Depressed...I actually have been thinking the same thing. Attorneys make more money on the Ch 13 so they do not really have an incentive to keep you in a Ch 7. When I did the means test it showed about $200 negative but maybe I was doing something wrong. The man I met with really did not even look at anything but our income and said we would be Ch 13 but he could change it later (for a fee) to a Ch 7.
Benz...when you are talking about subtracting secured debt for cars, boats, homes etc....would a motorbike that is a secured debt be in that category? I am wondering because the attorney I met with said that we would have to turn it in to the finance company...not allowed to keep it in a Ch 13. We owe slightly more on it than it is worth but wouldn't it be in the same category as a boat?
Onthebrink...I am with you...if there is any way at all I can do this with settling that is my preference but probably a lofty goal. I am also worried about having to pay income tax on the forgiven debt on the 1099. I just found this info online:
Taxpayers may qualify for one of several exclusions that allow them to reduce taxable income from canceled debts. If the exclusions apply, they must file an IRS form 982 in addition to the 1099-C.
"Theoretically, you have income if you don't meet one of the exceptions," says Eric L. Green, a tax attorney with the Convicer & Percy law firm in Glastonbury, Conn.
The exclusions include debts discharged during bankruptcy and debts of consumers who are insolvent (meaning their liabilities exceed their assets) prior to the cancellation of debt. However, the exclusion applies only up to the amount by which consumers are insolvent. That means if $5,000 in debts were forgiven and liabilities exceeded assets by $2,000, then the $2,000 would be excluded as income. "The remaining $3,000 would be reported under other income," says H&R Block's Flores.
Benz...when you are talking about subtracting secured debt for cars, boats, homes etc....would a motorbike that is a secured debt be in that category? I am wondering because the attorney I met with said that we would have to turn it in to the finance company...not allowed to keep it in a Ch 13. We owe slightly more on it than it is worth but wouldn't it be in the same category as a boat?
Onthebrink...I am with you...if there is any way at all I can do this with settling that is my preference but probably a lofty goal. I am also worried about having to pay income tax on the forgiven debt on the 1099. I just found this info online:
Taxpayers may qualify for one of several exclusions that allow them to reduce taxable income from canceled debts. If the exclusions apply, they must file an IRS form 982 in addition to the 1099-C.
"Theoretically, you have income if you don't meet one of the exceptions," says Eric L. Green, a tax attorney with the Convicer & Percy law firm in Glastonbury, Conn.
The exclusions include debts discharged during bankruptcy and debts of consumers who are insolvent (meaning their liabilities exceed their assets) prior to the cancellation of debt. However, the exclusion applies only up to the amount by which consumers are insolvent. That means if $5,000 in debts were forgiven and liabilities exceeded assets by $2,000, then the $2,000 would be excluded as income. "The remaining $3,000 would be reported under other income," says H&R Block's Flores.
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