Would this timeline work?

[pepperoncini]

I've been gathering info about filing BK13. I'm a chicken, hate to dance with the CAs and creditors for too long and risk digging an enormous hole.

This is the first month we're late on every CC. Chase has sold to a CA along with HSBC and Merrick.

We have 4 Cap1 accts that are 30 days late at this point.

Could we stall filing BK13 until February after we get our tax refund? I'm expecting $4-5K even with W$ filing exempt and W5 advance on EITC. WIth $4-5K in a "mattress fund", could we file BK13 in February 2011 and convert to BK7 in August 2012 when we are eligible for a BK7 discharge again? Then we would lose just one tax refund, right? (the refund in 2012...)

It seems crazy to hang on so tightly to those refunds, but they represent about 10-13% of our annual income. We really need that money.

Could this work?

And only one BK would show on our reports from the initial BK13 that was converted to a BK7, right?

[newbie2]

I've been gathering info about filing BK13. I'm a chicken, hate to dance with the CAs and creditors for too long and risk digging an enormous hole.

This is the first month we're late on every CC. Chase has sold to a CA along with HSBC and Merrick.

We have 4 Cap1 accts that are 30 days late at this point.

Could we stall filing BK13 until February after we get our tax refund? I'm expecting $4-5K even with W$ filing exempt and W5 advance on EITC. WIth $4-5K in a "mattress fund", could we file BK13 in February 2011 and convert to BK7 in August 2012 when we are eligible for a BK7 discharge again? Then we would lose just one tax refund, right? (the refund in 2012...)

It seems crazy to hang on so tightly to those refunds, but they represent about 10-13% of our annual income. We really need that money.

Could this work?

And only one BK would show on our reports from the initial BK13 that was converted to a BK7, right?

When you eventually file the trustee is going to see your tax return, and see the refund. They will ask you what you did with the money. Find out what amount of cash is exempted in your area, and go from there. You may be able to protect all of that refund.

[pepperoncini]

Thanks. I don't think we'd have any trouble exempting the cash.

[momofthree]

I believe the 8-year-rule is based on filing date to filing date, so you wouldn't be able to convert to a 7 since it would still use the original filing date of the 13. What you could do would be to dismiss your 13 and re-file a 7, but like you mentioned in another thread, you would then have 3 BKs on your credit report. Then again, that won't matter much if you plan to stay away from credit from now on...

[lrprn]

Could we stall filing BK13 until February after we get our tax refund? I'm expecting $4-5K even with W$ filing exempt and W5 advance on EITC. ... It seems crazy to hang on so tightly to those refunds, but they represent about 10-13% of our annual income. We really need that money.

Just curious....it's only June - there's five full months left in the year. Why aren't you revising your IRS withholding now to keep more of the 2010 refund money over the rest of the year? That extra cash can help prepare for filing, and you won't be tied to jumping hoops to keep the refund (assuming it really does come back to you in February - this year many refunds were delayed until April in some states). You could file your 13 sooner to ensure complete protection against your creditors and, depending on your trustee, still keep a smaller refund next year.

Unless you're currently very close to your state's median income for your family size, this is an option to consider. Here's a link to the IRS Exemptions online calculator - http://www.irs.gov/individuals/artic...=96196,00.html . Plug in numbers to see what happens for the rest of the year - you might be surprised. Discuss the possibility with your lawyer - don't get stuck on how you've always counted on your refund in the past.

Even if you leave things the same for the rest of the year, you really need to consider not using Uncle Sam as an interest-free savings account. If your Ch 13 trustee allows adjusting your withholdings after filing (some don't), make the adjustment to receive just a small refund each year and keep the extra cash that's coming into your pocket in an interest-bearing account of some kind instead. You'll come out ahead in the long run. It just takes discipline to not spend every dime you make throughout the year. Bankruptcy is giving you a great chance to make that important change going forward for your family.

[pepperoncini]

Just curious....it's only June - there's five full months left in the year. Why aren't you revising your IRS withholding now to keep more of the 2010 refund money over the rest of the year? That extra cash can help prepare for filing, and you won't be tied to jumping hoops to keep the refund (assuming it really does come back to you in February - this year many refunds were delayed until April in some states). You could file your 13 sooner to ensure complete protection against your creditors and, depending on your trustee, still keep a smaller refund next year.

Unless you're currently very close to your state's median income for your family size, this is an option to consider. Here's a link to the IRS Exemptions online calculator - http://www.irs.gov/individuals/artic...=96196,00.html . Plug in numbers to see what happens for the rest of the year - you might be surprised. Discuss the possibility with your lawyer - don't get stuck on how you've always counted on your refund in the past.

Even if you leave things the same for the rest of the year, you really need to consider not using Uncle Sam as an interest-free savings account. If your Ch 13 trustee allows adjusting your withholdings after filing (some don't), make the adjustment to receive just a small refund each year and keep the extra cash that's coming into your pocket in an interest-bearing account of some kind instead. You'll come out ahead in the long run. It just takes discipline to not spend every dime you make throughout the year. Bankruptcy is giving you a great chance to make that important change going forward for your family.

I appreciate the advise...we're already claiming "exempt" on federal and filled out a W5 to get an advance on EITC. We're a family of 6 living on $37K - the atty even questioned whether we could afford to file BK13 with a monthly payment of $100.

For state taxes, we only claim 3 exemptions but we get minimal money back. I'm afraid that further adjustments would make us owe in the end.

[pepperoncini]

I believe the 8-year-rule is based on filing date to filing date, so you wouldn't be able to convert to a 7 since it would still use the original filing date of the 13. What you could do would be to dismiss your 13 and re-file a 7, but like you mentioned in another thread, you would then have 3 BKs on your credit report. Then again, that won't matter much if you plan to stay away from credit from now on...

Yeah, if it's 8 years from filing date to filing date, my plan won't work. I'd rather not have three BK notations on our reports...

But then again, the only thing we would possibly need is a car. But yeah, I don't plan on touching credit for at least 5 years. It isn't something taht I can deal with right now.