Between a rock and a hard place

[onthebrink]

I have been unemployed for 5 months and believe that I qualify for Chapter 7. However, I have a small consulting project coming up in a few weeks for which I will receive a good income (about $20K) for 5 to 6 weeks of work. My concern is that this income might disqualify me from filing for Ch. 7.

Moreover, there is no guarantee that I will be able to extend this project or get another one after this project is completed, although that possibility does exist.

I am going to try to start a consulting practice but can't predict if I will be able to do so successfully. I feel like I am between a rock and a hard place. On the one hand I may not be able to qualify for a Ch 7 because I might not be able to pass the means test and, on the other, I may not be able to qualify for Ch 13 because I don't have a regular income. I am deeply in debt and have come to the conclusion that filing BK is the right thing to do to get myself out of this mess. My preference is to file for a Ch. 7 because I don't want to have to pay the creditors more than I have to if my business is successful. What good is filing if every dime I make has to go to the creditors anyway?

I am meeting with a BK attorney next week to get advice. Once I complete the project, I am considering holding off on billing the company until after I file and have the 341 meeting.

Would really appreciate hearing others experience/advice.

Thanks

[Goldfish]

to on the brink

Hi, on the brink,
Just a couple of thoughts,

First, you need to work through the actual numbers. Will your income put you over the state median? If not, you are eligible for Ch7.
But then you need to do income less expense. I'd told that for something like $166 or $200 a month expendable income, one will be pushed into Ch13. [Which I don't want wither.]

I don't know about pushing off billing. I'm not that familiar with the forms. However, I suspect there is a accounts receivable section; which you will have to abide by.

(I don't know any of this helps; I'm just learning.]


Best, gf

[mtbc]

Yeah, accounts receivable is Schedule B line 16. We had over $70k of stuff there, though I don't think the trustee actually noticed!

[onthebrink]

Thank you both for the input.

mtbc, did they use the $70K accounts receivable to determine if you passed the means test?

[mtbc]

Form 22A did include as income $4,000 in payments in the six calendar months before I filed, that the debtor had made to bring their balance down to what I listed, but when I filed they'd become pretty much insolvent themselves and stopped paying other creditors too, so that $70k outstanding balance became pretty much irrelevant for form 6I.

[mtbc]

I should add, my form 7 included contact details of where to find that creditor's accounts, etc., and the trustee abandoned interest in the whole sum.