I really need your help. I need to file for bankruptcy. Please help.

[PoorGrammyinBK7]

Just wondering if the brother could pay the tuition and not have the income counted against her since the tuition might not be allowed as an expense.

[Help!]

Hi Wubbie, glad you're here even though I know what a tough time this is for you. You asked for opinions, so I'll share mine based on my experience as a high income filer. I think you're going to have a tough time overcoming the presumption of abuse and getting a Ch. 7 discharge. You do have high expenses, but unfortunately some of them are so much higher than the IRS Standards on the means test that you won't be able to use them there (for example, your car payments). Private school tuition is a grey area, but you certainly have special circumstances should that expense be scrutinized. The major obstacle will be that your unsecured debt level is very low.

When you meet with some attorneys and go through the means test, you'll see that the threshold for presumed abuse is based on a percentage of your total unsecured debt that you'd be able to pay. In other words, because your unsecured debt total is low it will take less disposable income to make it look like you belong in a 13 and not a 7. Any money that comes into your possession during that 6 month period can be counted as income and you'd be taking a big risk not disclosing that $1000/mo.

I'm not at all saying that Ch. 7 won't be possible, just that it isn't going to be a picnic. There are many things you can do before you file that will help your case, especially figuring out the timing.

As for what will happen to the house and the cars, that is largely up to you. The best thing you can do is to take your income, figure out what your real expenses are (not just what your bills cost you) and make a budget that assumes the debt you want to get rid of is discharged. You'll need to do this for Schedules I and J later on your petition anyway. If your heart is set on keeping the house, add in the mortgage payment as an expense. If it leaves your budget feeling a little tight, surrendering the house in BK might be your best bet.

There are so many decisions to be made and so many things to think about, but it's important to take the time to plan. Whatever you do, don't let fear or panic cause you to rush into filing without finding the right attorney. There is no rush, even though it can be frightening to find yourself unable to make ends meet for the first time in your life. Learn as much as you can and ask as many questions as you like - we are all here to help each other.

[wubbie412]

thank you so much guys.
i really really really appreciate it.

many asked whether i was current on bills and payments.
and the answer is 'yes' - but now my savings almost gone since ive paid everything from my saving the last 7 months.


well, im going to get it started (the "BK" process). thank you so much guys.

i first googled "bankruptcy community" and found bkforum.com
boy... am i glad to run into you guys.

once again,
thank you.


God Bless you all.

[BKParalegal]

A couple of points to think about as well. If your home is worth less than the first mortgage, then I would look at doing a strip off with your 2nd. THis can only be done in a Chapter 13, but make sure the attorney you talk with knows how do these(not all do). Also, I do some contract work in the Middle District of Florida (Miami, Ft. Lauderdale area) and I am told that the Trustee will/can modify the mortgage rate during the life of the Chapter 13 plan( basically locking your rate, there is a bill in Congress regarding this as we speak). Also, in regards to your son with the learning disability, the additional tuition charges and related educational expense are allowable deductions on the Means test. Lastly, depending on the age of your vehicle loans, and also if there were any insurance, warranty or trade-in deficiency financed in the loan, you may be able to cram down the loans and only pay what the cars are worth in the Chapter 13 plan.

Good Luck

[BigJohn]

What is the name of the bill in Congress called that deals with being able to reduce the interest on a mortgage?

[BKParalegal]

It is not formally attached to a Bill as of yet. I work for one of the lobbiest and this is the latest Press Release:

"......To help avert a foreclosure crisis, we propose an amendment to the Bankruptcy Code to empower bankruptcy courts to modify home mortgage loans as they can virtually every other kind of secured and unsecured debt. Our proposal does not seek to revisit the 2005 amendments to the Code. Rather, it seeks to remedy an anomaly created by a provision in the 1978 Bankruptcy Code, which singles out home mortgage lenders for special protection and makes the home mortgage on the primary residence virtually the only debt the court cannot modify and the home the only asset it cannot protect. The 1978 provision also denies low wealth and middle income consumers protections available to family farmers, corporations, and consumers wealthy enough to own two homes. Our proposal would remedy this anomaly in Chapter 13 and provide a comparable solution in Chapter 7 by, generally, permitting bankruptcy courts to write down the debt to the market value of the home and restructure the mortgage....."