Really confused. Can you guys help me figure this out?

[hopeforus]

This might be long, I'll try to make it short but I am bad about that. lol

My husband lost his job in Oct 2007. He was unable to get a new job because he was leaving for an Army school (reserves) in Feb 08 for 5mos. No one would hire him with him leaving. So we had to use credit to get us by a few months. He couldn't get hired even at Target... too qualified. So he left in Feb and was sent home in March because he broke his ribs during training. They sent him home without pay... to no civilian job waiting for him. We filled out a package for them to pay him for the 1.5mos he was home injured until he was declared "better". (still waiting on that btw) He had to just sit around and heal without an income until June when we was to go back and try again. So he went back in June and his ribs weren't ready to be kicked and they were re-injured. Sigh. Again... in July they sent him home without pay. Injured. Unable to work. We told them we weren't doing this again and he was done with the reserves. We couldn't afford to do this if they weren't even going to take care of him. After he was healed again he tried and tried to find a job. In this economy this is really hard! He finally found a job in Ohio (we are in Wisconsin) and he has been living there since the end of September.

During this last year we increased our credit card debt to around 70k due to having to pay our mortgage with credit. Our house isn't even worth what we owe on it and we didn't even get a risky loan. So we couldn't sell it.

Plan was to get the house ready to sell over winter and list in Spring. Then join him.

So now we have my husband in Ohio... paying for him to live there. Also paying for our mortgage and our insane 1k a month in credit card bills. He makes 60.5k a year before overtime... we get a decent pay now. But it's just not enough. We are separated for nothing. His pay can't even cover all *our* bills... nevermind paying for him to live there. So something has to go. Since we need to join him there anyway we finally decided to give up the house and just go rent a house there now. Keep paying the credit cards. It would have made me feel good not to get out of all of our debt. I have always had very strong feelings about this.

But when it comes down to it... trying to pay 70k of credit card bills forever is very daunting as well. We can't afford any services for our 8yr old son with Autism. Everyone, even die hard Ramsey fans have told us that we should just do Bankruptcy and get it over with. I am at the point where I agree with them. Just have to admit that this past year ruined us but it can get better.

Now... one problem I have is this...

We can't file in Ohio until 91dys of us living there. It will be 3mos on January 1st for hubby. Not sure if it has to be both of us living there for 3mos? Anyway... we are wanting to move us there around December 1st when he gets his next paycheck. He gets paid once a month. So this means we just sit around waiting till January to file. But looking at the exemptions... it's all confusing to me. It doesn't look like Ohio has as many exemptions as Wisconsin. I wouldn't worry about this too much except for the fact I have several sewing machines. We have our laptops and my camera. I use these for my sewing business. Well, business that is more of a hobby but brings in some money. Ohio doesn't have a federal exemption which seems to make Wisconsin look better. We have a house but it is upside down... does this mean we could use the unused homestead portion towards our extra stuff? We have a minivan that we plan to reaffirm to keep making the payments on.

We aren't behind in anything. I actually was planning to stop making our credit card and house payments this month so that we could have money to move into our new rental in Ohio at the 1st of the month. We also will need money for the attorney to file in January.

But do you guys think it would be worth it to bust our butts to file before January and do it here in Wisconsin instead? Or do you think we will be ok exemptions wise in Ohio?

I'm just really nervous. We made a lot of cash advances on our cards to our bank. But we can show that we paid our mortgage and other bills from our bank so would that be proof that we didn't just use the cash for stupid stuff? We did eat fast food a lot. We were depressed Do they make a big deal about that?

What will happen if we don't have enough exemptions to use towards my sewing machines and laptop? Will they just take those?

Sorry sooo sorry this was so long. I always feel the need to give background. I still struggle with the fact we are even doing this and I don't want people thinking we just went and bought a lot of toys and now want to wipe it all around. We were just trying to stay in our house and survive

Thanks for your suggestions and opinions

ETA that I'm also confused about what happens after we stop making our payments. We will be having a lot of extra money. I know we will have money saved up for the attorney but what do I do with the rest? Because I read that we can't have it in the bank right? Would I be able to take that opportunity to buy special needs items for my child without them saying anything about it? Or will that be bad? We shouldn't have a *whole* lot of extra in two months time... but maybe 2k.



C

[BROKENN]

Try this out for both zip codes: http://legalconsumer.com/bankruptcy/...test/index.php

Also look at Tools of Trade for your sewing machines.

And I don't know if you both have to be there a certain amount of time. Maybe you can do a few free consults with attys to find out the particulars on living apart.

[hopeforus]

Hubby is going to be looking into some consults this coming week. Looks like Tools of the Trade is much higher for Wisconsin. On the state side anyway.

Problem with filing in Wisconsin is that we will be 7hrs away. Hubby can't leave during a weekday to come up for an appt at the courthouse. Which just throws another curveball at us.

I'm really nervous about not making my payments. It's like I'm afraid they will come steal my car (which we don't plan to stop paying on) or arrest us or something lol I keep feeling bad for disappointing our bank USAA and we will have our banking closed and our insurance won't renew with them. We have to change our direct deposit before the 4th so our mortgage won't come out automatically. We also need to find new auto insurance. What a bummer. But I can't worry about them right? Or disappointing my neighbors? Sigh. Sometimes it sucks having morals. I care too much about all these other people. I need to remember we are doing this for our family so we can be together again...

[BROKENN]

Getting rid of the stress is much more valuable. And protecting your family.... Just hang in there. This seems to be a process

If he has a civilian job, and it behooves your family to use WI, then he should call in sick and make that one 341. If he is in the military, you can go it alone with the proper paperwork.

Keep changing your finances to the new plan and be sure and get those consults meanwhile!

[hopeforus]

How do you know which sites to believe? I've been looking at the legal consumer one but someone is telling me that all our stuff will be taken away from us based on another site saying up to 3k household goods total. Does this mean we will literally have no clothes or beds or anything by the time we are done? We have appliances that we were planning to take with us but there is no point to that I guess if they are going to count against us.

Now I'm all freaked out that our family of 6 will have nothing to even put in our house.

A friend also told me that while our income is ok for Chapter 7... they can still force us into Chapter 13. But I don't see how they could prove that we could pay our house and our 70k in credit over the next 3-5yrs? Our expenses after we move will still be 2k for house and car and utilities. Then we have food and gas. Do they move you to chapter 13 if you have anything at all left over after bills? So we can't have a savings?

Oh and he is a civilian. He can't take off a day to go to the courts to file and then for a 341 meeting though. Because don't we have to start the whole thing off by going to the courthouse or does the lawyer do that> But then again... if we are living in Ohio wouldn't that be hard to get a WI lawyer?

My brain hurts.

[BROKENN]

Whoops. Sorry.

[BROKENN]

How do you know which sites to believe? I've been looking at the legal consumer one but someone is telling me that all our stuff will be taken away from us based on another site saying up to 3k household goods total. Does this mean we will literally have no clothes or beds or anything by the time we are done? We have appliances that we were planning to take with us but there is no point to that I guess if they are going to count against us.

The Legalconsumer is a great site. I don't know who you are talking to. 3K is decent. Think of it this way, you couch is probably worth $25 bucks, your refrigerator $75 etc... use craigslist. They don't come haul your stuff off unless you have a boat, Rolex just as examples. The trustee is looking for assets. He doesn't want garage sale items. Take your appliances

Now I'm all freaked out that our family of 6 will have nothing to even put in our house.

Very unlikely.

A friend also told me that while our income is ok for Chapter 7... they can still force us into Chapter 13. But I don't see how they could prove that we could pay our house and our 70k in credit over the next 3-5yrs? Our expenses after we move will still be 2k for house and car and utilities. Then we have food and gas. Do they move you to chapter 13 if you have anything at all left over after bills? So we can't have a savings?

Yep, on legalconsumer you will see as you move through the Parts. You are concerned with disposable income at the end. What is your budget in the future without CC payments, etc. You are shooting for ~$190 if I remember. Add all the exemptions you can.

Oh and he is a civilian. He can't take off a day to go to the courts to file and then for a 341 meeting though. Because don't we have to start the whole thing off by going to the courthouse or does the lawyer do that> But then again... if we are living in Ohio wouldn't that be hard to get a WI lawyer?

You can get one closer to you though not your neighborhood in WI. And they need him to sign at some point. Maybe make special arrangements on the weekend. But really, he only needs to go to the one meeting, the 341. He should make this happen for obvious reasons. Shop around.

My brain hurts.

I know..... hang in there!

[hopeforus]

So even if our fridge was 2k and our oven 2k and our washer and drier were expensive as well... they won't count them as that? They are only a couple years old as we bought them when we moved into this house... back when we still had the job that pulled us to WI!

(edited to remove some questions that I answered myself after doing the worksheet)



OK I just filled out the other parts of the means test. I put in that our income is 5000 a month. 1k taken out for taxes. I was guessing on that as I actually haven't seen a real paystub yet. our last one included a heavily taxed bonus for relocation. Was 3k, but shouldn't affect the average since we had a couple jobs without an income at all. Then I left the car part as the default... if the default is more than what we pay for our van do we have to change that? Without even adding anything else in there... like telecommunication section... we are already up to 5471.00.

So that is more than what I said the gross was so we should be ok right? Do I automatically get the allowables that are on there? As it is written on there they have 1032 for housing, 1894 for food clothing etc, 324 for health, non-mortgage utilities 546, 489 for vehicle ownership, vehicle operation 186... those alone are 4471. Then you have to add in the taxes from his pay, the health insurance costs that we pay, life insurance, then add in our charitable contribution to our church... yeah, so that looks like we will be fine right?

But what about when he gets overtime??? Ack.

Doing the worksheet made me feel better though. After talking to my friend... who talked to her mother who is in finance... she made me feel like we were going to be forced into chapter 13. I was afraid we would have too much disposable income. But if they go by the allowable... we are ok???

Man, I am SOOOOO thankful for you even reading these posts of mine!!!!

[BROKENN]

So even if our fridge was 2k and our oven 2k and our washer and drier were expensive as well... they won't count them as that? They are only a couple years old as we bought them when we moved into this house... back when we still had the job that pulled us to WI!

Nope, garage sale!

if the default is more than what we pay for our van do we have to change that? Without even adding anything else in there... like telecommunication section... we are already up to 5471.00.

Do your real payment for van. Use allowable expenses or even more if you spend that much on an average during the year ie: Brake, tires etc come up every so often for instance just on car maintenance expense......

But what about when he gets overtime??? Ack.

It is a snapshot of the last six months for ACTUAL income. Do 40 hours for future, because you cannot guarantee.

But if they go by the allowable... we are ok???

You should be. Do it as close to real as possible not forgetting any expense.

[hopeforus]

I wish the special needs section was better. My son isn't cheap! But I don't have anything concrete that I pay for... but things that we NEED to set up but haven't been able to.

Thank you so much for your help. I've only really been thinking about actual bankruptcy since this last night. Foreclosure only since yesterday morning. There is just so much jargon that makes my head spin.

Our average income may be less too than I put in. I haven't added our months of being unemployed all up. I know that if we file in Jan... we will have about 16k work of gross with overtime for about 3mos. Then for the 3mos before that... well, nothing really. Do they care if you had no work at all? Do they still look at those unemployed months? How can those months count if you now have an income. Seems so weird to me. But I'll take it!

[Tbornetun]

You will add up the total actual gross income you received for 6 months prior to filing and divide it by 6. If you have 3 mo of no income and 3 months of income. Add up the 3 months of income and divide it by 6. This is your average income for the means test.

[hopeforus]

prob the only time i will be happy he was injured and sent home without money. And I guess it wouldn't be 3mos without pay. He was sent home on July 8th but the moronic army kept paying him for 1.5mos. So I guess from July to August 15th we had 9k in pay (I miss Military pay!) Oh wait, that was after taxes. Anyway then no pay at all until Oct 29th. That was 6k because of relocation money. Then I'll guess about 12k for Nov and Dec total. So that's... 27k but need to add in taxes from the military pay. So I'll say 30k even. Average monthly is 5k. Exactly what I started with haha.

Now I guess what I don't get... is the taxes part. would I put the taxes from his most recent paycheck when we file? I can't imagine averaging that part. :P

[Tbornetun]

If you are filing in January, what you need to do is exactly this:
July = gross
August = gross
Sept = gross
October = gross
Nov = gross
Dec = gross

Use the ACTUAL numbers

If your 5k estimate is right on, with a family of 6 in Ohio or Wisconsin, you are well below the median on the means test to qualify for Ch. 7. You don't need to fill out the remaining portions if you fall below the median in the first section so don't worry about the taxes.

You will be fine. If you are retaining an attorney, you won't need to worry about any of this anyway, they will do it for you.

[hopeforus]

Yep those are the ones I did Oh and I would def use actual numbers. I was just estimating. I get kind of obsessive when thinking things through. I only did the rest of the worksheet since a friend said that she has heard horror stories of the disposable income pushing them into a 13. So I got pretty nervous but I feel ok now. I would hate to do a 13. I'd rather foreclose the house and just do the rest on my own even though paying 70k off would be a pita.
It will definitely be 5k or less.

Thanks so much for your replies to me. I'm glad I registered here

[lrprn]

You will add up the total actual gross income you received for 6 months prior to filing and divide it by 6. If you have 3 mo of no income and 3 months of income. Add up the 3 months of income and divide it by 6. This is your average income for the means test.

Actually the average monthly income for the Means Test is calculated by adding up all sources of income (not just your paycheck) you received during the last six calendar months before filing bankruptcy, multiplying that figure by 2, then dividing the figure you get by 12. (Keep in mind....the government and your creditors were both involved writing the latest bk law that mandates this goofy method :/)

Here's an example - during the last six calendar months before they filed, Mr A and his wife had a total gross income from all sources of $20,000. Divide 20,000 by 6 = 3333. Multiply 3333 by 12 = 39,996. Divide 39,666 by 12 = $3305.50 ($27.50 less than the couple actually makes). That's the figure that gets plugged into the CMI income slot on the Means Test.

Here's a good discussion of how this CMI calculation method can penalize those whose income varies considerably month by month - http://www.************************/...fail-the-next/