My details...need advice.

[rexy]

I know there is a six month look back, but what if one of us will lose our job next month? Do we have to wait six months of no income? Or will they look at current situation. Hubby is looking for a job but we are preparing for the worst.

[btbeme]

Hi, welcome.

The six month look back for income starts (ends?) the day you file. Income isn't a problem if the six months backward from the day you file is equal to or less than the median income for your county. So, if you have high income but lose a job, it can be beneficial to NOT have income for a while. But, if your income from a current or a new job is lower than the median income for your area for the last 6 months, having a job has no real bearing.

That said, income isn't the only limbo bar for qualifying for a Ch 7. Your allowable expenses must "line up" properly and leave you with little or nothing at the end of the month in order to not get moved into a Ch 13.

Toss us some details on your income and assets. We can help. Also include a summary of your debts.

[rexy]

My details...need advice.

I posted a questions last night, and I think I was in the wrong subgroup. However, here are my details.


My gross income 4950.00
My hubbys gross income 3416.00

My current take home (taxes, insurance,) 3468.00
For two of the last six months my takehome was 2568.00 due to garnishment

Hubby's current take home( taxes, insurance, recent ) 2000.00
This has been going on for the last six months and would continue, except hubby has
been laid off (March 31st his last day)

We owe 156,000 on our mortgage. Had a modification and it is 2% interest and we are current.

Mortgage 1129.00 (includes escrow)
Car 457.00 current owe 3500.00 chase bank
Car 398.00 current owe 12,000 santander consumer

Student loan 25,000
IRS (tax year 08) 15,000- They want $400.00 a month- no lien

Credit cards are all old, charged off 45,000
We have two current judgements and a pending one coming.

We are in Oklahoma. 3 person household.

Any advice? or need more information.

Thanks

[LadyInTheRed]

Welcome to the forum, Rexy. I combined your two threads. But, now I'm not certain the Chap 13 forums is the correct place because you may be able to do a 7. If you want the thread moved to "General Bankruptcy" let me know and I'll move it.

You need to consult with a few experienced BK attorneys. Because your future income will be different than your 6-month look back there is a Supereme Court Decision that may apply to you that says your Schedules I and J should be forward looking. This could be a good litmus test as you interview attorneys. If your husband doesn't find a job and you are told by an attorney that you should wait to file until your 6-month look back income drops, ask whether the Lanning decision could apply to your case. If an attorney doesn't know what you are talking about, I would find a different attorney.

[rexy]

It is fine where it is, thanks for combining my threads.

I have been here for a while doing reading. I am finally posting because I did have a consult with an attorney and she said Chapter 13 no matter what as our income is too high because of my salary. From my reading I disagreed with this, but since I am not attorney I can back to seek advice.

Thanks

[SMinGA2]

A good place to start: are there reasons you would do a ch. 13 if you could do a ch. 7? (Sometimes there is a choice...)

Some reasons to opt for a ch. 13: you're ineligible to file ch. 7 (due to having filed already in the last 8 years), you want to cram down an upside down vehicle (need to have bought the car 910+ days before filing), your home is worth less than you owe on the 1st & you want to strip the 2nd, you are behind on secured debt and wish to pay off the arrears over time.

There may be others - but those are the major ones I can think of.

Since you're in the 13 thread I'll assume you have a reason for filing 13.

Based on my understanding, you would assess your disposable monthly income going forward in a plan. Since your spouse is being laid off (unemployment income, change in expenses?) you should build your #s around that. Chances are, you won't be ready to file in the next 4 weeks anyhow.

In your expenses, count things you'll continue to pay. Your student loans & tax debt will go into the plan. Rack your brains to come up with a reasonable budget you can live on. Account for the usual things like utilities, groceries, insurance, gas and so on. Try to think of everything, such as reasonable amounts for vehicle & home maintenance, medical out of pocket, personal care, clothing, etc. If you have an accurate budget, and are careful with your money, then life in ch. 13 shouldn't be too touch. You'll have extra money each month - such as the months where you don't have car maintenance, don't buy clothing, etc. Set it aside for when you need it.

For some things you'll need to consult a local attorney. Depending on your district: you might end up paying your car payments like normal, or they may go into the plan payment. If they go into the plan, they'd get paid off in full during the plan. If you are to keep paying them like normal, your plan may call for you to increase the plan payment when you pay off a vehicle. If you need to file a ch. 13 (such as because you had a ch. 7 5 years ago) then this can help you on a tight budget. What if you don't have any DMI but you're paying $855 in car payments? The $855 becomes your plan payment, cars are paid off in the plan.

[rexy]

Staci,

I don't have a reason for a 13, I thought from all my reading the 7 would be the way to go. I was just surprised by the attorney response and thought maybe I missed something.

I bought one car just a year ago and the other is almost paid for. I don't want to lose my cars or my home. We have no other assets really besides, clothing, furniture, etc. We are current on the mortgage and only have about 3500.00 in equity.

The unemployment income will be about 1150.00 per month.

Thanks for your help, I am just trying to get more information before I consult with another attorney.

[SMinGA2]

The key to finding a good attorney: one who will look at your income AND your expenses.

Right now (and that's not really relevant since its about to change) your household net is $5468. Your mortgage & car payments are $1984.

When you add up your utilities, insurance, expenses, etc. what is left? For expenses in a ch. 7 you want to think about what is reasonable. Its not reasonable to eat beans and rice every day, for example. So just because you COULD get by on $200 a month on groceries doesn't mean you should have to.

For ch. 7, you would not count IRS & student loan payments - those amounts could turn into a ch. 13 payment. You would count all living expenses, and you would count the car/mortgage payment. Sometimes there are things you could/should add to your budget - such as taking on life insurance if you don't already have it.

It is fine where it is, thanks for combining my threads.

I have been here for a while doing reading. I am finally posting because I did have a consult with an attorney and she said Chapter 13 no matter what as our income is too high because of my salary. From my reading I disagreed with this, but since I am not attorney I can back to seek advice.

Thanks

[SMinGA2]

From a quick Google on OK exemptions, it looks like $7500 vehicle equity is allowed. (I'm assuming it doubles for joint filing, so $15,000 total, but I am not 100%.) Probably not a problem there.

Some attorneys may look at a person's income level and make a decision then & there. But there is more to it than income alone. Based on net income of $4618 (using UE), you have about $2600 of income to 'eat up' after your mortgage & cars. It doesn't take long to run thru that. I don't know your #s - but perhaps you should put together a thorough budget and take that for your next attorney consult. Also discuss how your spouse is about to be on unemployment, and I believe its the Lanning case that sets precedence for the look forward approach on determining DMI.

Don't pay a dime to an attorney who wants to put you in a 13, unless you are confident you understand & can handle the plan payment said attorney proposes.

You would still have to deal with the student loans after a ch. 7 is over, but the tax debt MIGHT be dischargeable.

[btbeme]

To add to what SMinGA says, I suggest running your numbers through the Means Test online. An attorney would be interested in what you come up with and can make suggestions on how to limbo under the bar if possible.

In your case, though, allowable expenses such as car payments, house payment, student loans, etc - even the garnishment - work in your favor, so long as time is also on your side. Six months of lower income is a big help, especially if your district doesn't (yet) hang its hat on forward-looking income.

[rexy]

Well I passed the means test according to my own calculations. I have a huge three ring binder of all my necessary paperwork. The first attorney still wants to do a 13 because of taxes. I have appt for a free consult from new attorney.

Thanks to all for the advice. Much appreciated.