I have finally thrown in the towel

[1969classic]

Hi Everyone - I have decided to file BK 7. I have signed with an attorney who has adviced me to wait until December-ish and then move forward with the filing. I am $6,000 under median income with current salary but received a $18,500 retention bonus at the end of June which put me way over... so his advice was to wait until December. ($18,500 retention was taxed at 45% and the remaining almost $10K went to pay cc debt/get caught up) but I am back in the same situation again 2 months later. I will just start being late on payments this month, he couldn't advice me to stop making payments to credit cards but he did tell me I would be throwing my money away if I continue to keep up and then file BK in December anyway. I owe $66K in unsecured credit card debt. I just can't keep up with the payments any longer. I have tried to talk with them regarding hardship but they wouldn't give me any kind of deal because I have always remained current. I have a 650 credit score right now but hangin on for dear life at this point to make ends meet. I stopped using all cards last month. I am single mom of one, divorced 4 years ago and been basically living on credit cards for some time now, using them for everything my salary doesn't cover. I bought a mobile home, paid cash at time of divorce, so all I have is space rent, no mortgage, I financed my car in 2007 = remaining balance of $9,000K ` I am current on my rent, house taxes, as well as my car and would like to keep both. I have just heard horror stories about cc's judgements and leins against property as well as garnishment of wages and I just need to do something to wipe this slate of mine clean and start living within my means and actually have a savings account to fall back on instead of credit cards.

I did ask attorney about my tax return... he didn't seem to think it would be taken in the bk because of the "timing" of my filing but I have read on other blogs that this will probably happen, does anyone know if my tax return for 2009 will be taken in this BK? I usually get about $4,000 back normally and I am sure I will be getting some of the taxed Retention Bonus refunded as well since I claim head of household with one child. This is least of my concerns at this point but I thought I would start somewhere and see if any of you could give me some advice. Thanks so much!

[wantout]

I threw in the towel along time ago, just took awhile for it to hit the ground, I threw to high in the air....

[shabam]

I decided to throw in the towel when I finally realized I was simply pissing in the wind.

[1969classic]

So nice to know that I am not alone.... I feel so much better already

[wantout]

So nice to know that I am not alone.... I feel so much better already

This country is bankrupt, most just dont know it yet....I am getting in early, to beat the rush.

[1969classic]

Awww. To Wantout, LOVE YOUR MESSAGE!!!

[lrprn]

Welcome to BK Forum - glad you found us!

Hi Everyone - I have decided to file BK 7. I have signed with an attorney who has adviced me to wait until December-ish and then move forward with the filing. I am $6,000 under median income with current salary but received a $18,500 retention bonus at the end of June which put me way over... so his advice was to wait until December.

If as you said, your bonus came at the end of June, then if you want to exclude it from your gross income calculations for the Means Test and Schedules, then you will have to wait to file until at least January 4, 2010.

Filing any time in December makes the six full calendar month look-back for income be June 1-November 30 - this will include the bonus. If you file anytime in January, the six-month lookback will then be July 1-December 31, which will exclude your bonus.

Check with your lawyer again to make sure he is aware the bonus came in June. He likely miscalculated the six months lookback period.

I did ask attorney about my tax return... he didn't seem to think it would be taken in the bk because of the "timing" of my filing but I have read on other blogs that this will probably happen, does anyone know if my tax return for 2009 will be taken in this BK?

Whether it will all be taken, part of it will be taken, or none of it will be taken varies depending on when you file during the year and your trustee's customs around tax refunds in Ch 7 cases.

I usually get about $4,000 back normally and I am sure I will be getting some of the taxed Retention Bonus refunded as well since I claim head of household with one child.

It's time to stop using Uncle Sam as an interest-free savings account. Instead adjust your withholdings so you won't get $4K back for this year. It's not too late. You can reduce that amount by quite a bit before the end of the year.

Here's links to an IRS withholdings calculator - http://www.irs.gov/individuals/artic...=96196,00.html (online) and http://www.irs.gov/pub/irs-pdf/p919.pdf (paper). Figure out what you need to do to get the lowest amount possible back for 2009, then change your withholdings accordingly. You'll be surprised at how much you can reduce the $4K with just four months left in the year.

[mike59]

This country is bankrupt, most just dont know it yet....I am getting in early, to beat the rush.

That is something I believe.

[wantout]

Awww. To Wantout, LOVE YOUR MESSAGE!!!

Thanks, I try...

[tkharvey]

Welcome! You are definitely not alone. Many of this (including myself) never thought we'd be in this position. We are in unprecidented times, that's for sure. When we first had our meeting with our attorney back in January, we were so embarrassed/ashamed. Not anymore. We are doing what we need to do to get back on track and take care of our families. There's probably more people in our situation that we realize. Good luck with everything. The support on here helps.

[hereforinfo]

I was going to advise you to adjust your withholdings, but lrprn beat me to it. Do it asap so that you will net more money from your paychecks and have less tax taken out of your bonus. Not only will this increase your monthly cash flow, but it won't leave you with a large chunk of cash for the trustee to take. Make sure you include the bonus in your income when you use the calculator posted above. You can increase your net by hundreds or more each month for the rest of this year. But don't forget to change it again in January, since you'll then need to figure it on the full year.

[1969classic]

Ok, the withholdings adjustment sounds like very good advice, but won't that hurt me in the BK ultimately with more cash coming in?

[lrprn]

Ok, the withholdings adjustment sounds like very good advice, but won't that hurt me in the BK ultimately with more cash coming in?

Having more cash in your pocket for the next few months means you can purchase a few essential things you've been putting off - medical and dental care, home repair, clothes and shoes for the family, fix the cars.....the acceptable list of what to do with any extra money before filng is endless!

All you have to do is make sure that you can protect the cash that you do have left with your state exemptions when you file. Your lawyer can help you figure all this out.

[karoty]

I was going to advise you to adjust your withholdings, but lrprn beat me to it.
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[justplaintired]

It's time to stop using Uncle Sam as an interest-free savings account. Instead adjust your withholdings so you won't get $4K back for this year. It's not too late. You can reduce that amount by quite a bit before the end of the year.

Here's links to an IRS withholdings calculator - http://www.irs.gov/individuals/artic...=96196,00.html (online) and http://www.irs.gov/pub/irs-pdf/p919.pdf (paper). Figure out what you need to do to get the lowest amount possible back for 2009, then change your withholdings accordingly. You'll be surprised at how much you can reduce the $4K with just four months left in the year.

I totally agree with this. My dh and I had a wise tax man tell us one time this exact thing. So we don't have much held out of our paychecks, we use our money, why give the governement an interest free loan.