Do I have to run out of cash before oging Chapter 7?

[swampwiz]

I still have about $30K in the stock market, which will last about another 6-9 months if I don't get any income or rise in the market. I have a homesite worth $40K or so, which for other legal reasons I must have taken from me in BK (if it would NOT be taken from me in BK, I would owe an extra $92K to the state of Louisiana), so I can't sell that to live on. The unsecured debt is about $120K now (i.e., $50K under water.)

Should I wait until I run out of cash, or can I just throw in the towel now? Perhaps by doing it now, the judge will see that I am not trying to hide anything and really just want to move on in my life?

[frogger]

30K in the stock market, and homeless. Just throw in the towel now and move on...

[backtoschool]

Your 30k in the stock market will most likely not all be covered by exemptions and will be taken by the trustee.

[swampwiz]

Your 30k in the stock market will most likely not all be covered by exemptions and will be taken by the trustee.

I have no problem with that. I understand that it is deemable. I was wondering if the judge would tell me to wait until I was close to zero before filing.

[backtoschool]

I have no problem with that. I understand that it is deemable. I was wondering if the judge would tell me to wait until I was close to zero before filing.

No, you do not have to be at zero before filing. It's all a matter of how much money you have to pay your monthly expenses. If you have about $150 a month left to go to your credit cards after all allowable living expenses are figured in, then you will be put into a chapter 13. If you have under $150 a month or so for allowable living expenses then you can file chapter 7 with assets, but the non-exempt assets will be taken by the trustee to pay off the creditors.

Note: You mentioned a 401k as what you are going to live off of. Make sure that all deposits into that 401k were direct roll overs without the money hitting your personal bank account first, or the trustee might try to go for some of that money as well.

[swampwiz]

I have about $2400/mo to go towards my total debt, and I've been averaging $800/mo gains in the stock market. Rent has been about $750/mo, and since I don't know to cook, I eat out a lot (at neighborhood restaurants, not fancy places), so I spend about $600/mo on that. I've been unemployed for 18 months trying to find comparable work in my field. If I go Chapter 7, then I can start anew and live off of my 401K, or get crap job making $8/hr.

[backtoschool]

I have about $2400/mo to go towards my total debt, and I've been averaging $800/mo gains in the stock market. Rent has been about $750/mo, and since I don't know to cook, I eat out a lot (at neighborhood restaurants, not fancy places), so I spend about $600/mo on that. I've been unemployed for 18 months trying to find comparable work in my field. If I go Chapter 7, then I can start anew and live off of my 401K, or get crap job making $8/hr.

If you look up the IRS budget guidelines for the state you are filing in, then you will see what are the allowable expense amounts for each category, or you can fill out an online means test.

For example $600/month will not be allowable for food expenses for a single person. They will only allow you around 300-400 a month. Rent is fine. What are your transportation, insurance, health care expenses, etc.?

It is best to look at the IRS guidelines or even better to do the online means test. There are many links to that on this board, just do a search for "online means test".

[swampwiz]

I'm just saying that for 2009, I've been spending about $600/mo on food, maybe $200 on entertainment and other things, and everything else going to car insurance, gas, rent and debt service. This would explain my current "burn rate". I may have bought a something by check or credit card here or there like a new hard drive, or something like $50 that would go toward my hobbies, etc., but not much. I have been keeping my spending to just about as low as I could without depriving myself as I did not want to burn through my stock market investment. I think if the buying of replacement items are not counted, that my spending habits since Apr 2007 have been quite low - on the order of a Catholic priest that doesn't cook, and eats out at neighborhood restaurants once a day. And before then, it wasn't a whole lot either, as all the spending for durable items was for replacing items that I had lost in Katrina, that was supposed to be put on a loan from the SBA, and of course, $40K for the homesite. I had about $3K in car repairs and maintenance over the last year, paid for by credit card. And of course, I've had a bunch of finance charges on all these cards, although except at the very end, most of the cards were at 0%, 3%, 6%, etc., but sometimes with 3% transfer fees, etc.

I still think that the Dow is going to quickly get back to about 11500, at which time I was going to get out of the market.