Please help

[doomed]

I dont know where to start, really.

I've been reading over these forums and they've been really helpful. I guess I'm not sure I am ready for bankruptcy but I think the numbers don't lie. My home is in the process of being foreclosed on and the bank will get a default judgement probably somewhere in the range of $70k. My son got very deathly ill last year after we moved and my husbands new employer cancelled health benefits. He's 5. They saved his life, to the tune of over $60k. I used to have a good job that paid $80k / year and we lived stupidly. Now we make $40k / year and have about $30k in credit card debt that we can't pay on anymore. My stupid car I bought new in 2006, I pay $500/month for it and my husbands is $170/month. We stopped paying our mortgage to get health insurance (thus, foreclosure) and our health insurance is $700/month. As you can see, ends are not being met here . .

Right now, we fall under the "means" income, but over the course of the next several months, I will be receiving money that will be gifted to me. If counted as income, it would probably just barely put us over the limit for my state (which is really low) . . I take it the bankruptcy would take all of it? I was hoping to each month put it in my sons college fund. Would they see this and demand i stop making the contributions each month? Or maybe force us to do a Chapter 13? It wont nearly help us catch up on our bills, and our savings are gone

Thank you in advance..............

[mrskal]

Not sure if this answers your question, but just a thought I had, can the money be gifted to an account directly for your son? Not go through you? I think that a college fund is not touchable as an asset. It may depend on your state though. You can alway set up an appointment with an attorney, usually the consults are free. Good luck, you are in the right place to help you out.

[billycool]

somebody with more experience than me....

...will have to answer the technical question regarding the gifting and how to handle that. I would think that if you spent the money on ongoing expenses to make ends meet, you could just show it as income assistance from family (or wherever it's coming from), not have it pile up as an asset that could be seized and file Ch. 7 with a very good and experienced lawyer.

Given what you've written, there's no way I'd settle for a Ch. 13 in your shoes....

Good luck, especially with your son.

[billycool]

I believe that's correct.

529 monies that are funded by someone other than yourself, I think, are not monies that the trustees usually go after....? That sounds right, but I'm not sure. Most states have very high limits on how much can be placed into a 529.

Not sure if this answers your question, but just a thought I had, can the money be gifted to an account directly for your son? Not go through you? I think that a college fund is not touchable as an asset. It may depend on your state though. You can alway set up an appointment with an attorney, usually the consults are free. Good luck, you are in the right place to help you out.

[wonderingrov]

Another route to consider - if the gift money is to be used for your son's college, the person giving the money might be able to set up a living trust with the money designated for your son's education. That again keeps the money going directly to your son (as others have suggested), with the money being held in a trust until a time designated by the person setting up the living trust.

[doomed]

Thank you all, I appreciate the replies. The money is being held in an escrow account in my name. So I take it I wouldn't be able to transfer the money from there to his college account?

Also, when determining your annual salary for the wages test, is it before or after taxes?

[doomed]

Ugh, no that won't work..disregard.

[NewDawn]

Have you looked into any of your state's programs for health assistance for your child? In our state, Texas, you can get what's called CHIP (Children's Health Insurace Program) if you're at 300% of Federal poverty level for household size, I believe. So you very well might have him covered under such a program.

For adults, states vary widely on what kind of assistance for health care they have available. But definitely check this out. In our state, Texas, it's through the Health and Human Services Commission. Hopefully that can save you money in regards to health related costs.

Also, was the medical debt you incurred at a hospital? If it was at a non-profit hospital, they are obligated to provide a charity assistance (medical write-off or discounts) in exchange for their non-profit status, depending on your income level and documentation. There are usually time limits on applying for this assistance. My husband was diagnosed with cancer 3 months after our discharge. The hospital wrote off over $100,000 through their charity care program. Of course, we were low income at the time. There are also medical debt negotiators out there that will comb through you medical bills at hospitals.

[doomed]

NewDawn, thank you for the reply. I'm sorry to hear about your husband's cancer. I hope he is well today.

We didn't qualify for the state CHIPS program by a thousand dollars. They DO NOT take into account bills or anything like that. So we may have made a little too much, but our DMI is so far into the red its pitiful.

I just did an online calculator and even with the gifted money, we'd still fall into the median wage for our state and thus we can do a Chapter 7. How would it look, though, if I put the rest of the money I had stashed away to try and keep up with bills into Roth IRA's, before we do this?

[keepmine]

It's time you spoke with a bk lawyer.
Some states have a time period between IRA contributions and filing.
Most bk lawyers give free or lowcost initial consultations. Speak with a few and see what they suggets.