New here with some ???

[donnaeve]

I have been trying to read as much as I can here and I am learning alot but I am wondering what I need to be aware of before filing chapter 7??
For example, I plan on going to Nevada in November to see my brother and new nephew. Will the fact that I spend $800 - $1000 on plane and hotel be a problem? Also my husband will be getting a $5000 bonus next month $2000 will be set aside for attorney, $2000 will be used to catch up on mortgage and rest will be for the trip. Do I need to wait 6 months (I saw 6 months mentioned here somewhere) after this trip to file or ? I guess I am asking what I am allowed to do before filing since I have yet to see or hear that info? I have been to an attorney for a consultation but he didn't mention any of the before stuff, just the basics of a chapter 7.
Thanks!

[bigtim6656]

you should go back to the attorney and ask for sure. I would think the trip could be a issue, more a luxury then a need.

[donnaeve]

Thanks, so what kind of expenditures do they look at?

[ccsjoe]

Before you file you are allowed to live, affording the basics, maybe a couple extras here and there like moderate restaurants a movie, etc, but definitely not spending 1K or more on a trip that will most likely be deemed a luxury. Not only that, it could cause the trustee to carefully dive into your finances rather than perform a cursory review. If you think something may look excessive, then it probably will be. Put it this way, if you were reviewing someone who filed BK recently, would you object to what appears to be cost-of-living expenses or a trip or other major purchase right before the filing?

[tcreegan]

bonus = income

Hi donnaeve,

The 5K bonus is counted as income, can you still pass the means test?

6 months is what gets averaged as your income on the means test.

Trustees look back a variable amount of time. But a 5K bonus w/in a month and they will want to know where the $$ went.

Why pay 2K on the mortgage if you are declaring BK? If you know you are filing a BK, stop paying on all debt immediately. Use the $$ for your new life post-BK

(exception: if you are going to hang on to the property, keep current on secured debt. But....seek impartial financial advice on whether keeping the property makes sense...it usually doesn't)

No idea what a trustee would think of the trip, I imagine it would be highly variable. If you are going to Nevada, stop off in Vegas and get the odds.... : )

My 2 cents worth, probably what it is worth....

Tom in Colo

[donnaeve]

Thank you both for your replies and the 2 cents! The 5K might be moot because it doesn't like he will get that much after all (depends on sales which weren't that great). We are current with the first mortgage (was modified in 2009) but I have not paid the second in 14 months. We received a 1099-c for it and a letter from a collection agency all in the same week. So our main thing is how to hold onto the house? The bk seemed like the best option to avoid a judgement since we had accumulated 28k in cc debt trying to keep up with the mortgage. We have 4 children, which is why we do pass the means test and why we do want to hold onto our 5 br house. (Although I'm really trying to get my stubborn hubby to move someplace cheaper than New York)! Btw the house is valued around $280k(?), 1st mortgage balance is
$247k and 2nd mortgage is $81k so lien stripping is out for us too. I'm not sure that bk is right for us but I don't know what else to do!