is a huge mortgage payment PITI, large amount of back taxes, large amount of mortgage arrearages, investment property that is cash flow positive, high medical expenses, and high charitable contributions. Every number other than food needs to be backed up with months of receipts. Plan on turning all of the receipts in with jacked up numbers. If you were north of $3k on mortgage PITI and on top of that you have arrearages, maybe we can talk about getting to zero. But your amounts are too little to be seriously talking about a 0% plan with your current situation.

4) With commission income going into what looks like a really bad recession, I'd wait until the credit cards start suing you and gives you more time to work on the gambling. Maybe you can squeeze into a 7 by this time next year. Keep up the mortgage payments and you won't lose the house. That's better than missing mortgage payments and tax payments on purpose.

5) A 0% plan leaves you no room if your commissions drop or if you need your lawyer to file a motion for anything. Your trustee payment cannot drop much in a 0% no matter what happens.

Thanks for the information.

In regards to the two vehicles, one of them is solely in my name and the other is in both mine and my wife's name (who is not filing and who left me). Under this circumstance, would they make me sell a car that is in both our names even though she isn't filing?

My base salary of the $170K income is $84,000. I am predicting ZERO commissions in this current economy and I can even wait 6 months to have the paystubs to prove it.

I am currently seeing a therapist for the gambling issue and I have self-excluded myself from the online casinos. I also have a record of attendance at GA meetings. This will all be relayed to the court if necessary (which I'm assuming it will be)

Lastly, why would I wait until the creditors start to sue me? Wouldn't that put me in a bad situation? Do all lawsuits seize if a bankruptcy is filed AFTER the lawsuits began?

[zelkin]

Hey Euphoria, sorry for the delay. just a quick point on the debt settlement side, justbroke is right that creditors can and often provide a 1099-C. You are not always liable for those debts if you show that you are insolvent (liabilities exceed assets). Here's the IRS publication: https://www.irs.gov/pub/irs-pdf/p4681.pdf. And actually the logic isn't necessarily dependent on income. I had a client at one point that they had $300,000 combined income annually and creditors did not sue. There's a bunch of factors that I hypothesize.