Long time lurker...brief backstory...wife stopped working due to medical condition 11/2019. Attorney suggested we wait at least 6 months before filing to drop her income off. At the 6 month mark, he informed us that there were some decent changes coming to the exemption amount for homes in Virginia in 2020 and a couple of anticipated adjustments to median income levels and to give it more time. We made it a year without paying any unsecured creditors before receiving our first warrant in debt notice from Amex for my wife's account with a hearing date of 1/19/2021.
Thanks to the increase of the homestead exemption for primary residences in VA in July 2020 and the increase of the median income level on Nov 1, 2021, we are now under the median income limit by $2000 and our exemptions will prevent us from having any equity in secured property so the attorney says we would qualify for Chapter 7.
Here's the rub - I received a death benefit from my deceased mother in November 2020 for a defunct employer's ESOP plan. Because it was a defunct plan from 2013, the administrator did not give us the option to rollover. We were required to take the distribution. That amount included with my income puts us over the threshold for Chapter 7. The attorney says our district will "most likely" not include that amount in our median income calculation but there have been some instances with at least 2 of the trustees in our district where they fought hard to have death benefits/401k withdrawals included. Our other option is to wait for 6 months to pass and allow it to fall off the radar or commit to a chapter 13 now.
So...I'm looking for opinions (not legal, more of a "what would you do in this case" thing) - do we allow the default judgment be entered, hope we don't get sued by any of my creditors before May 2021, and allow the death benefit to roll off our 6 month income to qualify for a chapter 7? My wife has no income/employer to be garnished. We have a non-joint bank account where my paycheck is deposited so my salary is protected. Virginia doesn't allow liens on personal property. Really the only thing that could happen is an attachment to our home as a lien. The attorney said this could be vacated/voided with the bankruptcy filing if it happens.
He's inclined to wait it out as I am because the thought of this being over in a few months compared to a few years is tempting. He has been an excellent attorney so far. We've paid him upfront. He's responsive to emails and phone calls and he's been a BK attorney in our area for many years. His advice has been spot on and I really feel I can trust him. I just need to get some opinions from others who might have experience or input. I obviously can't discuss this with anyone in my day-to-day life except my wife.
Thoughts? And thanks for reading this far.
Drew
Thanks to the increase of the homestead exemption for primary residences in VA in July 2020 and the increase of the median income level on Nov 1, 2021, we are now under the median income limit by $2000 and our exemptions will prevent us from having any equity in secured property so the attorney says we would qualify for Chapter 7.
Here's the rub - I received a death benefit from my deceased mother in November 2020 for a defunct employer's ESOP plan. Because it was a defunct plan from 2013, the administrator did not give us the option to rollover. We were required to take the distribution. That amount included with my income puts us over the threshold for Chapter 7. The attorney says our district will "most likely" not include that amount in our median income calculation but there have been some instances with at least 2 of the trustees in our district where they fought hard to have death benefits/401k withdrawals included. Our other option is to wait for 6 months to pass and allow it to fall off the radar or commit to a chapter 13 now.
So...I'm looking for opinions (not legal, more of a "what would you do in this case" thing) - do we allow the default judgment be entered, hope we don't get sued by any of my creditors before May 2021, and allow the death benefit to roll off our 6 month income to qualify for a chapter 7? My wife has no income/employer to be garnished. We have a non-joint bank account where my paycheck is deposited so my salary is protected. Virginia doesn't allow liens on personal property. Really the only thing that could happen is an attachment to our home as a lien. The attorney said this could be vacated/voided with the bankruptcy filing if it happens.
He's inclined to wait it out as I am because the thought of this being over in a few months compared to a few years is tempting. He has been an excellent attorney so far. We've paid him upfront. He's responsive to emails and phone calls and he's been a BK attorney in our area for many years. His advice has been spot on and I really feel I can trust him. I just need to get some opinions from others who might have experience or input. I obviously can't discuss this with anyone in my day-to-day life except my wife.
Thoughts? And thanks for reading this far.
Drew
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