Having trouble keeping our heads above water.

[backtoschool]

With $8,800 a month in income, and a bunch of dependents that were not claimed on your income tax return, and $1,300 a month that can go into a Chapter 13 plan, you are going to have a difficult time being a candidate for chapter 7 in my opinion.

If your house payment is over the IRS allowed amount for your area, then that may be an issue with the trustee as well.

[Backlyn]

But your house is the problem. There are limits set forth that cannot be exceeded and a trustee has to abide by those. There is some wiggle room but here is the way I see it.

Chapter 13-You will keep the house and then have to afford the payments set forth by the trustee and these payment plans are normally for 60 months. You are then pretty much credit dead and still paying through the nose for your retention of address. There will be no credit cards in emergencies or holidays and you may eventually end up losing it all before you meet all the payments.

Chapter 7-You have to meet an income guideline to even qualify for this. Yes all debt will be discharged but if your home truly has 100K in equity, they may likely take it from you. There are caps on exemptions and my home has WAY less equity and value than yours and we take home a pile less a month now due to the economy and I still have to buy back my assets or they go to auction.

You better obtain the real value of your home and sit down with several attorneys and see what you best option is or you may get a rude awakening at your 341 hearing. Trust me its not pleasant. We were assured our home and vehicles would be safe and they are not.

I feel your pain with wanting to hold on to the home due to the school system. We are in the same boat and even after not paying our credit cards, the cost of living alone and our mortgage with a down size in income has made it hard. I have paid 19 years on my mortgage and have 9 left and I would like to see it through if I can.

[rusty95]

But your house is the problem. There are limits set forth that cannot be exceeded and a trustee has to abide by those. There is some wiggle room but here is the way I see it.

Chapter 13-You will keep the house and then have to afford the payments set forth by the trustee and these payment plans are normally for 60 months. You are then pretty much credit dead and still paying through the nose for your retention of address. There will be no credit cards in emergencies or holidays and you may eventually end up losing it all before you meet all the payments.

Chapter 7-You have to meet an income guideline to even qualify for this. Yes all debt will be discharged but if your home truly has 100K in equity, they may likely take it from you. There are caps on exemptions and my home has WAY less equity and value than yours and we take home a pile less a month now due to the economy and I still have to buy back my assets or they go to auction.

You better obtain the real value of your home and sit down with several attorneys and see what you best option is or you may get a rude awakening at your 341 hearing. Trust me its not pleasant. We were assured our home and vehicles would be safe and they are not.

I feel your pain with wanting to hold on to the home due to the school system. We are in the same boat and even after not paying our credit cards, the cost of living alone and our mortgage with a down size in income has made it hard. I have paid 19 years on my mortgage and have 9 left and I would like to see it through if I can.

If you read the previous posts you will have read I have 531000 in mortgages. Ithe house is valued at 575000 that dosen't leave 100000 in equity. And most mortgage companies do not finance a 100%

[rusty95]

With $8,800 a month in income, and a bunch of dependents that were not claimed on your income tax return, and $1,300 a month that can go into a Chapter 13 plan, you are going to have a difficult time being a candidate for chapter 7 in my opinion.

If your house payment is over the IRS allowed amount for your area, then that may be an issue with the trustee as well.

The dependents have nothing to do with anything. It is perfectly legal as long as you claim the right amount at the end of the year.

And if you read the previous posts the 1300 left over goes towards weekly expenses. You see you take the 1300 and divide it by 4 (weeks in a month), that comes out to 325 a week of which we buy gas and food and put money away for things like car insurance and water bill and what ever else comes up. I appreciate the help but please read all of my answers and posts. I went over all of this already.

So lets see my monthly bills are 7912 and we bring home 8800 that actually leaves 888.

[mgmadara]

If it was me I would stop paying the mortgages, find a cheaper place to live and file just to get out from under those mortgage payments. Your house is the problem and until you realize that, you won't get much relief.

[backtoschool]

The dependents have nothing to do with anything. It is perfectly legal as long as you claim the right amount at the end of the year.

And if you read the previous posts the 1300 left over goes towards weekly expenses. You see you take the 1300 and divide it by 4 (weeks in a month), that comes out to 325 a week of which we buy gas and food and put money away for things like car insurance and water bill and what ever else comes up. I appreciate the help but please read all of my answers and posts. I went over all of this already.

So lets see my monthly bills are 7912 and we bring home 8800 that actually leaves 888.

I am not talking about your tax return. I am talking about the what counts as a dependent in a bankruptcy expense schedule and means test. If you claim 11 dependents as part of your expenses on your bankruptcy petition then in most districts, those 11 dependents need to be exemptions on your 1040 tax return to be counded as dependents for bankruptcy purposes, not withholding purposes.

You seem quite defensive. I have read your posts and I am not sure you are understanding that there are predetermined amounts allowed for most expense categories when filing for chapter 7.

In any case, it only takes around $150 or so a month in disposable income to push you into a chapter 13.

[rusty95]

I am not talking about your tax return. I am talking about the what counts as a dependent in a bankruptcy expense schedule and means test. If you claim 11 dependents as part of your expenses on your bankruptcy petition then in most districts, those 11 dependents need to be exemptions on your 1040 tax return to be counded as dependents for bankruptcy purposes, not withholding purposes.

You seem quite defensive. I have read your posts and I am not sure you are understanding that there are predetermined amounts allowed for most expense categories when filing for chapter 7.

In any case, it only takes around $150 or so a month in disposable income to push you into a chapter 13.

Nobody is going to claim 11 dependants because they don't exist.
Do you know why people claim more dependants? They do it to bring home more money weekly. You can only do it if you have enough deductions on your tax returns to cover them.
Who is claiming them as an expense. You don't understand the whole concept of doing that.

I have done alot of reading and did the means test. And I am not being defensive.

[rusty95]

If it was me I would stop paying the mortgages, find a cheaper place to live and file just to get out from under those mortgage payments. Your house is the problem and until you realize that, you won't get much relief.

I had no problem paying my mortgage and still don't have a problem with it. The problem started when I ran my charge cards up and got into trouble because of that.

[backtoschool]

Nobody is going to claim 11 dependants because they don't exist.
Do you know why people claim more dependants? They do it to bring home more money weekly. You can only do it if you have enough deductions on your tax returns to cover them.
Who is claiming them as an expense. You don't understand the whole concept of doing that.

I have done alot of reading and did the means test. And I am not being defensive.

Good luck with your bankruptcy.

[newbie2]

Rusty, whatever you decide to do, please take at least this advice: Don't take any more out of your wifes retirement account.

That money is protected. Don't touch another dime of it.

[rusty95]

Rusty, whatever you decide to do, please take at least this advice: Don't take any more out of your wifes retirement account.

That money is protected. Don't touch another dime of it.

If you read it correctly it was a loan and will be paid back. I did not withdraw the money.

[newbie2]

I did read it correctly, thank you. Rusty, perhaps you may want to Google 401K loans and bankruptcy.

Good luck to you.

[OhioFiler]

Selling the house is out of the question. The school system where I live is one of the best in the state. My daughters education is very important to me. I paid more for the house because of it. I paid 489,000 for the house and it is probably worth about 575,000 to 600,000. At the peak houses similiar to mine where going for 700,000. If I didn't have the charge card bills I would have plenty of cash.

This statement is your problem. You can't file Chapter 7 if you will have plenty of cash once you stop paying your unsecured bills. If you have plenty of cash you are put into a Chapter 13 and that cash is used to pay those debts.

It also doesn't read like you will actually have plenty of cash monthly if you stop paying your credit card bills. You are borrowing from the IRS, your property taxes are increasing and you use credit to pay normal living expenses from time to time.

I think you need to look hard at your budget and find out where your income is really going. Your budgeted expenses must come very close to your income each month or you will be a C13 candidate.

I read where you must stay in a certain house because you must have your daughter educated in a certain school. These absolutes are purely based on emotion. Your daughter could be home schooled or enrolled in a private school and receive a better education. If you moved to a much less expensive home you would have the money to send your daughter to any school in the country (almost).

I'm not judging you. I'm simply asking you to think a little differently. I hope all goes well for you and your family.

[OhioFiler]

I had no problem paying my mortgage and still don't have a problem with it. The problem started when I ran my charge cards up and got into trouble because of that.

Okay, you've identified the problem.

The question I have for you is this: Once you can no longer run your credit cards up how will you pay for the things you need? There was a reason you ran the balances up on those cards. Usually, it's a case of living a lifestyle above one's means. Are you prepared to change your lifestyle post-bankruptcy?

Your claim it is legal to claim false exemptions is not completely true. If you owe the IRS too much come April 15 because of this, you will be penalized. While it may not be illegal you are still fined for it.

And one last point of advice, do as you please with it. Relax, read what others here offer you with an open mind and please stop writing in a style that conveys anger when responding to those who try to help you.

[LSUTiger32]

You are paying $4900 a month for mortgage which is 58% of your income, that is insane.

Bingo. Therein lies your problem. You cannot make it with almost 60% of your income going to the house, even with no credit card payments.