Qutting Job Before Means Test

[Moneypenny]

Hi,

my wife recently started working, which makes us not able to pass the means test (We mounted our debt in the years she was not working!) If my wife quits working six or seven months before filing ch7, will that be okay? we will not even need to take the second layer of means test because we will be below median income, but will that look suspicious or ruin the whole affair in some way?

she could quit on purpose, or also there is a big operation she needs which will put her out two months anyway. is the operation thing helpful, or unnecessary, in terms of how the ch7 looks?

Mostly I would just like to know if she can time the quitting of her job with the ch7 plans down the road.

thanks,

Moneypenny

[justbroke]

I can't give legal advice on whether you should voluntarily quit your job, so that you have a text-book Chapter 7 case. How would you answer such a question from the U.S. Trustee on that topic?

In any event, competent legal advice around pre-bankruptcy planning is not illegal. Also, quitting a job may not even be necessary. In the end, it all comes down to your income less expenses.

[bkmaggster]

Hi,

my wife recently started working, which makes us not able to pass the means test (We mounted our debt in the years she was not working!) If my wife quits working six or seven months before filing ch7, will that be okay? we will not even need to take the second layer of means test because we will be below median income, but will that look suspicious or ruin the whole affair in some way?

she could quit on purpose, or also there is a big operation she needs which will put her out two months anyway. is the operation thing helpful, or unnecessary, in terms of how the ch7 looks?

Mostly I would just like to know if she can time the quitting of her job with the ch7 plans down the road.

thanks,

Moneypenny

It's both of your incomes for the past 6 months divided by 6. Figure out how many months it will take to get you under median using that formula, and have her quit. If the surgery for 2 months puts you under, then use it. Quitting a job in this economy seems like a very bad idea, to me.

[Moneypenny]

Hi,

thanks. I quite am familiar with the schedules and calculations. my question is whether there will be a problem with the court. if anyone knows, please let me know. she will need to quit for two months anyway because of surgery. I suppose I could come up with a justification if necessary for the later 4 months of unemployment: we have 5-6 year old kids to take care of. But, would we be asked? This is the kind of thing I would like to know. Also, going forward I suppose we would need an explanation.

thanks,

Moneypenny

[kenshirley]

My wife lost her job (medical reasons~could no longer work) 6 months before we filed. We wanted to file then but couldn't as we wanted to go chapter 7 vs 13. With her income from that job and our two retirements we were over the means for chapter 7.
Nobody even asked why she was no longer employed. We just stopped paying our bills and saved up money for the attorney.
Worked for us.

[Moneypenny]

thanks. i wonder how typical that is.

how long can you stop paying bills for? I was thinking maybe three months before filing.

We are one of those cases where we keep up payments on time while they keep upping the interest rates to match, pushing us to the edge, which I suppose they have calculated precisely what the edge is. i wonder when i should stop paying. i am planning on a a pricey attorney because I am afraid of something going wrong. I was in a 3,000 attorney office and felt confident with them. A 1,000 attorney (or i should say, his assistant) seemed to want to push for 13 and it all felt kind of scary.

but i digress: i really only want to know about this job quitting thing before i talk to the attorney.

[Trixie007]

I stopped paying bills for about a year prior to filing (balances now in the upper 100k mark!). I stopped working early June of 2008 - attorney said no problem, they won't even ask why I don't get a "real" job. Definitely recommend the surgery before filing anyway in case of unexpected medical expenses if there are any complications - I had abdominal surgery in January and the cost was around 26k (before insurance).

[keepmine]

Nothing in the bk code says you must be empolyed. You won't be the first person on this site who quit a job or refused OT in order to preplan a bk.
In the remote chance the trustee inquires, nothing wrong with the truth-surgery and then a longer than expected recuperation time.