Prefiling question-*might* get new job before or during

[bumblefuss]

As it stands now, my wife and I owe around $40,000 (credit cards+back rent for last apartment) + about 16,000 for my car.

We both became unemployed about the beginning of the summmer and it took a while for us to find jobs.

Because of this, our income for the last 6 months falls more than 75% below our state's median income.

What happens if I get a (much) better paying job right before I file or soon after I file?

Would filing be (or have been) a waste of time and money? Or could it still be done given that the prior 6 months income is still (way) below the median?

[lrprn]

Welcome to BK Forum, bumblefuss! Glad you found us!

Would filing be (or have been) a waste of time and money? Or could it still be done given that the prior 6 months income is still (way) below the median?

Trustees commonly ask questions about your income during the 341 meeting which happens 20-40 days after filing. "Is your income the same as when you filed?" and "Do you expect any additional income in the near future?" are two frequently asked questions. If you don't answer truthfully, that's fraud. It sounds like you both may have new jobs that will increase your income in the coming months, true?

Just because your income is below the state median for the last six months does not mean that filing bankruptcy is the best option in your circumstances, especially if you do both now have employment. If you haven't set up 3-4 free consultations with bankruptcy lawyers in your area, please do it now before you do anything else. You will get a good idea through these interviews if bk is the best option in your situation. Also make an appointment with a reputable and reliable credit counseling agency (look for US Dept of Justice-approved legitimate agencies in your area here - http://www.usdoj.gov/ust/eo/bapcpa/ccde/cc_approved.htm ) Although a debt management program often isn't the best option, if you both do now have jobs, it could be a better answer in your situation than filing bankruptcy.

It would help us to answer your questions better if we knew more about your situation. Will you file together or separately? Do you both have jobs now? Do you have children? Is your wife a co-signer on any of your debt? Are you hoping to keep the car? Does your wife have a car and is there money owed on it? Do you have other assets you want to keep? How far behind are your secured and non-secured payments? Are there any court judgments or liens against you?

[bumblefuss]

Will you file together or separately? separately

Do you both have jobs now? yes, but making far less than we were pre-summer - I took a 60% pay cut, she took about 20-25% cut. We grossed about 70,000 last year. At the current rate, the two of us combine will be luck to make 35,000, and that's assuming neither her hours nor mine are cut

It sounds like you both may have new jobs that will increase your income in the coming months, true? She probably won't. I've applied for over 200jobs since the beginning of summer. Though I will be in touch with a recruiter today, I'm not getting my hopes up. But I'm concerned about how it could affect our potential for filing.

Do you have children? no

Is your wife a co-signer on any of your debt? yes, on one card and for our last apartment

Are you hoping to keep the car? yes - it's more of a necessity than a hope - have to have transportation to maintain a job.

Does your wife have a car and is there money owed on it? yes, sort of - borrowed money from family, so we do owe them for it.

Do you have other assets you want to keep? honestly depends on how assests are defined - we don't have a house, real estate, or anything grand like that. In our case it's more like "Can we keep the camera? The computer?" Etc.

How far behind are your secured and non-secured payments? Depends on the creditor - anywhere from 1-5 months

Are there any court judgments or liens against you? no

[SinkingFast]

OK,............. If you're behind on any payments on either car, you'll have to surrender the car(s) to file Ch 7.

Ch 7 is Liquidation BK. In order to keep assets in Ch 7, you have to be current on payments if you have a loan such as mortgage or auto loan. Also, you'll have to be able to cover the value of the asset with your allowable State or Federal Exemption.

We'd need to know what State you live in to help you with Exemptions.

The loan from family on the one car,........... Was the lien physically recorded against the Title of the car when the loan was made?? Even then, the Court may find a family loan suspect.

Read Amislander's post about her 4 Runner. Amis had a loan from Mom which was recorded against the title of the 4 Runner 10 months prior to filing BK. The Court has basically declared the lien invalid. Amis is battling with the Court now to keep the 4 Runner. Here's the link:

http://www.bankruptcyforum.com/showthread.php?t=10941

Computers, furniture, cameras, and such can be covered under your Household Goods Exemption.

Were you the one who makes a little extra money shooting photos?? If so, you could possibly cover the cameras under your Tools of the Trade Exemption.

When figuring prices of household items, you use garage sale, yard sale, and 2nd hand store prices for valuation. Think, "Where would I buy an 8 year old couch?" for pricing purposes.

[bumblefuss]

If you're behind on any payments on either car, you'll have to surrender the car(s) to file Ch 7. The attorney I spoke with said that as long as I got the car payments current prior to filing, I should be okay.

We'd need to know what State you live in . . . TX, but just moved here at the end of July from VA

The loan from family on the one car,........... Was the lien physically recorded against the Title of the car when the loan was made?? no

Computers, furniture, cameras, and such can be covered under your Household Goods Exemption. phew, good to know!

Were you the one who makes a little extra money shooting photos?? no, unfortunately

Thank you so much for your help on this!

[JollyGG]

My husband was also looking for a new job when we filed. He is actually still looking. We hurried to file so that it would be more likely that any job offer would be after the 341 meeting. That actually wasn't the best move on our parts because we are now dealing with some charges and balance transfers in the 70 / 90 day window. However, if you haven't had any activity on you cards that may be an option for you.
He actually made it to the second interview for a position a few weeks after we filed and I was really nervous about what it would do to our case if he got the job. My husband pointed out that while the money would make things easier, he would have to get a lot more of a pay increase then we expected from the new job in order for bankruptcy to not happen. He pointed out that the worst that would happen is that we would be converted to a chapter 13. In that case we would still be better off than we were.
This is where lrprn's ideas of talking to a credit counselor would come into play. They would help you figure out if there would be any way to pay this debt. Go to an approved counselor and you should be able to use your session to meet the pre bankruptcy education requirement as well as getting some useful information about your options.
In our case to qualify for a DMP we would have had to take home about $1,000 more a month. We decided that it was time to plan our finances on the reality of the here and now. After all a great job may come along tomorrow, or it may not. I can't plan my life around that eventuality.

[SinkingFast]

Dittos to Lrprn and Jolly's suggestion to speak with a Credit Counselor.

Here's a rough example. Just looking at your debt load right now and thinking in terms of a 5 year Ch 13 plan,............. If you get a new job before your 341, will you be able to pay back your debts in 5 years? Payments on the debt alone would be $1200-$1300/mo at 10.5% interest rate, roughly. Would you earn enough to live decently and pay the debt payments?? That's if all your Creditors agreed to a payment plan and no one wanted a lump sum settlement. And, assuming you take on no new debt in that 5 year time period.

That's the type of thing you should be considering. If it's feasible, then set a time frame for how long you'll look for the new job. If it's not feasible, then start looking for a BK attny. But you've gotta crunch the numbers first to guide you on what to do.

[bumblefuss]

As far as the possible new job goes, I may be worrying about nothing.

It's been 6 months since I lost my lost job, and I've been looking ever since. I just haven't had any real luck yet.

But, if it is the case that getting a job that would enable me to pay back my debts regardless of the fact that my income over the last 6 months has been nearly nonexistant, then I guess it wouldn't matter whether I get it or not from the point of view of filing for BK.

Thanks to everyone for your help.