7 months prior: get life ins, increase + auto ins, buy car

[Moneypenny]

i am under my state mean (CA, sacramento), however i am way off when i do sched j.

if i do a bunch of things 7-6 months prior to filing, is that real bad?

I can finance and buy a car, i can up my auto coverage plus the new car, i can take out life insurance, i can get a new cellphone plan, etc. I actually do need all this stuff but I dont want to be asked about it.

Will this all look bad? or even if it looks bad, will it matter? I realize the answer might depend but i am here on the forum to get some idea of what to do.

i really want a ch7

thanks,

mmp

[keepmine]

Nothing wrong with preplanning. It's wise to get your transportation needs taken care of prior to filing.

[Moneypenny]

thanks! my question is if I rack up all these expenses before BK, is that going to result in a judgment against me? That is there might actually be something wrong with preplanning.

I would be buying a car, increasing auto insurance, taking out life ins, getting cellphone plans, possibly changing the number of deductions on my income to get more held back, and re-arranging my home equity loans so that I pay more per month, all about 6-7 months before filing.

I want to know if this will go badly for me....

thanks!

MMP

[jribe]

just make sure the car is a reasonable price and probably not brand new.

On the other things- life insurance and auto is fine; wouldn't increase the cell phone plan. The cell phone can be viewed as a luxury and they may not allow the expense. *maybe*

But everything is fine. Obviously you're not going to go and tell the trustee you did all this because you're filing. People just re-evaluate their needs..

thanks! my question is if I rack up all these expenses before BK, is that going to result in a judgment against me? That is there might actually be something wrong with preplanning.

I would be buying a car, increasing auto insurance, taking out life ins, getting cellphone plans, possibly changing the number of deductions on my income to get more held back, and re-arranging my home equity loans so that I pay more per month, all about 6-7 months before filing.

I want to know if this will go badly for me....

thanks!

MMP

[bxphae]

What is your goal with this? esp. racking up a higher mortgage payment? To keep these items? Meet a higher debt-to-income? Isn't this considered fraud if you know you're filing in the first place? <----not accusing, just more curious and looking out for a fellow BK'r

[Moneypenny]

A new car is not a good idea? I thought it was okay for it to be new. That is the first time I heard that one. Are you sure that you are not supposed to buy a new car, and it has to be used?

I of course dont want raised eyebrows, but I can tolerate them as long as I get away with a ch7.

I will be doing all this tweaking all at once, but luckily can probably get it all down beyond 6 months from filing. Problem is it is all at once.

Anyone got any other ideas for extra expenses?

MMP

[BkinTX]

Question: If you can afford all these lifestyle changes, are you sure bankruptcy is your best option?

[Moneypenny]

i am just trying to figure out how it works. i do want to move my equity loans away from the bank i also owe cc debt to, and we have two 10year plus cars with 120k plus mileage on them and we fear to be carless after bk. looking into things deeper made me realize my offspring are going to be broke if i die before bk, leading to life insurance, etc.

but i dont care if i am justified, just in what one can and cannot do. some things we can do that are, admittedly, not right or fair, while other things we are prohibited from doing even though they are right, reasonable, and fair. i need to know the limits in both cases.

also realized i have another problem: i got a big extra income check which wont fall within 6 months prior, but they took out a lot of taxes that i will get back shortly before bk. that sucks and i have to compensate for that.

MMP

[keepmine]

What is your goal with this? esp. racking up a higher mortgage payment? To keep these items? Meet a higher debt-to-income? Isn't this considered fraud if you know you're filing in the first place? <----not accusing, just more curious and looking out for a fellow BK'r

Nothing fraudulent about getting reliable transportation since, credit will be harder and more expensive to come by post bk.
Not sure what your point is about debt to income ratio-nowhere in the bk code is such a thing discussed.
You havea right to live a reasonable lifestyle. For most of us, some life insurance is necessary and prudent. A lender is going to require full auto coverage.
Just get a reasonable ride be it new or slightly used. The big thing is affordability and dependability. You want something with some warranty. Just don't show up in a $70K Jag.

[bxphae]

Nothing fraudulent about getting reliable transportation since, credit will be harder and more expensive to come by post bk.
Not sure what your point is about debt to income ratio-nowhere in the bk code is such a thing discussed.
You havea right to live a reasonable lifestyle. For most of us, some life insurance is necessary and prudent. A lender is going to require full auto coverage.
Just get a reasonable ride be it new or slightly used. The big thing is affordability and dependability. You want something with some warranty. Just don't show up in a $70K Jag.

I may have worded it incorrectly, but by increased debt-to-income I'm leaning towards him having less disposable income to a point of having negative figure after monthly living expenses are added up.

MMP, if you don't mind me asking, what type of car are you looking into, or better yet, what monthly payments are you aiming for? Cell phone?

What happens to your disposable income if you inflate it to the IRS standard of living (ei. does it increase or decrease)?

[liz417]

Nothing wrong with pre planning your bk. I drove an old clunker (no monthly payments)and purchased a new/used (less than 20k miles) vehicle less than 1 year before I filed BK. Before I considered BK I had cut back on EVERYTHING, when I decided to file I needed to "fluff up" my expenses, I got cable TV back, added a home phone with all the features, increased my cell phone plan, took my animals to the vet for checkups (and everything else), stuff I had put off because I was soooo broke trying to make ends meet. You get the picture. I qualified for a ch 7 with a $-123 DMI All that planning worked or I would have been stuck in a ch 13 for over 5 years!!! My 1st attorney told me I would be in a ch 13 plan at a $400-500 month payback.....so, a little "planning" helped
Good Luck!

[Moneypenny]

Exactly-- i have been cutting back, and all my disposable income has been going to cc's.

As for the IRS standard of living, i havent made the comparison yet. the sched j i am using (see my other message about Check Over my sched j) has a lot of little categories that are probably implied in the broader IRS categories. Will take some work to check that over but that is a good question. A few of the IRS categories are to someone like me off the hook! I dont spend that much on clothes for half a year let alone one month (although i can change my habits).

unfortunately i only have fish! they need medicine and food only. should i get a dog. ha ha.

no but seriously, should I get a dog?

thanks so much i really need this help. have to decide on a car soon. I was going to get a Honda Accord Ex with a sticker price of 25K, and monthly payments of 470 i think. I have a pre-approved loan (last time i can say that!). Oh, which makes me think: is it possible to not get a 60 month loan and instead shorten it to drive the payments up?

MMP

[jribe]

it's not generally looked upon well to get a "brand new" new car right before filing. Besides the fact that you can save thousands if you get one that 2-3 years old. I don't know where you income is- but 25k may seem to be a lot with a $470 payment. You could get a fully loaded accord ex that's three years old for under 15k (leather included) with a payment of about $285-300. I wouldn't put yourself in that much debt with a new car just to pass a means test.

And NO don't get a dog. There's too many poor unwanted dogs that get sent to the pound or put down because owners didn't really want one in the first place; or didn't think through ownership

Exactly-- i have been cutting back, and all my disposable income has been going to cc's.

As for the IRS standard of living, i havent made the comparison yet. the sched j i am using (see my other message about Check Over my sched j) has a lot of little categories that are probably implied in the broader IRS categories. Will take some work to check that over but that is a good question. A few of the IRS categories are to someone like me off the hook! I dont spend that much on clothes for half a year let alone one month (although i can change my habits).

unfortunately i only have fish! they need medicine and food only. should i get a dog. ha ha.

no but seriously, should I get a dog?

thanks so much i really need this help. have to decide on a car soon. I was going to get a Honda Accord Ex with a sticker price of 25K, and monthly payments of 470 i think. I have a pre-approved loan (last time i can say that!). Oh, which makes me think: is it possible to not get a 60 month loan and instead shorten it to drive the payments up?

MMP

[HHM]

What is the back ground here...if you really need all those things to get a negative DMI, what exactly is the financial problem here that requires a BK?

It's one thing to do 1 or 2 of those things if you are on the bubble, but to need to do all the insurance, new car, new cell phone etc., what is the issue. At some point it just doesn't work, not everyone can qualify for a chatper 7 no mater what they do, a chatper 13 is a good option because a chapter 13 is about control.

[OhioFiler]

i am under my state mean (CA, sacramento), however i am way off when i do sched j.

if i do a bunch of things 7-6 months prior to filing, is that real bad?

I can finance and buy a car, i can up my auto coverage plus the new car, i can take out life insurance, i can get a new cellphone plan, etc. I actually do need all this stuff but I dont want to be asked about it.

Will this all look bad? or even if it looks bad, will it matter? I realize the answer might depend but i am here on the forum to get some idea of what to do.

i really want a ch7

thanks,

mmp

Buying a new car before BK is fine. If the payment fits your post-bk budget then do so.

Often when one first looks at schedule J they don't realize how inclusive those categories really are. If you really look at your actual expenses you are probably fine without boosting expenses just to qualify.