Not Sure.....

[Mi Bankruptcy]

Ok, makes sense. I'm almost done with our 2008 return, just waiting for wifes 2nd & 3rd W2's which are just little pt jobs that wont add up to much. I believe when its all said & done about 62k combined for 2008. Btw, we have 2 kids elem school age. Can I use the refund for going out to dinner or baseball registration for my son? ($50.00), or dont sweat the small stuff?

Also, can you give me examples of how life is after you file & what role the trustee plays in your life? Are they constantly monitoring your expenses, reviewing bank statements for 5 years?

Yes, that's not a big cost.. go ahead and enroll..them.

[rrockinggramma]

you and your attorney will work out your expenses and determine your disposable income for paying the trustee. In the Eastern District I think the process is pretty fair. The trustee's are interested in you making your monthly payment to them and sending in your tax refunds and returns every year. Other than that (unless you are private business owner) they stay out of your business. In Eastern District, you are allowed to take out up to 1000.00 in debt without trustee approval. So about a year after filing, I took out a few small credit cards to rebuild my credit. The key is to NEVER BE LATE after filing, on anything. But I would really try to make your mortage current with your tax refund prior to filing. It will save a lot of headaches down the road since I see a lot of chapter 13's that discharge is delayed while the trustee and mortgage company sort out all of the payments etc. Also, all of the trustee's have websites. You haven't filed yet so you don't have an assigned trustee but you can visit the websites and search around for free. Click on the "links" at the top and go to the BK court section. There you will find a wealth of information about local rules, common practices, judges opinions and court dockets. A pdf of the debtor handbook is there also for chapter 13 filer's.

http://www.det13.com/home.shtml

[Michigan42]

Once again, thanks for all of the great info!

Let me ask this, say I want to pay my relatives back when I get my return. How long after should I wait to file? Also, should I change my exemptions at work so I can get more week to week in my paycheck? Also, one of you brought up "vehicle worthiness". I drive an old car with 190k on it. I do work in a service dept & can repair the car with little labor costs, but if the eng/trans goes then its still 2k or more to repair, & youve got me thinkin that this veh will most definitely not last 3 to 5 more years. Should i look at trading up for a newer used car before I file? Thanks so much to everyone for all of the great info!

[rrockinggramma]

yes to the car, no to the relatives. You cannot pay them back or the trustee could definitely get that money back from them. Let them file a claim in your chapter 13 and let the trustee pay them. After discharge, you can pay the rest back, or once your plan is confirmed then if you can squeeze it into your budget, pay them back. DO NOT give them money from your tax return. Save your receipts on HOW you spend that money. As in car downpayment, roof, tires, food, etc. You should be able to show that you did not throw that money away. And to pay back your relatives is considered a big NO NO prior to filing bk.

[Michigan42]

Thanks again for the info r-gramma, but are you telling me I shouldnt pay back the relatives even if I wait until spring/summer to file? Also, I'm probably going to make less this year. Should I change my exemptions at work to get more $$$ week to week?

[rrockinggramma]

you want the lowest income to file on. The look back period for insider payments is two years so NO to the relatives. And a couple of the michigan trustee's can be real stickler's on this issue.

[Michigan42]

Thanks for all of the advice. I've contacted 1 attorney via email, I replied to him yesterday, but he has not replied back as of yet. I guess I should open up the phonebook and call a few in the Detroit area? I wonder if any do biz on Saturdays? What info should I give up over the phone?

[Michigan42]

One more question: If the trustee can go back 2 years & find I've paid back borrowed money to my relatives from the last 2 tax returns, can they go after them for that $$$ too? I really dont want them dragged into this situation.

[MJJ3767]

How much money are you talking about that you owe the in laws?

Change your deductions to get more money back in each paycheck.

[Mi Bankruptcy]

One more question: If the trustee can go back 2 years & find I've paid back borrowed money to my relatives from the last 2 tax returns, can they go after them for that $$$ too? I really dont want them dragged into this situation.

Anything is possible. However, reading your situation and your income level I would be too worried about them looking back. It might be an issue if you paid them 10-20K. However, if you paid them 1k-5k. I wouldn't worry about it. The issue is you don't want to make any payments or incur any charges to any individual or creditor after your initial consult. I can not stress enough how much you need to meet with at least 3 attorneys. Don't tell the attorney your thinking about a CH13. Tell them you want a Ch 7 and make them explain in detail why they think you have no alternative to Ch13. Have you done a means test?

[Michigan42]

Thanks MiBank. I owe my mom 2k & my m-i-l 1200, so $3200.00 total this past year. In the past never more than 1k from each parent. I did find a means test online somewhere & passed (I think). I want to keep my home, cars & furniture so I thought a 13 was the only way. It looks like a 7 clears all your debt, but you give up everything. Can you point me towards a means test online? Also, I'll call a few lawyers & set up some time next week.

[Mi Bankruptcy]

I am not sure what means test I used. It sounds like we are in the same boat. Do you have equity in your cars? How about your home? We told HSBC( best buy) they could have their computer back and we told the furniture company they could have the furniture we purchased ( 3 years ago). Everything I read is they typically don't want the stuff back when you tell them you are not reaffirming. Of course, if you just purchased it they may want it back.. That's why they tell you to wait 6 mos + if you purchased a big ticket item. You don't want to look like you were intentionally trying defraud.

I received a reaffirm for one of my autos( wells Fargo). They lowered my interest rate and monthly payment. Most people recommend not reaffirming anything. Search for my name. I had a pretty good thread debating reaffirming the home.. why to or why not too. I am not in foreclosure and have never been late.

[Michigan42]

My cars: I paid $300.00 for a 2000 Focus that was not running. I've got about $1000.00 into it just to get it into running shape, & with 190k on it, its probably worth about $1500.00, but its not a nice vehicle. My wife's van is a 2000 Windstar & with 55k on it & is not a bad vehicle. I'm paying on it through Huntington Bank & I owe approx $6500-7k on it.

I've got 2 computers in which I use for my side video production biz. Theyre both iMacs. One old one which is paid for (worth maybe $200.00) & the other is 3 years old in which was charged (worth about 1k or so now). I bought a vid cam last year, but paid cash for it. All my furniture was either given to me or long since paid for & at least 6-7 years old. I do have an LCD TV in which I paid cash for 3 years ago. Over the last 3 years I've had to replace all of my appliances because the old ones just went kaput! I either charged them on Best Buy or DMB. My refrig, microwave, & washer all crapped out within 2 mos of each other last year, & that really ran up the charge cards. Btw, I think my hot water tank is about to take a crap on me too, nice. The money ($1200) I borrowed from m-i-l was for driveway repair (new cement). I was getting tired of shooting rocks (pieces of driveway) at my house with the snowblower.


My home: I bought it for $168k 4 years ago. The 1st loan is 135K (int only) loan & the 2nd is 33k. The comparable home sales in my neighborhood are tanking, big time. If they can sell their getting between 100-122k. There's a nice one down the street, bank owned, going for $86K. So, I'm at least 40-50k in neg equity.

I dont quite understand the "reaffirm" thing?

I cant think of anything new weve bought recently. I started to get into trouble in the fall (Oct) of 2008 with the cc debt. We immediately made changes as far as adjusting the cable bill, phone, no going out to eat, nothing extra. I've been wanting a newer car for awhile, but just couldnt do it in good conscience. Now, I realize I might have to get one.

[Michigan42]

I wrote to the credit counseling service I used a few months ago for bk attorneys in my area. Btw, can the CC co's try to garnish my wages? I've only missed 1 or 2 payments so far.

[woeisme]

yes, they can garnish your wages, but it will require a judgment from the courts, which can take months, so most creditors don't pursue that option initially.

This is totally my own opinion, so take it for what it's worth... just a suggestion and not legal advice in any way, shape or form! Anyhow, if you cash your tax refund and have reasonable explanation for where it went (my car has 190K miles on it and needed repairs, I was catching up on back mortgage, attorney fees, etc.) that the trustee will buy as reasonable, I don't think you need to sweat it too much if you use it to pay back your Mom and in-laws. We're not talking major $ here, it is not going to be surprising that you already spent your tax refund if you file mid-summer. We filed in Nov, and had gotten back 4K that year for tax return, trustee never blinked an eye, what would be really surprising is someone in financial trouble NOT spending their tax returns over a 6 month period! But don't write them a check, pay them cash if you do pay them back with the tax $.