Tell me this isnt going to fall apart!

[mdl]

Attorney called today to tell me that we were not selected to be reviewed by "auditor", so we will only deal with trustee....have NO IDEA what that means...
Also, he wanted a print out of all the withdrawals we have taken from our IRA from 12-1-10 until 5-31-11...He thought we were taking loans from a 401K, but I told him when DH got disabled and unemployed we switched it to an IRA that we can make withdrawals on penalty free because of his disability....
Ouch...we have drawn $24000 since December...we have been using this money to supplement my pay and his SSDI to pay the bills...nothing extravagant...did have to pay for some major repairs to my unemployed, needs a vehicle to find a job son......
So, I took the printout to the attorney at lunch and talked to the paralegal...She said she didnt know whether they would count this as income or not....he was tweeking the B22 forms....
So he calls later this afternoon and told us that we could not use the IRA after August 1....he said he was going to amend our petition and we would have to come in and sign.
Does this mean our payments are going to go up? The whole reason we filed was because we knew we were going to drain the IRA if we didnt stop the bleeding now.
Are we screwed?

[mdl]

Oh, and another question....
Am I allowed to buy and sell on eBay? That is how I get my clothes and have done so for a couple of years...I will sell some of what I have and replace it..
For example, I am selling several purses to buy one....am I going to get in trouble for doing that?

[shark66]

You would need to report *any* income, and selling on eBay clearly qualifies as such...

As for buying clothes or whatever else on eBay, Craigslist or at a garage sale...it's really no one's business...

Good luck.

[momofthree]

You are not earning "income" from selling your used stuff on ebay. You would have to sell the item for more than you paid for it for it to be considered income. I guarantee that you're actually taking a loss on all the used stuff that you sell. No worries about that. ;)

[wooisme]

how long have you been in bankruptcy? did you do your creditors meeting yet. has your plan been confirmed, etc. or are you nearly finished it

[newbie2]

mdl, $24,000 is a lot of money to withdraw over a period of 6 months or so. Your attorney may be able to get around "this is income", but I would be prepared to show a nice paper trail of where the money went. Start gathering receipts and such just in case. You've already provided the statements of the withdrawals, but receipts could come in very handy when you are questioned about how it was spent. Good luck to you.

[frogger]

mdl, $24,000 is a lot of money to withdraw over a period of 6 months or so.

You got that right......

You need to gather your receipts and be able to document where the money went.

[Pandora]

Ouch...we have drawn $24000 since December...we have been using this money to supplement my pay and his SSDI to pay the bills...nothing extravagant...did have to pay for some major repairs to my unemployed, needs a vehicle to find a job son......

I think the bigger concern I'd have at this point is WHY are you in a CH. 13 if you have to supplement your pay out of retirement accounts, or for that matter - at all? There will be nothing to fall back on during your 3-5 year Ch. 13 plan... $24K is a ton of money in 6 months....and given it was in addition to your / spouses income... yep, going to be an issue. What bills are you paying / have you paid? You shouldnt have any bills other than mortgage / car payment / utilities - all unsecureds should've been stopped being paid a while ago.

I think you're in for a Ch. 13 that is set to fail before it starts...

[IamOld]

Best wishes to mdl first and foremost!

I just found myself in a similar boat. I thought I'd be able to take a loan from my 401k (the idiot 401k admin gave out wrong info) and I can't. So I have to take a withdrawal for $700 to pay atty...and bills. Luckily I should still let me pass means test in Sept. Des said it counts as income...but for me this is EMPLOYEE money only - no match in this account - so it was just what was deducted from my check...hope in my district it can be somehow offset...

[salsa]

Seems strange that it can be counted as income... I think a lot of people pull from it to make ends meet, etc... Until I decide on how to move forward... If I get a judgement, there is no way I can meet that, taxes, 128, settlement pymnt. I will have to pull from it.

[forgotten]

Seems strange that it can be counted as income... I think a lot of people pull from it to make ends meet, etc... Until I decide on how to move forward... If I get a judgement, there is no way I can meet that, taxes, 128, settlement pymnt. I will have to pull from it.

Think long and hard before you pull from an exempt asset (IRA). If you end up filing BK you just threw that money away for no good reason.

[mdl]

Oh I can document where everything went. We pay everything with either a check or debit card and they list where it was used. We were pulling the money to try and pay the credit cards and truck and car payments....We were trying to act like nothing was wrong and trying to still live like we did before my DH became disabled and trying to pay my son's bills. He has been unemployed since December. The thought of BK didnt happen until April 14, when I did our taxes and found out we owed $12000.
We have not had our 341 yet - August 11th....I will take all the statements with me. We are still trying to rap our heads around this - well, I understand, but my DH has a brain injury and I am not sure he fully understands that he cant go buy like he used to.
Thanks for the support Pandora....but, we wont fail. We cant.

[Pandora]

Thanks for the support Pandora....but, we wont fail. We cant.

Wasnt being facetious with you if you took it that way; I was merely saying that if you must supplement your income during your Ch. 13 plan in order to pay essentials, then you need to know that it will probably not make it to discharge. Think of it this way: When you were pulling out $ to pay creditors, truck, repairs, etc due to income issues - what was the cost of doing that monthly? Was it less than $1K (trustee payment)? The percentage of Ch. 13's that make it to discharge / completion isn't very high, many convert to a 7. The biggest problem that you are facing is your income situation, in discussing it with you in previous posts and with your hubby on SSDI, are you certain that you can afford a CH. 13 plan of $1K for all 5 years? When you take your husband's SSDI of $1800 (taxed or untaxed, not sure but we'll go with it for now) and then add in your income of anywhere from $3384 - 3666 (gross) a month (24 / 26 pay periods), not taking into account any insurance, taxes, etc, gross monthly your current income is in the $5184 - 5466 range from what I gather.

From that number you need to deduct your standard tax deductions / withholdings that Uncle Sam gets, then your health insurance and any other things (IRA, 401K, etc), remembering that you need to adjust your withholdings accordingly since you owe in taxes every year. Once you get the actual take home pay number, it's then that you start deducting everything you spend $ on for the year, eventually ending up with your DMI. Problem is that you mention you are over $1300 in the red every month as it stands now since you dont include hubby's SSDI in the means test, but then add it back when doing schedules. So that's a positive $500 to you ($1800 - $1300) - question is, is when you ran the schedules, deducting everything, did you also ensure you had enough DMI for your CH. 13 payment of $1000 to the trustee?

Thats where I see issues - your income vs. Ch. 13 payment and still being able to afford all the necessities.

One other issue that may come into play is that given you just filed less than 1 month ago - and used some of that $24K to pay creditors - hopefully none of them were family, friends, etc as that can be a preferential payment.

I hate to see any Ch. 13 plan fail; remember it's a very long time and things do happen unexpectedly in the course of that timeframe. You have to be able to afford the necessities before anything else. I want you to succeed but I also want to be sure that you realistically have ran the numbers yourself vs. just relying on what your lawyer told you.

[Mayo]

When you take money out of an IRA don't you get penalized and taxed? Also when you get into 13 you will have to get used to a budget.

[sheilaE]

Regarding the selling on Ebay. I sell my kids outgrown clothes on ebay. When we asked our attorney if we needed to disclose it-his answer was: ONLY if you are claiming the money from the sell on your taxes. Good luck with everything!
Sheila