trying 7 [having issues, need help by 03/26, friday...please]

[mothra]

[first post]

sorry we all had to meet up this way, but hopefully things are moving forward for everyone.
i'll apologize first off for punctuation and i'll try my best on spelling.
here i go, a little background on the past 8-10 months:

october of 09 we got hit hard on credit card [unsecured] interest rates from around 7% to a whopping 17-22% over 5 differ cards.

i contacted an atty that advised me 7 would be the way to go. now a few months later the atty said we are in the positive on our budget and may have to do a 13.

i have a meeting the atty on friday [3/26] and wondering if anyone could offer some guidance...i'm really hoping for a 7, just getting rid of the cc debt...any help would be appreciated...also i got $10,000.00 from father 2 years ago and planned on starting to pay him back once this was behind me/us, would that count as part of my budget?

myself & wife [no children], living close to cleveland [oh]
monthly bring home, after taxes 3,800.00 [total]
5 unsecured cc = 57,000 [stopped paying 10/2009]
retained 11/2009
filing joint [trying]

house 635 [keeping]
car 270 [keeping]
car 290 [keeping]
heat/gas 240
cable/phone/www 145
water 80
electric 70
cell ph 80
home repairs 66
food 537
cloths 142
laundry 40
medical 300
rx 50
gas [car/transport] 300
recreation 100
auto ins 100
city tax 60
= 3,505

[[need help with following, gawd i wish i kept receipts]]

cosmetics ?
hygiene?
home office ?
hair cuts ?
pet [1 dog] ?
postage ?
gifts ?

[[also]] i give my elderly mother $ [as much as i can] to help with her living expenses [she lives on her own]
[[and]] i am trying to pay back father on a 10,000 loan

thank you, we will get through this [all of us]

[DaisysMom]

What is your gross income? That is what they will look at in determining if you qualify for Chap. 7.

In Ohio...the median income is: One person....$42,458 and 2 persons.....52,922.

After they get past that, they also look at what assets you have. Such as equity in a house, car, etc. There are exemptions that can help you save those assets, but they have limits. Such as your home....for principal residence, $20,200; for one automobile, $3225; for jewelry, $1350; for tools of trade $2025; and for the "wild card" $1075.

If instance....take your home and what it is worth....subtract what you owe and then subtract the exemption amount of $20,200. Whatever value is left can be filed against by a creditor. If the $20,200 exemption + the mortgage amount is more than the equity..then your house is safe.

If it's not, and you still have equity after subtracting those amounts...then to save your house, you would have to look at Chapter 13.

I am pretty sure that is correct...however I am not an attorney and I am just going by what I have read and researched on here. The best advice would be to talk to your attorney and have him explain it all to you.

Good luck and let us know how it turns out.

DM

[mothra]

thanks "daisy",
i will keep updating as things unfold

[mtbc]

The money you give your mother may be a problem. I don't know about preferential insider gifts but question 7 of Form 7 asks about them so I would guess that there's a possibility that the trustee may try to avoid (i.e. reclaim from the recipient) substantial gifts to family members made within maybe a year before filing. It's worth checking, just in case. There are arguments that can be made about dependents, but you'd want to get your ducks in a row about being able to make them before assuming that they'll fly.

The same is true for this loan from your father -- you don't want to have paid him a whole lot in the year before filing, or the trustee may try to avoid that too -- see question 3c -- but luckily it sounds like you haven't been paying him. I don't know if you signed a promissory note or what, but also be warned that long-term below-market-interest loans can attract IRS attention who like to extract some tax for the gift of the low-interest-ness of the loan, which, seeing as you'll probably be discharged from it anyway, may affect what interest rate you guys what to consider the loan being at when you quote its present value on your schedules.

Assuming it's an unsecured loan, I don't see how you get to include it as an expense, though you are of course still permitted to repay it if you wish, the bankruptcy is more about preventing your father from trying to collect. (!)

[SMinGA]

From your post I'll assume non-exempt assets are not an issue since the only thing leading you to a 13 is that your attorney thinks you have room in your budget for a plan payment.

I don't believe you'll be able to claim the allowance to your mother as an expense. You will certainly not be able to claim an expense for making a payment to your father. That debt will be discharged along with the others, but its up to you if you want to try and pay him back after the BK is over and done.

But including a reasonable amount for personal care (hair cuts, toiletry items for the home, etc.) should be an allowed 'expense' as well as something reasonable for 'gifts'. And pet supplies could go in as a misc. expense. I don't think that will 'eat up' the $295 overage you show though.

As to your medical of $300, is that supported by receipts/paper trail? If not the amount may be questioned. I believe the IRS allotment is $60 per person per month. Actual expenses over the IRS amount can pass if you can prove them. Not if they are purely theoretical though.

Does your house payment include taxes & insurance? If not, then you would be able to include 1/12 of your annual bill in the monthly budget.

[mothra]

ty!
mtbc & sminga

"the only thing leading you to a 13 is that your attorney thinks you have room in your budget for a plan payment."
...exactly

"And pet supplies could go in as a misc. expense. I don't think that will 'eat up' the $295 overage you show though."
...fingers crossed, hoping the atty can pull a rabbit from the hat

"As to your medical of $300, is that supported by receipts/paper trail?"
...actually, yes [maybe a little more]

"Does your house payment include taxes & insurance?"
...yes

[mothra]

i [we] have our meeting friday [3/26]...hoping to pass on some info later that afternoon...thank you all

[pcn]

Mothra, Here's some example amounts of what I used for a family of 3 in AL. I don't see charitable contributions on your list - I think up to 15% is acceptable if that is what you actually contribute. That could include church, charities, etc. I think someone above may have referenced your gross income and that the gross income would determine your qualification. While it is a factor, it is not the determining factor. Many here have successfully filed with above median incomes (search can find several easily).

Life Insurance 81.00
Auto Insurance 105.00
Electricity 265.00
gasoline 400.00
Dish 60.00
Phone - CenturyTel 80.00
Cell - AT&T 80.00
water 80.00
natural gas 70.00
Food 180x 4 720.00
Work Lunches 60.00
School lunchs 60.00
School Extended Day 4 x$5/wk = $80/m 80.00
Church/charitable 4 x $100 400.00
Cat 40.00
pest control spray 50.00
Clothing(clothes +make up, etc) 80 +20 150.00
Laundry/Dry Cleaning 50.00
medical (co pays+prescriptions+dentist) 140.00
Hair Cuts 102.00
Home Maintenance 60.00
Rec/clubs/newspapers/Ent 150.00
Car Tags 17.68
health club/gym fees 60.00
children's activities 30.00

[keepmine]

Ask your lawyer about the support checks to Mom. It may be OK under this section of the code.

http://doney.net/bkcode/11usc0707.htm

(II) In addition, the debtor's monthly expenses may include, if applicable, the continuation of actual expenses paid by the debtor that are reasonable and necessary for care and support of an elderly, chronically ill, or disabled household member or member of the debtor's immediate family (including parents, grandparents, siblings, children, and grandchildren of the debtor, the dependents of the debtor, and the spouse of the debtor in a joint case who is not a dependent) and who is unable to pay for such reasonable and necessary expenses.

Also, do you and your spouse have long and shortterm disability policies?
From 707 as well.

ii)

(I) The debtor's monthly expenses shall be the debtor's applicable monthly expense amounts specified under the National Standards and Local Standards, and the debtor's actual monthly expenses for the categories specified as Other Necessary Expenses issued by the Internal Revenue Service for the area in which the debtor resides, as in effect on the date of the order for relief, for the debtor, the dependents of the debtor, and the spouse of the debtor in a joint case, if the spouse is not otherwise a dependent. Such expenses shall include reasonably necessary health insurance, disability insurance, and health savings account expenses for the debtor, the spouse of the debtor, or the dependents of the debtor


Don't start repying Dad until your bk is discharged and closed. The code does allow you to repay anyone you please post bk.

[mothra]

much thanks and gratitude [PCN & KEEPMINE]

i honestly forgot about charity and the above post seems to have a lot of useful info!

what a unbelievable ride the past 12-16 months [hell 2 years] have been.
while i have your attention, outside of our credit card fiasco during the summer of 2008 my wife had been suffering from a weeklong severe migraine.

long story short, family dr cracked her neck, tore an artery in her neck causing a blood clot causing a stroke...yes it's true, within a couple hours her life changed...she has gotten "better"...

but while that nightmare was going on specialists found a tumor on her brainstem [that is probably the cause of the migraines]...we don't know if it is dangerous/cancer and never may...

because her right side of her throat is paralyzed and if a surgeon opens her up to do a biopsy it would cause damage to nerves that still function the good side...

sorry, that's the best i can describe that start of our ride...

then on top of that [all in 2008] we had to put her mother in assisted living [lung failure], and she lost her brother and sister within one month...

i can not believe this is even happening, i feel so numb...well anyway thank you all for the useful information....I JUST HAD TO VENT A LITTLE!

[mothra]

today is the meeting...

[music12]

someone on this forum explained once that giving money to elderly parents is an allowed expense.

however, paying them back on a loan isn't. the loan is discharged in the bk. it's your choice to pay it back later if you want, but you can't include it as an allowed expense.

i just got a 6-month supply of cream/toner/moisturizer just for my face, $130, and i use very sparingly - probably it's a 3-month for most women. add to that shampoo/conditioners, easily another $50. ok, now gotta go! and, ask your wife, she just might know these things...