Question about high income earner

[Freshstart88]

This is really hard to admit I’m at this point. Ultimately over the last 8 years I have lived beyond my means, racked up credit card debt, taken out personal loans to pay those off and then racked the cards up again, had quite a gambling addiction, and then got caught up the stock market and made terrible investments. I fell into this terrible spiral and before I knew it it was so incredibly out of control. A lot of excuses and extremely poor money management and discipline led me to this point. I have lived in constant stress over my finances for so long that I don’t even remember what it feels like to not be worried about money.What makes this all worse and more embarrassing is I have such a great job and make great money as a travel nurse. I shouldn’t be in the position, but I am. I couldn’t keep up with my payments and ultimately had to stop paying most of them. I am around 60-90 days late on a lot of my creditors. I think bankruptcy is my only choice. I have over 230k in just CCs, personal loans, and additional 50k in student loans, and I will owe around 50k to federal taxes this year. I have about $6000 in savings and my vehicle is collateral in a secured loan (which I am current on) but otherwise absolutely no other assets (single, no kids, no house or properties).
Here is my issue with income, as a travel nurse I am technically an “contracted employee” but I go through an agency so I am not an 1099 or anything. But my income is never guaranteed for long as my contracts are typically about 13 weeks. The contract I am at right now is very well paying at puts me at a yearly gross of about 200k. I only have this job until the end of June. After that I plan to go home to Michigan and not work. I am in grad school and plan to start clinicals in October which should last around 4 months and during that time I will not be able to work as I will be in clinical full time. If I don’t work from July-January (6+ months without income) could I essentially apply for chapter 7 in January? Would they allow this or consider it bad faith? If I save up money over the next 4 months so that way I can live off of that for the 6 months without income, will that look bad? I was thinking I could negotiate some settlements with creditors on a payment plan to avoid being sued. But I don’t know if I should do that. I have a meeting with a bankruptcy lawyer set up but just wanted to see if anyone has had experience with anything like this. Thanks for reading this. Feeling pretty hopeless..

[justbroke]

If I don’t work from July-January (6+ months without income) could I essentially apply for chapter 7 in January? Would they allow this or consider it bad faith?

There's no way to tell if the assigned Chapter 7 Trustee will care or will poke and prod. They will see your prior tax returns (since you must provide the prior 2 years) and may wonder why you had such a drop in income. It's just too difficult to tell what would happen. Too many factors.... too many different panel trustees... and don't know if the UST would become "interested" in your case.

If I save up money over the next 4 months so that way I can live off of that for the 6 months without income, will that look bad?

Again, no way to tell.

I was thinking I could negotiate some settlements with creditors on a payment plan to avoid being sued. But I don’t know if I should do that. I have a meeting with a bankruptcy lawyer set up but just wanted to see if anyone has had experience with anything like this. Thanks for reading this. Feeling pretty hopeless..

Negotiations are not guaranteed and you will likely end up with a taxable 1099-C forgiveness of debt if it did work.

I will always say, from my personal experience, just keep working and living. What comes may come. In other words, keep your job and deal with the consequences. If you end up in a Chapter 13, is it all that bad? Also from personal experience, never ever deplete savings or retirement accounts to pay creditors or survive. It's a losing formula.

[Freshstart88]

justbroke well I have an update. I ended up moving home and taking a low paying job at a local clinic. May income was well under median for 6 months So I filed ch 7 a week ago.

Well My lawyer just called and said the department of justice called and is questioning my case with my drastic change of income and they are concerned that I will just go back to travel nursing when my case is discharged. My lawyer is telling them why I had such a change of income (mental health break mostly) but how am I supposed asure them I won’t go back to traveling when my case is discharged? I don’t know what my future will hold? The travel industry is changing. I don’t even know if there will be a job for me later and if I’ll even take it.
Is it really likely they’ll deny my chapter 7 based on the *possibility* of future jobs or income?

[justbroke]

It is the job of the Office of the United States Trustee (OUST) to question cases. They especially question cases where there was a high income then a low income. They question even further when the debtor has the potential to go back to making a significantly higher income. They question even more if they think this was a "planned" bankruptcy (reducing income just to qualify).

All you can do is see what the UST wants to do. It appears to me that your attorney is on the case and telling you not to worry.

So... don't worry. It is the UST's job to probe in this area and to make sure you are deserving of a fresh start under chapter 7.

[mikpart84]

any update?

[Freshstart88]

mikpart84 yes, my class was successfully discharged and closed 2 weeks ago!! Yay!! 😀