Going to meet with attorney tomorrow

[chazdiezal]

Well wife and I finally admit that we are over our head and need help. I'm really hoping we can go for a chp 7 as wife has been unemployed since feb 09 and doesn't seem to have any luck finding a new job. I'm concerned with our income as she received a severance package when she was let go in jan. I only gross 2625/month and she now gets unemployment of about 2200/month. I'm thinking of waiting until july to file so we don't have to count jan income. We have back taxes from 2000, 2001, and 2005 for a total of 11,222. The taxes from 2000 and 01 weren't filed until 1/08 thus making them from what I understand non-dischargeable until 1/2010. I'm not sure if we can survive until then if we do wait. We don't own a home and are still financing two cars along with about 20,000 in unsecured debt and 36,000 in student loans. We need two vehicles as I work out of state and want to get rid of the tax debt. We currently have an installment agreement with the IRS in place. Would we be able to file for chp 7 or have to go 13? thanks.

[StartingOver08]

You may want to consider a Ch 13 since a lot of your debt is priority tax debt. You can fashion your plan payment so that it goes toward the taxes, attorney and trustee and none to secured. This depends upon your income etc.

Speak to a couple of attorney's that know Ch 13's well. Also discuss Ch 7, but in this case a 13 may very well work for you.

[chazdiezal]

Will my wife's unemployment compensation be counted towards the income pot?

[StartingOver08]

I'm not sure if it is a district thing or not, but according to this article unemployment income is not considered.

Unemployment Not Included In Means Test Income
By L. Jed Berliner, Massachusetts Bankruptcy Attorney on Oct 22, 2007 in Bankruptcy Cases & Legislation, Bankruptcy Practice and Procedure, General Bankruptcy Information, Massachusetts

The first step of the Means Test is to compute the average monthly income for debtor and live-in spouse for the past six full months before a bankruptcy filing and see if that is greater than the median income for the debtor’s household size. Such income is defined as excluding benefits received under the Social Security Act. Unemployment benefits are received under the Act but are not direct Social Security benefits, so the official form designers “punted” and allowed the debtor or counsel to disclose it as Social Security or non-Social Security income.

A recent Massachusetts bankruptcy decision ruled that unemployment benefits are Social Security benefits and therefore not countable income. In re Munger. 370 B.R. 21 (Bankr D MA 2007) (Rosenthal, J). This decision has widespread implications, since foster care, day care, and adoption subsidies as well as most forms of welfare (but not Food Stamps) are similar benefits under the Social Security Act (although most recipients might not have to worry about having above-median income).

http://www.************************/...s-test-income/

[chazdiezal]

Had our initial consultation with an attorney yesterday and it went fairly well. She just took our bankground info and we explained a little bit of our financial mess to her. She is offering a 25% discount if we pay upfront before she files which comes out to $900 plus the court filing fee. We pretty much have a clear cut no asset case so we will be filing for chp 7. The only tricky part of our case is that we owe back taxes from years 2000, 2001, and 2005 which weren't filed until 1/08 so we are going to have to wait to file until 1/10. She recommended stop paying everything except our cars and daily living expenses. We will be saving up some money over the next few months so we can retain her and get the ball rolling. We feel so much better and the anxiety level has decreased tremendously.

[StartingOver08]

Since you are filing a Ch 7, you will need to contact the IRS to make an installment agreement to pay the back taxes. While you are in the Ch 7, the IRS will not collect funds from you for the installment agreement and you will have to rework the agreement after your BK.

You can not discharge the IRS debt since the returns were just filed. It is best to get a payment plan togother with the IRS proactively if you do not already have one - they actually are pretty good to work with, considering their reputation.

[chazdiezal]

I thought they are dischargeable if the tax period is at least 3 years old and the filing took place at least two years ago.