Just looking for an opinion...

[jorfer99]

Hi there,

We are a married couple in Oregon that brings in about $5500 a month after taxes. I also bring home $750 from contract work which we have to save 35% to pay taxes on. Total is around $6300 a month. Already talked to our lawyer and we are filling for Chapter 13 in May.

I have an IRS debt of about 40k, some of it (around 23k give or take) over 3 years old.
Together we have unsecured debt for 49k
Our mortgage payment is $2300 + $110 for HOA fees
Car payments are about $910 (need to keep them to get to work)
And other expenses. Total comes to around $6200.

After doing our budget we only have $100 left to pay if we keep the house at the current mortgage payment.

We have moved out of the house and live in a friend's house he was renting for about $1500. After doing our budget we have left around $650 of disposable income. Which it will translate to 39k in 5 years.

Here are my questions:

1. If part of my IRS Debt gets wiped leaving me with about 20k of secure debt, the lawyer and trustee fees and the 49k in unsecured debt. Will $550 a month do to make payments to the trustee?

2. We have some cash on hand, about 5k in a safe. Will we have to report that or do we just make it disappear?

3. With the new housing law, is it smart to wait to file till it passes and hope that they can do a cram down on our mortgage and reduce it so we can pay around $1500 in mortgage payments or just file and let it go and look to a future on a different house?

Thanks for any info you can provide.

[woeisme]

Hi there,


1. If part of my IRS Debt gets wiped leaving me with about 20k of secure debt, the lawyer and trustee fees and the 49k in unsecured debt. Will $550 a month do to make payments to the trustee?

If you can pay all your priority debt and secured debts, which it seems like you can with the $550 per month, and $550 a month is your total disposable income, then yes, it should be approved. The unsecured will only get a small fraction, looks like ~25%, but it is what it is.

As to your other questions, if no one know you have $ in the safe, can't be traced back to any recent withdraws, well... let me just say that you are "supposed" to report it. Whether I would or not, I don't know. I'm a sissy who tends to follow all the rules even when it totally screws me over, but that'd be a nice safety net if something comes up during your CH 13.

I might also wait to see about how the new rules will change with homeowners cramdown, but since it just got enacted, be prepared for your case to take longer as they try to figure everything out and generate caselaw.

[jorfer99]

Thanks for the response...

The only other question I have concerns Direct Deposit and stopping it now and just cashing my checks. Do they frown on this? I will deposit money to pay my bills and leave some in there, but trying to keep the most cash I can because I will be 5 long years.

Now, my computer died and I need to buy a new one. Will they also frown on this, since its a tool of the trade, but because of my work I cannot go cheap.

[EricaCallaha]

I would say that if you justify the expense of the computer, go for it. You use it for work.

Have you retained legal counsel? Just check with them as well. They can tell you what will throw up a red flag with your trustee's office.

Good luck.