In AZ ?'s about CH 7 but over the median

[waldo05]

Hello everyone,
I have been reading all of the posts here and I have to say it has been a great resource in considering filing for BK. I want to give you a little back ground about our situation and then have a few questions I haven't found answers to so far

My wife and I have a Gross monthly income of just under 7500/mo and a Net of about 5400/mo.

CC debt 90K (min payments of 1500.00mo which are current to date)
Mortgage 1400.00 (are currently on the last month of our Home Afforadability trial period)
Utilities-375/mo
HOA fees- 50/mo
Food/clothing/ect 1152 (National Standard deduction)
gas/car ins/tabs/maint- 510/mo
Car payment 356/mo (wifes car that has 2.5 years left and is current and would like to keep)
-I have a car that my parents "sold" me as (my other one died) for 6000.00 but I only pay them when I can until it is paid off.

Childcare 600.00/mo
Cell phone 110/month

NOT ON AZ MEANS TEST
Wifes Student loans-445/mo (done in 3 years)
My student loans -580 month (forberance is over in June)

Questions
1. With our expenses on the means test it comes out to about 4600.00/mo We do not start child care until Feb as we just finished up the adoption process. This is a process we started almost 2 years ago and was finalized on Dec 10th. This accounts for about 25K of our credit card debt with the last big charge coming in Dec (9000.00). When we started this process, our parents planned on helping with most of the costs, but with the recent problems in the economy, they were not able to help (thus having to put the costs on a CC). It says we have about 600.00 of disposable income, but that doesn't include the almost 1000.00 in student loans (and mine start up again in June). The total student loans we have out are just over 120,000 and I was wondering if student loans are considered a secured or unsecured debt (because we MUST pay them and from my understanding can't be put into a BK filing) and if I can use this debt to be considered for a Ch 7?

2. I am living check to check with my bank account, but my wife has about 6k in her account that we were going to use toward the costs of our child. In az you are only allowed 300.00 combined in a ck account but can have 6 months of food/gas ect on hand. Should we pre pay daycare and get 6 months worth of gas cards to bring down that amount?

3. How long should we wait until we file? Our last big line item that was charged was the final payment on the adoption, but will occure some atty fees in Feb that will be around 1000.00.

4. How would I approach my car situation with my agreement with my parents? The Truck is worth about 6K, and the exemption is 5K in AZ.

I have been playing the "minimum" payment game with my CC debt and I have (until now) been able to keep up, but with interest rates increasing and min payments going up, I need to make a decision to better my future.

I have a list of a few laywers I am going to contact, but any advice on my situation (or good BK laywers in the Phoenix area) would be greatly appreciated....

Sorry for the long post, but wanted to prevent some clarifying questions that may come up

Thanks in advance!!!!

[keepmine]

First of all, don't prepay anything unless you have a history of doing it.
Secondly, don't be in a rush to file with $10K in recent charges. Try and make minimums on those cards you used for the large charge for a few months and then let 'em go. Let any other go now and use those minimu payments for hh expenses and legal fees. Try and wait 6 months or better before you file. Use that time to spend down excess savings. Also, if you can't support yourself without resorting to cc's you have a problem bk can't fix.
What does the quotation marks around "sold" mean? This is important. If they actually transfered title to you and haven't perfected their lein that car can get snatched by the trustee.
Others will be along to address the student loan questions.
All in all, you got some timimg issues to work out. Don't rush to file.

[hurtininaz]

You get to double the car exemption when you are married. You can have a vehicle up to $10,000 together. Does your wife's car have equity?

[waldo05]

My car broke down and I needed transportation so my mom allowed me to bring one of her cars to AZ (title is now in my name and is free and clear) and it was worth 6k and I am going to pay her for it, but there is no time table for repayment. I will not be able to pay anything for quite a few months.

My wife has about 11,000 left on the loan (just under 3 years left) and kelly blue book is for sale to a private party is about 13,900 so about 3000.00 in equity.

We don't have a history of doing it because she is only 7 weeks old and will just be starting daycare.

" Let any other go now and use those minimu payments for hh expenses and legal fees."

Will this been seen as "preferential payments" to the CC that has our adoption expense if we continue to pay that one?

Thanks for the reply

[keepmine]

That's why you wait over 90 days to file. Inside 90 days is where a preference issue kicks in.

[waldo05]

Thanks for the info wasn't aware of when it would be considered preferential. I have read a couple of different opinions on how long you should wait 90 and 180 days. So, if I understand you correctly, I would stop paying other cards soon and then stop paying on the one with the big charges 90days before we plan on filing. Thank you so for your insight, this fourm has been a great help!

[Scott50]

your student loan payments can't be used on the means test for a CH7

[waldo05]

There is a portion on the means test at the end that ask to state all unsecured debt to find the Threshold debt payment amount (25% of debt).



It is my understanding that if 25% of your unsecured debt is greater than your "disposable income" each month times 60 (number of months in a ch 13) you would pass the means test. 25% of our unsecured debt is greater than the 60 months of disposable income (if we include our student loans). Anyone familar with this portion of the means test or have used the part to pass it?

Thanks....