Yeah...I'm That Stupid!

[BKINAZ]

$70k- Unsecured Debt
$88k- Secured Debt (ELOC/2nd)
1st- $366k
House Value- $330k

So we had a brokerage account that lost a lot $$$ (market) that we closed out at the end of December. There was $70k left...it (in original form) was earmarked for retirement.

Took the money, $20k to remodel detached garage into home office (yes included in the current $330k value), $15k for home improvements...$10k for business expenses and long story short...blew the rest in Vegas trying to go for a home run to "raise" money...didn't work. So...it's all gone.

I am now strongly considering BK 13...probably around April or closer to May. Do I have any issues besides being stupid? If I file 13...I believe they will request tax records for three years back, the account will come up...so obviously I won't hide it. But am I just going to get attitude for blowing the money or do I have a serious problem?

[chloe0724]

They don't care if you blew the money in Vegas in a 13. As long as you fall within the paramaters for the allowable debt, do not have any fraudulent charges on your credit cards in the months prior to filing, and are commiting all your disbosible income to the plan, you should be fine.

BK is for people to correct the mistakes they made and start fresh.

[becky20]

I'm no expert, just writing down my thoughts but I'm wondering if the 70K would be considered income (since it just happened in December) and included when figuring out what their payment would be... If so, they might have to wait til June or so (they look for the past 6 months of income when calculating payments) but by that point they will have filed their taxes and that 70K would be shown in their tax papers. I don't know the answers but just wanted to include other possible issues so you get all the information.

Good luck!

[BKINAZ]

chloe thanks...

No, it's not income. It was money from our house that was sold. Throw in the $60k lost in the market...they owe me.

[Flamingo]

chloe thanks...

No, it's not income. It was money from our house that was sold. Throw in the $60k lost in the market...they owe me.

The $70,000 you mention in your original posting you state came from what was left of your brokerage funds but not in a retirement account and it appears it was the remaining profit from a house that you sold (and original funds put in a brokerage account) which doesn't matter now as it was/is still an asset to you of funds received. You mention you took that $70,000 out in December and then discuss how you spent the funds. You will have to file as to gains or losses as to that brokerage account with your tax returns and it will show the remaining $70,000 as a balance. You will have to provide that information at the time of filing since you took it out of your brokerage account because they may ask for transactions over a certain amount going back one year and at $70,000 that is not a small amount. Make sure you have receipts for how that money was spent and copies of the gains and losses from that brokerage account.

[BKINAZ]

Yeah I think you are on the same page as me...but I thought that money (since it was tax free from the home sale) couldn't be taxed? Especially since like I said the account lost like $60k.

But I do understand that I may or I will have to account for it, for one reason (besided legalities) is that the brokerage account appears in my taxes..problem is...Vegas doesn't give receipts, even when you lose that much. That's the big question. Will I get burned for gambling it away?