I've read through the 'stickies' and I've still got some questions...we are currently enrolled in a debt management plan but finding it hard to make ends meet by the end of the month, considering if chapter 7 would be a better route, we had a business that closed due to economy and had to take lower paying jobs and can't keep up with all of the bills that piled up during the transition time of finding those jobs...my husband found a job with the state and is worried that he will lose his job if we file is this the case? Currently he is a corrections officer and is wanting to get on as law enforcement in the near future. In reading about the vehicle allowance how does it work if both vehicles are in my husbands name, we only have a loan on one, the other is an older one used to travel to and from work only? How is it figured what our payments would be each month? The CCCS says that we can get ourselves out of this, but we are paying them 560 per month and its just seeming more than we can afford once we got into it. Thanks for the help!
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Welcome to BK forum!
Your husband won't likely lose his job for filing BK unless he is required to have a security clearance in which case there is only a possibility that he could lose it. I have yet of hearing anybody losing their job because of a BK.
In a Chap 13, your plan payments are based on your disposable monthly income (DMI) which is your gross income less required deductions and reasonable living expenses based on where you live and your household size. You will be allowed operating expenses for both vehicles, regardless of whose name they are in. But, you will only be allowed "ownership" expenses on the one that you are still paying on. You can find allowable expenses at http://www.justice.gov/ust/eo/bapcpa/meanstesting.htm. But, that may not cover all expenses that you would be allowed in a Chap 13. If you are in arrears on secured payments or have non-exempt assets, there will be a minimum DMI you have to show in able to get a plan approved.
CCCs are rarely more effective than getting out of debt than BK. Many find out too late that it was a waste of money. Your payment to the CCC is based on what your creditors would accept. A Chap 13 plan payment is based on what you can afford during a 36 to 60 month plan. When you complete the plan, all of your dischargeable debt is gone, which is not always the case when you are done paying a CCC.
considering if chapter 7 would be a better route,
The following means test calculator will give you an idea of whether Chap 7 is a possibility: http://www.legalconsumer.com/bankruptcy/means-test/
The means test calculator is no substitution for a consultation with an attorney, but is a good starting point. Read as much as you can here and ask questions to help you understand the BK process. But, also make appointments for free consultations with a couple of local BK attorneys.LadyInTheRed is in the black!
Filed Chap 13 April 2010. Discharged May 2015.
$143,000 in debt discharged for $36,500, including attorneys fees. Money well spent!
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Thanks for the reply, yes based on that we do qualify for the chapter 7 as we are below the median income guidelines..we are not behind on the mortgage, only one month on the vehicle (the other is paid off) and wish to keep both cars and home...chapter 13 does not require any liquidation of assets correct? We don't have anything (boat, etc) that we would have to worry about getting rid of..I will read into the exemptions.
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A Chap 13 does not require liquidation of assets, but your plan has to pay your unsecured creditors at least the value of your non-exempt assets.
If you are under median income, a Chap 13 will be very difficult. After you learn a bit more, I bet you'll decide on a 7, especially if you don't have any assets you are worried about getting rid of.LadyInTheRed is in the black!
Filed Chap 13 April 2010. Discharged May 2015.
$143,000 in debt discharged for $36,500, including attorneys fees. Money well spent!
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Originally posted by justme73 View PostHow difficult is it to keep the home and vehicle that you have with chapter 7? We've contacted an attorney for a consultation, hoping to have one done next week...If I knew it all, would I be here?? Hang in there = Retained attorney 8-06, Filed 12-28-07, Discharge 8-13-08, Finally CLOSED 11-3-09, 3-31-10 AP Dismissed, Informed by incompetent lawyer of CLOSED status, October 14, 2010.
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Hi and welcome!
Can't tell you how many folks show up here that have been in plans like yours and they just never work out. They wind up going bk after wasting all that time and cash.
The answer to your q re the house/cars is.... depends on what they are worth and what you owe. Hard to tell you more without that info. You are allowed a certain amount of exemption which varies by state. For most here, it's a non issue as many have underwater homes.
Keep On Smilin'
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Originally posted by justme73 View PostHow difficult is it to keep the home and vehicle that you have with chapter 7? We've contacted an attorney for a consultation, hoping to have one done next week...
It "looks like" there wouldn't be a problem with your house. Not sure about the cars; I listed some info below BUT, nothing in the world can substitute for the advise of a local attorney. They are the experts and you are paying them to be one for you!!
Iowa's exemptions are here: http://www.legalconsumer.com/bankrup...-law.php?ST=IA
Nice, there is an unlimited home exemption in Iowa!!
Real property or an apartment to an unlimited value; property cannot exceed 1/2 acre in town or city, 40 acres elsewhere (husband & wife may not double)
Iowa Code § 499A.18
Iowa Code § 561.2
Iowa Code § 561.16
One motor vehicle to $7,000
Iowa Code § 627.6 (9)
The equity in the vehicle you have financed can not exceed $7,000 (Kelley Blue Book Value of financed car minus the loan balance equals your equity). NOW, if you only have $1,000 or $2,000 worth of equity in the newer car (if you owe a bunch on it) and the older car is worth $5,000 you can reverse which exemption you use. Talk to your lawyer - they are the best at advising folks in their particular case - because they know all the details!!
Good luck!!~~ Filed Over Median Income Chapter 7: 12/17/2010 ~~ 341 Held: 1/12/2011 ~~ Discharged: 03/16/2011 ~~Not an attorney - just an opinionated woman.
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Thanks for the info, we're trying to read what we can on this so we understand a little more before we meet, the lingo is not the easiest...for the one vehicle we have financed, we owe about 8000 and the KBB is anywhere from 15-17ish depending on which one it is? Not sure if it's private sale or trade in? So, that would put us RIGHT at that number of 7000 right? The other vehicle value is only 1200-1600 we own that one clear, how does that work then? Are we required to get rid of it? We couldn't do that, we both travel out of town for work, me 45 miles roundtrip and he 90????
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