Filing this year vs next?

[erinmi]

We'd like to file before the end of the year but we are creeping up on the holidays so I don't know if we will make it. We are using an attorney who says it takes about a week to get the paperwork completed after we turn in our creditor list (finished) and our budget (almost finished). Then we have to have the appointment to sign, pay our filing fees-still figuring out how we are going to pay those....

We stopped using our credit cards last month and we were up-to-date on payments. We stopped paying after we met with our attorney Nov. 21 and decided to file Ch. 7.

Should we push to file this year?

Or wait until next?

[HHM]

It really does not matter.

Might as well get the ball rolling now.

[js1980]

You should check the DOJ Means testing web site.

There are some pretty big changes effective the first of the year. If you are filing single, this could make it "worse". If you have a family, it could get better.

The site is at:

http://www.usdoj.gov/ust/eo/bapcpa/meanstesting.htm

[erinmi]

We are filing jointly with one dependent. We fall under the median income for our state, but I will check it out.

Thanks

[Hollyhomemaker]

Any debt you incurred in using your c.c last month is considered fraud by the courts and will not be discharged under any circumstances. I cannot believe your lawyer allowed you to file knowing that rule and knowing your recent debt is seen as automatic fraud by the courts

I am filing in April so that it will be 6 months since last c.c usage per my lawyer; 6 months since usage and 6 months of payments towards that debt. However technically the rule is only 70 days for purchases and 90 days for balance transfers.

[tay666]

One thing to consider.
Will you be getting a good sized tax return this spring?
If you file this year, the trustee just may take all that tax return as it is money from tax year 2007.
If you wait until next year, get your return and spend it on non-luxury items then the trustee can't touch it.

[erinmi]

Hmmm....
We haven't filed yet. Our lawyer said he should be able to exempt our tax return because of the way Michigan's exemption laws work.

We used one card for a couple hundred dollars in miscellaneous purchases and one for a credit report since we used up our free ones a lot earlier this year. He informed us that if they weren't for large purchases or luxury items, we should be fine.

We were told NOT to pay our cards or at least not more than $600 to any one creditor in the last 90 days.

This is so confusing

[JollyGG]

Any debt you incurred in using your c.c last month is considered fraud by the courts and will not be discharged under any circumstances.

Actually the code says that any charges for luxary goods or services totaling over $500 in the last 90 days or any cash advances over $750 in the past 70 days were assumed fraudulent. And even then, for the charges to be non dischargable the creditor has to file an objection to the discharge of that debt. Most don't bother for anything less than a couple of thousand.

We were told NOT to pay our cards or at least not more than $600 to any one creditor in the last 90 days.

The reason for this is two fold. 1. By paying toward debts that will be discharged you are just throwing good money away. 2. Any payment to a creditor over $600 in the 90 days before filing can be called a preferential payment. In that case the trustee would go back to that creditor and get the money back to be distributed equally among all your creditors.

[erinmi]

Oh, that makes much more sense from what our lawyer told us!

Anybody ever dealt with Target National Bank? That is the one we put the most on in recent months...

[kiddles]

I second the suggestion to compare the standards for now and for after Jan.1 FOr my area - housing went way down, but transportation went way up.

[monkatom]

another ? regarding the 600 payent to a creditor. what if you are paying minimums on you're cc cards and the minimum paymnet is over 600?

[lrprn]

another ? regarding the 600 payent to a creditor. what if you are paying minimums on you're cc cards and the minimum paymnet is over 600?

Whether a payment to a non-secured creditor is a preferential payment is determined by your trustee. If it is a preferential payment, it doesn't affect you at all. It's between your trustee and the creditor.

Just curious....why are you paying a non-secured creditor if you are certain you are going to file?

[monkatom]

lawyer said we could and maybe should use money from sale of vehicle to pay bills taxes, insurance, etc and with the left over make a month or two of minimum payments since we used the CC's in October so he wants to put some distance between last CC usage and stopping making payments to help protect against fraud.

[jp2861]

I second the suggestion to compare the standards for now and for after Jan.1 FOr my area - housing went way down, but transportation went way up.

What area are you in where trans went up? It looks like it went down in every area, unless you're adding public trans into the mix. it looks like the new data has operating costs and public trans seperate, but I don't know if both are added together like prior to 1.1.2008.

One good thing is it looks like you can use the max allowed for the food, clothing, etc. category. After 1.1.2008 it says:

"National Standards for food, clothing and other items apply nationwide. Taxpayers are allowed the total National Standards amount for their family size, without questioning the amount actually spent.

I couldn't find where it said that prior to the new year.

[silverlotus]

One good thing is it looks like you can use the max allowed for the food, clothing, etc. category. After 1.1.2008 it says:

"National Standards for food, clothing and other items apply nationwide. Taxpayers are allowed the total National Standards amount for their family size, without questioning the amount actually spent.

I couldn't find where it said that prior to the new year.

Where does it say that? I want to print that out and take it to my lawyer since I won't be filing until sometime between March and May.