extra money each month

[Hopefull1983]

Situation:
Now that I'm not paying my bills I have money left over each month.

Even after I fill in every expense on the IRS allowable expense sheet I find my self having about $700 extra each month. This is mainly because I do not have a car and certainly wont be able to have one until I'm done with this BK.

I make $2700 per month. Household of one.

Question:
What do I do so that I'm not forced into filing a CH 13 by the court because I have extra money each month?

[chloe0724]

There really is nothing you can do. The means test is to determin what your disbisble income is after you stop paying your creditors.

You're in the same situation I was in.

[DaisyMae]

Couple easy fixes:

Reduce your income, or increase your expenses. The first may sound dramatic- but being in a five year repayment is even more dramatic- and who is to say that in the near future even you will HAVE that excess income? What is you get into a 13, then lose your job, etc? You would have already filed BK, and then you will find yourself unable to make the CH 13 payments. Do you have a second job you can quit? A raise or bonus you can forego? Can you buy a more expensive health plan to increase your expenses? Buy a car with max payments? (You can always reduce your coverage after your BK is over, or sell the car, which would then give you a 'raise'.) Etc.

[Hopefull1983]

Reduce your income, or increase your expenses. The first may sound dramatic- but being in a five year repayment is even more dramatic- and who is to say that in the near future even you will HAVE that excess income? What is you get into a 13, then lose your job, etc? You would have already filed BK, and then you will find yourself unable to make the CH 13 payments. Do you have a second job you can quit? A raise or bonus you can forego? Can you buy a more expensive health plan to increase your expenses? Buy a car with max payments? (You can always reduce your coverage after your BK is over, or sell the car, which would then give you a 'raise'.) Etc.

Buying a car would solve my problem, but no one will finance me.

[stephenm]

Church. I think you can give up to 15% a month. There is a look back though so you can't just start one month and claim it on your expenses. If you can hang on for at least six months but longer is better. My last two years of tax returns showed my donations so it wasn't questioned.
Change your insurance. I paid the highest my employer offered. Get short term/long term disability and a term life plan. All of those count. Lower your car insurance deductible and increase your cover so your rates go up. Remember you have to fail the means test and then the schedule J.
Also, setup a flex spending account.
Find a car. Your interest rate will be through the roof, and it will be hard with the way credit is but it can be done, even if you know you are being ripped off for a short amount of time.

Go see a bunch of free lawyers and discuss pre bk planning. Some will work with you, some won't.

I make the most money for 2 people I know who filed bk and am the only one that had their chapter 7 go through. Take your time, learn everything you can. The first lawyer I meet said "There is nothing wrong with using what is on the books to your advantage."
I didn't go with him, I went with a trustee, but his advice made all the difference.

Also, what is the average income in your state?

[Hopefull1983]

Church. I think you can give up to 15% a month. There is a look back though so you can't just start one month and claim it on your expenses. If you can hang on for at least six months but longer is better. My last two years of tax returns showed my donations so it wasn't questioned.
Change your insurance. I paid the highest my employer offered. Get short term/long term disability and a term life plan. All of those count. Lower your car insurance deductible and increase your cover so your rates go up. Remember you have to fail the means test and then the schedule J.
Also, setup a flex spending account.
Find a car. Your interest rate will be through the roof, and it will be hard with the way credit is but it can be done, even if you know you are being ripped off for a short amount of time.

Go see a bunch of free lawyers and discuss pre bk planning. Some will work with you, some won't.

I make the most money for 2 people I know who filed bk and am the only one that had their chapter 7 go through. Take your time, learn everything you can. The first lawyer I meet said "There is nothing wrong with using what is on the books to your advantage."
I didn't go with him, I went with a trustee, but his advice made all the difference.

Also, what is the average income in your state?

I use to make around 60K per year, but this past year I lost my job and that's when the trouble started. I now make about 40K per year. My states median is right at about $46,800. I pass the means test because my income is lower than the median, but I still have disposable income every month because I'm no longer paying my bills and no longer own a vehicle. I would love to get a car, but my credit is around a 460 now from a 700. It also has a recent surrender auto on it. No one in their right mind would lend to me.

[JRScott]

You might could go to a used car place. I mean it might not be the best car ever, but I remember I got one financed when I lived out west by a place. Course times have changed a lot. Still might be worth trying. Just look for something within your means. A 200 dollar payment is probably the max you'd want, with gas, insurance and maintenance eating up the rest you need to.

[DaisyMae]

You can get a car loan, don't kid yourself.

But really an easier and better thing would be to get an expensive individual health care insurance plan that is allowed on the means test and also Schedule J. Then after the fact just cancel the policy.

[soleprop]

you could buy a car from a private party; just save a couple months' extra income for a $2000ish car. you might wonder why would you bother doing this? other than the fact that private parties don't do credit checks, a) it gets you a car, b) it's an allowable expense (buying a car with all of your now-disposable income), and c) which is by far the best reason - if you buy a car that is 10+ years old you're allowed a $200/month maintenance expense for the upkeep of the vehicle for the foreseeable future.

i'd advise an older honda; they're incredibly dependable and easy to work on.

and if you want to ditch it in a year or two, you can - well after your bk is discharged and closed.

[mmenz22779]

start a term life insurance policy, Increase your taxes, buy a used car (even if the the interest rate is 20+%, take out a 401k loan (the payments are a expense for disposable income)

[TEW]

Buying a car would solve my problem, but no one will finance me.