Okay I am new to all this so please excuse the lack of knowledge. My husband worked for a company for many years making decent money. His company was then bought by another and his division got completely shut down. He has taken a considerable cut in pay at his new job. It will be several months before we can file for bankruptcy though because we have to wait on his average income to go down in order to qualify for chapter 7. My first question is this....will our income tax return of $5,000 be considered part of our 6 month average income? Should we be able to keep this tax refund? My second question is how far back do they go and look at transactions? We have ALWAYS paid our bills on time and had extra cash to play with. We went to Hawaii in May of last year and put some of our trip on a credit card. We had NO CLUE at this point what our future held though! We weren't just taking expensive vacations because we knew we would be filing bankruptcy. This was a very sudden change and we didn't have a clue about anything until the end of November. Another question I have is after you initially file the bankruptcy do you stop paying all the companies you filed on from then on out or do you continue paying them until it is final? Obviously if I could afford to do that I wouldn't be filing. If you have $600 extra at the end of the month and a $1,200 bill do you just keep the $600 during bankruptcy or do you send what you can? What about the months leading up to bankruptcy. What if you don't plan on filing for 3 more months but still can't pay your bills completely? Do you then send partial payments or nothing? I am so confused about some of this and have read different things online but I am so scared and unsure about this whole process. We have never ever been in a position like this and I am terrified! Thanks in advance for any help.
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Welcome aboard! Take a deep breath and relax, lots of good info. and people here. This is my 1st go round to but i have met with my attorney to get a plan together. Lookback period is 6 months to determine if abuse is involved, any major credit card purchases within 90 days of filing can be scrutinized, your tax return can be used by you to pay bills, medical, repairs, maintenance, necessities, or maybe eve pigeonholed into an exemption if your not filing for at least 6 months. At this point i wouldnt bother with any partial payments, i'm filing in approx 7 months, staying current for the next month to get a car loan and maybe a home loan (current home 100K underwater) not reaffirming debt of current home, after all ducks in a row payment on mortgages and our one credit card will stop. Get a good attorney and good luck. BTW this is all from memory from my meeting and info. here, so please double check everything. -
What does pigeonholed into an exemption mean? Thanks for yor post! I really am trying to relax a little about this, I just feel so bad about having to do this.Originally posted by kudumaned View PostComment
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Hi Mom
I was in the same situation as you last year at this time. We had no choice but to file and it sounds like the same for you so dont feel bad! You are doing what you have to do, nothing to feel bad about.
Our trustee asked others, not us for some reason, if they had made any large charges in the past 12 months during our 341 meeting. I believe that he only wanted to know if there would be any objections coming from their creditors. It all boils down to "did you make large purchases on your cc knowing that you would file soon". If you did not, don't worry about it. the creditor has to prove that you knew you could not pay it back, if they are successful in proving this you would be held responsible for that specific charge only. We went on vacation (thank god!) in July, and charged some of it, hubby lost his job in september, obviously we had no idea that was going to happen. Now if he had lost his job in sept, went on vacation in November and filed in December that would have been a different situation.
If you are sure you are going to file you should just stop paying the creditors, any money you give them is just throwing money away, it won't help your credit. There is no point, unless you are talking about a car or home that you want to keep or if you had a large charge, make payments for a couple months which will make it more difficult to prove that you made this charge knowing you could not pay it back.
Good luck and try not to stress out too much, easier said than done I know but believe it or not next year at this time you will be looking back and thinking, it wasn't that bad!!Comment
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My attorney called putting an asset into one of the exempt categories (homestead, etc.) pigeonholing it. Nothing wrong in doing this as long as enough time expires between the transaction and filing (6 months in my case). Just trying to do whats best for you and your family within the rules.Comment
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Once you are certain you'll be filing bankruptcy immediately stop paying all unsecured creditors. If you plan to keep your home and car(s) continue to pay on them.
Don't worry about the vacation to Hawaii.
If you provide more detailed information relating to your situation we can provide better feedback.Well, I did. Every one of 'em. Mostly I remember the last one. The wild finish. A guy standing on a station platform in the rain with a comical look in his face because his insides have been kicked out. -RickComment
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I agree with Ohiofiler. The vacation is far enough in the past that it will not be a red flag.Originally posted by OhioFiler View Post
You should stop paying your unsecured creditors if you know for sure you are going to file once your six month look back income reflects your husband's lower salary. This will give you money to pay your living expenses.You can't take a picture of this. It's already gone. ~~Nate, Six Feet UnderComment
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You guys are beyond helpful! I am starting to feel a little more at ease with this process. I just feel so guilty at times when I try to teach my children to always be responsible for their actions and then here I am about to file bankruptcy! I realize I took our income for granted. I just assumed it would always be there. If nothing else good comes out of this I learned a valuable lesson on saving and being prepared for the unexpected.Comment
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Mom2angels - The first thing you should do is stop feeling guilty over needing to file bankruptcy. Things happen in life that are unexpected and unfair. You are making a business decision for your family's welfare and future. If you realize and embrace this idea, you will find that the next steps fall into place and the anxiety lessens. You'll be okay. Keep smiling.11/09 - Ran out of money - 1/4/10 - Filed Chapter 7 (Pro-Se) - 2/16/10 - 341 Meeting -6/17/10 - Reaffirmation hearing (auto)
- DISCHARGED 7/6/10m CLOSED 7/26/10 
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Originally posted by mom2angels View Post
I think you are doing the responsible thing for your family by dealing with your financial crisis. It would be irrisponsible if you did not learn from your mistakes and move forward toward a more financially secure future.Comment
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Study the process, ask questions, and move forward in the manner in which helps your family the best.
Hold your head up high and move forward. Good luck.All information contained in this post is for informational and amusement purposes only.
Bankruptcy is a process, not an event.......Comment
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