I think it is finally over!

[scott29]

Next year I can actually keep my tax return. Trustee took it every penny for 5 years. That had to be the worst part about it. I found that if able, doing little odd jobs for cash helps alot. Gives you a little extra to help out, or to have a little fun. I may look into getting a newer vehicle soon, thats the only debt I want to deal with. For those that are just beginning, hang in there. It can be done with a good budget plan. Save every penny you can, in case of an emergency. For those that are half way or more, congratulations, the light is near.

[ladyjenn]

We are thinking we are going to get "pushed" into CH 13. I am married with 2 kids, but claim single, no dependants so I am taxed high intentionally. If we are 13, should I change my w4? Would make sense to me! My DH is taxed a minimum, and I claim the way I do so we can get a refund. There is no sense in that though, it TT is going to take it.

[scott29]

I changed my tax info just this year. Main reason was because my health insurance went way up and I was going to lose about $50 a week. I have read on here alot that you should change your tax info so you will get more back each week and get a lower refund. I wish I would have done that five years ago! I probably gave the trustee $8000 in tax refunds over the years.

[muzzey58]

What pushes you into a chapter 13 is money. Not much else unless you have assets such as a home. Otherwise, file chapter 7. They will combine both incomes. In order to file, you’ll first need to pass the means test, which is measure of your need and income.



Most people who file for Chapter 7 bankruptcy have mostly unsecured debts. This includes debt from:

* Credit cards
* Medical bills
* Utility bills
* Personal loans
* Payday loans

If you qualify, all of your debts relating to these may be completely wiped out in just a few months.

People who have outstanding debt on big-ticket items like homes and cars and want to keep that property usually opt to file for Chapter 13 bankruptcy, which allows for repayment of debts over a 3-5 year period and typically allows the debtor to keep his property.

Also, in order to file you must meet the requirements set by the bankruptcy means test.
Chapter 7 Requirements

The new bankruptcy law that took effect in October of 2005 contains provisions that may prevent people from taking advantage of Chapter 7’s powerful debt reduction abilities.

The law now makes anyone who wants to file Chapter 7 bankruptcy take the Chapter 7 means test as a way of determining true need.

The means test is not designed to keep you from getting debt relief. Generally speaking, if you earn at or less than the median annual income in your state, you should qualify for Chapter 7 bankruptcy.

Depending on the situation, you may be able to earn up to $100,000 a year and still qualify.

Get a full list of state median incomes.
Chapter 7 Means Test Details

The first step of the means test is to compare the debtor’s income to the state median income where he resides.

The test ends right there for most Chapter 7 debtors—if the debtor’s income is below the median for his state, he can file under Chapter 7.

However, if a debtor’s income is higher than his state’s median, it doesn’t necessarily mean that he can’t file under Chapter 7: it just means that the debtor must move on to the next step of the means test and provide additional information to determine how much disposable income he has available to pay debts.
This is a paraphrase from the internet that describes the requirements for a chapter 7 vs. chapter 13.

In my case, my husband and I made too much to file for a chapter 7. We don't own property and were "forced" into a chapter 13. He had mainly credit card debt. He owned a 5 year old car and I owned a 6 year old vehicle with over 150,000 on the engine. My husband lost his home to foreclosure before our marriage. I had a very good credit score of over 700 before I moved to Ohio from PA. However, I injured my shoulder very bad and had to quit working as a nurse aide. After I got married I worked at a supermarket. That income put us above the state median level for a married couple. If I hadn't worked we would have qualified for a chapter 7. My original lawyer set our payback at 80% of the debt and close to $1500 a month. It took almost 40% of my husband's weekly paycheck. Try going from $1000 a week to $625 a week. Also, our first attorney messed up our IRS withholding. He told us to increase our dependents so that we would not get any refund. That was good advice. Bad advice, it caused us to pay more into the bankruptcy plan. We weren't living at all. We barely had any money left at the end of the week for food. I fired the lawyer and hired my current attorney. She petitioned the court to lower the percentage of payback to the debt and also she petitioned to lower our payments. I quit working in December right after we filed. My shoulder was basically numb from pain. So we lost my income. The first attorney refused to modify the plan before confirmation. We did a modification in the payments. It was lowered from $1500 to $1100. Still too much just for credit card debt. People complain about congress now. The bankruptcy bill that passed in 2005 was to benefit the credit card companies not the private citizen. Who would deliberately run up debt just to defraud a credit card company? The bill need repealed so that people who should be in a chapter 7 can be there. Chapter 13 was designed for debtors to retain property. People who have no assets shouldn't be in a chapter 7 plain and simple. Long story short, if you have to file chapter 13 adjust your w-4 withholding now. This way you can figure how much you will legally be able to keep without owing money to the IRS or other taxes. You want to be able to have as much money before you file. I wish I had known that beforehand. The IRS has a withholding calculator on their website which helped us reconfigure our withholding allowances. Also, call your local lawyer referral service. DO NOT CALL ATTORNEYS WHO ADVERTISE ON TV! They are way, way too busy to help you. I learned a hard lesson from not listening to my gut feeling about using a TV ATTORNEY. I found my new attorney from the local lawyer referral service in our county. Also, there should be a means test on the internet. Take you latest 6 months worth of paystubs and tally them all together. There will be a list of expenses on a budget sheet for you to figure out our expenses. If you have at least 25% disposable income be prepared for a chapter 13. I've been in this bankruptcy maze for almost 4 years. You learn a lot from being in a chapter 13. I've also learned a lot from this bankruptcy forum. I would advise for you to start to save money now. Do not bank it at all. The trustee will check for any access money in accounts. So keep cash in a safe place for emergencies. The best advise is to prepare yourself now. I wish someone would have advised me before I headed into this maze. You are your best advocate. Second, your attorney will be your second best advocate. You need to keep all correspondence between you, your attorney, trustee and your bankruptcy court. I'm almost done in about 10 months to a year. So keep your head held high and be proud of the decision to be responsible and get out of debt. Best wishes.