Paying Those Bills - and a Q about Expenses

[Walnut]

If I scrimp and pinch and probe deep, I usually muster up enough funds to pay a few of my CC bills - although for the most part it is far less than they are asking for. If I have been doing this, is it going to show when I fille that I have disposable income? Granted I do this instead of buying clothes (my closet is full of stuff at least two-three years old), more expensive food (steaks instead of hot dogs), and things for my kids. I am still kind of locked into that "I owe, I should send something - maybe they will stop calling" mode. If they review my bank statements, they could see I have paid some of the creditors (not all - the most annoying get nada) here and there. Also my only open account is a CU CC that I then use to buy food after the payment clears.

About expenses on the means test: childcare - is that a babysitter? children's education - do they mean like school supplies, fees, etc?

[anonymuse]

When and if you decide that BK is your only option, stop paying those bills and start saving for lawyer, courses, and BK fees. The courts will look at who you have paid to see if you are making preferential payments to one creditor over another. Their "red flag" mark is $600 in the previous 3 months. You also want to stop using the cards and making any cash advances at least 90 days before filing.

Here's a few good posts on expenses:

http://www.bkforum.com/showthread.php?t=2687

http://www.bankruptcyforum.com/showthread.php?p=33037#post33037

[Walnut]

OK - well my attorney says I should wait until I have been an established resident of Texas for two years (Jan 17, 2007) before filing to take advantage of the higher exemptions here versus Ohio - plus my wife is having kid #3 in a few weeks and is permanently quitting her job. The longer I wait, the better overall since her income will drop off of the means test and so far no one (many I have not paid in like forever) is threatening to sue me. I just get a lot of phone calls. I am not going to pay anyone else now that I have decided to go for Ch 7.

[SinkingFast]

The attny makes a good point. If you're this close to being able to use TX Exemptions, then go for it.

You not only need to save up for filing BK, you need to get used to a Cash and Carry lifestyle. That way you'll know what you actually spend for various things.

Yes, childcare is day care. But if your wife is quitting work permanently, you probably won't have that expense any more.

School Expenses on the Means Test are for if you sent your kids to Private School. That's to allow for Tuition.

Line 38 of Form B22A:

Education expenses for dependent children less than 18. Enter the average monthly expenses that you actually incur, not to exceed $125 per child, in providing elementary and secondary education for your dependent children less than 18 years of age. You must provide your case trustee with documentation demonstrating that the amount claimed is reasonable and necessary and not already accounted for in the IRS Standards.

Unless you have a child with special needs, I imagine you'd have a hard time convincing the Court you have more expenses than what's already allowed for in the Schedules.

[Walnut]

My attorney's payment is $299 for the filing plus $2000 fees, plus the smaller fees for the counseling and a service that helps clean up the credit reports afterwards to make sure everything is showing correctly. They need all but $1500 before discharge, then $150/month for ten months after. Can I include that $150 on the means test?

[ekelly4200]

My attorney's payment is $299 for the filing plus $2000 fees, plus the smaller fees for the counseling and a service that helps clean up the credit reports afterwards to make sure everything is showing correctly. They need all but $1500 before discharge, then $150/month for ten months after. Can I include that $150 on the means test?

wow! I am in NYC and my fees were $1200 including filing and course fees for joint CH 7. I thought we were the rip off capitol!

[CindyLou]

Thats sounds REALLY REALLY high. I would shop around a bit. Although cheapest is not always better, but I do think thats a little much.

[Walnut]

hmmm.... they also charge $3200 for a CH. 13. So that's high? Maybe this is a really good attorney? Well - I really don't have a lot of time to shop around since I have to take off work to do that. This guy seems pretty competant - I will grill him a bit more on Monday though. Seems like a worthwhile investment to trade $54000 in unsecured debt for $2000. Some of my accounts are pseudo-secured (HSBC like Best Buy, Sony, and Sears).

[SinkingFast]

Most attnys here charge between $700 and $1K-$1250 for a Ch 7, plus the $299 filing fee. We paid $2K for our attny's fee, but we were having to use outa State Exemptions. The extra was to research and apply the Exemptions properly.

Some attnys here wanted clients to use a specific Credit Counseling Agency and they wanted the Pre and Post BK Sessions done in their office. They were asking a bit more than you'd have to pay if you went, on your own, direct to the Credit Counselor. Like the Credit Counseling Company charges $35 for pre BK and your attny would bill it at $50.

Paying a 3rd party company for Credit Report cleanup is a waste, IMHO. That's stuff you can do your self if you're willing to take the time and write a few letters.

If the attny is offering the services ala carte and you can pick and choose what you want, that's one thing. If the attny is saying you HAVE to do all that stuff thru him/her, then I think I'd shop around.