Read for four hours, have some questions

[ecsclb1724]

I spent four hours last night reading and have some questions that maybe everyone can answer.

I read the sticky on the community property states (we live in WA) but I would like to file separately from my husband in hopes of saving his credit (just about everything is in my name). I've heard that they can go after HIM for the debt, but because its a community property state they can't garnish his wages because the money was used to determine the bankruptcy eligibility and is considered community property. Is this true? So pretty much they can go after him, but good luck getting any money?

Next: I have a car loan with a CU with a balance of around $800. My dad is a cosigner on the loan and I do not want him affected by the bankruptcy (I don't really even want him to know), can I pay off the car before the bankruptcy? I know its over $600 but I read that it would be OK because we're paying off secured debt, not unsecured.

Next: Car deductions, you can only claim the $4** ownership deduction if you're actually making payments on the car right?

Next: Are tax refunds included in your 6 months of income?

Finally: My husband has two cards in his name with balances (small $300 and $200), do those have to be included in the bankruptcy, if yes, could I pay them off beforehand?

I have a meeting later this week with an attorney but would love any answers I could get!

[novayalife]

Hi,
I dont know about anything else but regarding the tax refund my lawyer stated it would not be calculated in the six months income but added to your annual in the forms.

[JRScott]

I spent four hours last night reading and have some questions that maybe everyone can answer.

I read the sticky on the community property states (we live in WA) but I would like to file separately from my husband in hopes of saving his credit (just about everything is in my name). I've heard that they can go after HIM for the debt, but because its a community property state they can't garnish his wages because the money was used to determine the bankruptcy eligibility and is considered community property. Is this true? So pretty much they can go after him, but good luck getting any money?

I'm not up on WV law but whether or not they could garnish his wages would depend on state law. In general on a federal level they would be free to pursue him for any joint debts, how they may do so would be determined by state law.

Next: I have a car loan with a CU with a balance of around $800. My dad is a cosigner on the loan and I do not want him affected by the bankruptcy (I don't really even want him to know), can I pay off the car before the bankruptcy? I know its over $600 but I read that it would be OK because we're paying off secured debt, not unsecured.

If your dad is the cosigner then yes if it is IIB then he would become responisble. The danger here is you need to make sure you can exempt the car's equity with the exemptions WV allows. If you do pay off the 800 dollars then you need to wait at least 90 days after filing so it doesn't appear on the Statement of Financial Affairs.

Next: Car deductions, you can only claim the $4** ownership deduction if you're actually making payments on the car right?

Depends on your district

Next: Are tax refunds included in your 6 months of income?

No

Finally: My husband has two cards in his name with balances (small $300 and $200), do those have to be included in the bankruptcy, if yes, could I pay them off beforehand?

Yes you have to include all debts no matter how small. Yes you could pay them off beforehand if you can afford to.

I have a meeting later this week with an attorney but would love any answers I could get!

My comments above in Blue.

Good Luck with the meeting and feel free to ask more questions.

[StartingOver08]

Are you in WA or WV? Check the exemptions for your state here so you know how much you can exempt. www.legalconsumer.com

As to the two small credit cards, if you can pay them prior to your bankruptcy, do so. If you want to keep the cards out of the BK you have to close the accounts prior to filing and if they are paid you can close them "closed by consumer". Those amounts you are talking about are small and will not get extra attention since they are much less than the $600 allowed in the 90 days prior to filing. If you pay them off and leave them open they will be closed by the cc co even if they are zero balance and the cards will read, iib (included in bankruptcy). Don't risk that for such small balance cards.

As to the car, if you have a co-signer the co-signer will know about your filing.

Check your car's exemptions - how much is your car actually worth? Each BK district uses different valuation techniques. Here we have to use NADA Retail value, which is nowhere close to actual value (its much higher). In order to show a value that more accurately reflects reality, some people get a certified independent appraisal of the car (not expensive at all to get).

[JRScott]

Oops above I meant to file 90 days after paying it off before filing

Sorry about the WV I misread

Still don't know what the law in WA is as to what I said above

[StartingOver08]

Its ok JR, its still a little early!

[lalap123]

My lawyer told me that your income tax refund IS counted in your six month income. Can anyone shed light on why it wouldn't be?

[lrprn]

My lawyer told me that your income tax refund IS counted in your six month income. Can anyone shed light on why it wouldn't be?

This practice varies across the country.

The courts that don't include it have interpreted that a tax refund shouldn't count as income on the Means Test because it would be like counting your gross income that earned the refund twice.

The courts that do include it have interpreted that the refund puts cash into your hands during the six-month look-back, so it should be included in the Means Test income total.

So it's quite possible that your local court requires you to include the refund as income and someone else's court does not.

[BornAgain]

the refund puts cash into your hands during the six-month look-back, so it should be included in the Means Test income total.

That kind of reasoning is such nonsense that it almost makes me angry.

"You see, Petitioner, that when you received your paycheck those funds are income of course. You put your pay into a savings account for a few weeks but you withdrew it so that's income again. Then you bought some clothes but later retuned the clothes. When the store gave you the cash back -- that's income again. When you lost your wallet with cash in it and later found it between the sofa cushions... yep, income. Case converted to chapter 13."



That's how it feels anyway.