Help! When to File??

[scuguy77]

Hoping you guys can help us decide when would be best to file our Ch 13:

Looking at filing around April (would be first month outside 90 day window and before any lawsuits or things get ugly), also the whole reason were filing is because we will end up owing back taxes so want to file before those bills sit around and IRS gets antsy.

Last CC (and Bill Me Later) charges were in Dec. So April would be outside 90 day window. Charges on all cards during month of Dec were less than $200 (for food, clothes, minor car repair). (except for bill me later)

No charges will be made in Jan, Feb, March and of course April.

There was a balance transfer on one card in Nov of $1350 and that same card was the one we put all the food, household expenses (like clothes, prescriptions etc) which we use to pay in full but then switched to min payment so card balance went up quick (about $4k over 2 months), again last charges for everything was in Dec. (Dec was trail-off period).

The Bill Me Later (credit via paypal) did have about a dozen charges between Nov-Dec which were mostly for Christmas all of them totaled less than $1100.

Have been making minimum payments on all of them (was going to do that for Jan, Feb and 50% pymts in March).

If we filed in April what is the risk of AP from Bill Me Later? or the one card we did the balance transfer on (which is is also the card which has highest balance at $6k)?

[SMinGA2]

Unless you expect to have a very low % payback to unsecured, I'm not sure it would matter too much for you.

Worst case scenario, I believe, is the $1350 balance transfer and $1100 Paypal charges would need to be paid in full in your plan. And for a series of charges adding up to $1100, I think its unlikely that Paypal will take any action.

Question - is your tax withholding now correct, so that you won't owe taxes for the 2013 year?

[scuguy77]

Yes, in fact our proposed plan is currently 0.5% because of the large amount of secured and priority debt (wife's car in plan and all the back taxes).

So over the 5yrs unsecured non-priority is expected to receive about $546. The plan payment is pretty much the upper limit of what we can afford with our expenses which are in-line (or below those on the means test). In fact we are negative on the means test so Ch 7 could be an option but our thinking was that Ch 13 would give us time to pay off the taxes while keeping the student loans frozen.

We can pay the taxes or the student loan payments but not both (hence the 13), if we waited another 10 months we could do a 7 because 1 of the student loans would be paid off, freeing up room for a larger payment to taxes …but not sure if the CC's (and IRS for that matter) will wait that long.

And yes we changed our withholdings to put us at break-even for taxes …though thats a large reason why we have to file sooner or later (withholding change took $800/month out plus the $245 for the payroll tax change)

[SMinGA2]

If the taxes you will owe are for 2012, I think you have a little flexibility regarding time.

You can file an extension request by 4-15-13 and then not file your actual return until 10-15-13. Interest would be owed from April, I'm not sure about penalties/fees.