Will Finding Work Disqualify Me For Chapter 7?

[Dinero]

I would appreciate some advice from some of the more experienced members with my particular situation.

First, I was fighting filing for bankruptcy because of how badly it would damage my credit report, but then as one of the members here pointed out, that my credit report is probably already damaged, so I am thinking that it might be only pride that is keeping me admitting the dismal state of my current finances and perhaps I should file BK CH 7.

I have been out of work for 12 months in this prolonged recession which is what got me in this bind to begin with.

I was thinking that since I could not afford an attorney, I would tackle the problem myself and file per se after reading the NOLO book.

However, the lawsuit that was served to me this Saturday spurred me to do this as soon as possible, but things are getting a little complicated.

The first question I have is how soon is it humanly possible to file BK CH 7 Per Se? I know you need to take some credit counseling before you file so is that something that can be done in one day?

The second question is suppose that suddenly recruiters are calling me about jobs opening and I even went on an interview today and have another interview set for tomorrow. So if I get one of these jobs would I still qualify for bankruptcy?

For the last 12 months I had to eke out a life on just under $3,400 per month, but once I start working, I could be earning that much in a week or more if there is overtime.

I spoke with an attorney today and he said the courts look at the last 6 months income. All of my debt is unsecured and I owe about $20,000. I rent an apartment and lease a fairly new car. No boats or planes or luxury items.

So what do you guys think? Would I still qualify for Ch 7 if I suddenly get a high-paying job again? The attorney also said I should stop paying on my credit cards if I am going to file bankruptcy.

The attorney also said he could get it filed within 2 to 4 weeks, but he wanted too much money which I don't have yet.

I am thinking that if I suddenly need to file quickly to still slide under the wire and qualify that maybe I should forget about going the per se route and hire an attorney, but they want about two grand which I don't have yet. I will probably have money soon enough once I start working again, but then won't that disqualify me?

Or maybe I should forget about filing BK and look again at trying to settle with my creditors since I would be able to make the lump sum payments once I am earning the big bucks again.

Your objective advice would be greatly appreciated at this time as I am too close to the problem and feel the stress of the time constraints with the lawsuit hanging over me for an extra dramatic push.

[free2breathe]

To your first question: The first question I have is how soon is it humanly possible to file BK CH 7 Per Se? I know you need to take some credit counseling before you file so is that something that can be done in one day?You can take the course online for pre-filing. Go here to find one approved in your state. http://www.justice.gov/ust/eo/bapcpa...e_approved.htm Check them over, some are even free. Once you get the certificate (usually via email within a few hours or couple days at most) you can file your petition.

Question #2:The second question is suppose that suddenly recruiters are calling me about jobs opening and I even went on an interview today and have another interview set for tomorrow. So if I get one of these jobs would I still qualify for bankruptcy?That depends on the income. Check here for the median income for your state. You'd have to be below that to qualify for Chapter 7 without having to take the means test. http://www.justice.gov/ust/eo/bapcpa...come_table.htm

The six month look back is what they look at to see if you qualify for Chapter 7. However, you do get asked if anything has changed since you filed when you go to the 341. That is where you would have to tell them you had a new job. They would then ask what the new income is.

You need to sit down and figure out how long it would take you to pay your creditors if your income increases to the point where you can actually make a dent in them. Or, like you said, you could talk to them about settling if you are suddenly in a position to pay some lump sums. Keep in mind that any settlement that allows you to pay less than the original debt then puts you in a position to have to pay taxes on the difference. The creditors will issue a 1099 at the end of the year dinging you for the difference that they write off in order to settle for the lesser amount.

For us, filing pro se was our best choice. We own both of our cars outright, lease an apartment, and have very little else in the way of assets.

Good luck on your decision. I hope you find enough info here on these forums to help you make an informed decision that you feel comfortable with.

[DebtEnder]

Question what is scaring you from just waiting out the judgments until you have an income stream? Your issue is not your debt, but your lack of income, or so it appears. I understand lawsuits are scary but don't let threats that can do you no real harm drive you to pull the BK trigger before needed. Of course I can't even begin to tell you not to file, but just telling you to clear your head. Lawsuits do take some time. Read the collection part of this forum and learn a few things about how you can protect yourself during collection/lawsuit actions.

[tcreegan]

Hi dinero,

just under $3,400 per month, but once I start working, I could be earning that much in a week or more if there is overtime.

Your current monthly is close enough to TX median that you would easily qualify for a Ch 7, but if you start making 4X that with a new job you have priced yourself out of the Ch 7 market in a couple weeks. With the new job, settling debt might be your best option; you or you lawyer negotiate directly w/ the cc lender (and find someone in the cc company who actually has the authority to settle a loan) See what you can do, worst case they say No

I know you need to take some credit counseling before you file so is that something that can be done in one day?

The class is usually a couple hours, easily done. Follow free2breathes link to get a list of providers (thanks f2b!)

the lawsuit that was served to me this Saturday spurred me to do this as soon as possible....The first question I have is how soon is it humanly possible to file BK CH 7 Per Se? Naw.....never let this be the deciding factor. You want to take time to do a good filing.

Go Visit the collection forum; those artful dodgers will have a host of tricks to delay those cases, get them dropped And even if they do get a judgement, it will get discharged in the BK anyway. Minor ripple, easily dealt with.....

Bottom line: if it was me, I would wait on the job first. Get the job, contact the cc lenders and negotiate settlements. If I don't get the job, file and discharge the debts.

Remember that a BK can only be done every 7-8 years, so you need to look forward and ask yourself what might happen bad for me in they future where I would really need a BK

[researchnerd]

Remember that a BK can only be done every 7-8 years, so you need to look forward and ask yourself what might happen bad for me in they future where I would really need a BK

This is really important to remember - bankruptcy is intended to be a last resort. If you (or a family member) get sick or injured and have massive hospital bills, for example, your 20K in CC debt may seem pretty insignificant. It doesn't sound like you have any assets you need to protect. If your only debt is the CC/unsecured, BK may not be your best option. Negotiating settlements is a huge pain in the a$$, but if you find a job soon you may want to seriously consider it. Then you'd still have bankruptcy available as an option down the road if you really need it.

I'm sorry to hear that you've been unemployed for so long, and I hope that your prospects for a new job work out well. My DH was laid off in early 2008 and hasn't found anything since then. If it were me, I'd wait on making any decisions until you find out for sure about this new job, because it will impact your choices significantly.

Try not to let the judgment intimidate you or push you into something before you've had time to evaluate your options. I know it's humbling to see your name on an actual lawsuit, but try to put it in perspective: At this point, the only thing it affects is your credit rating -- which, as you mentioned, is probably taking a hit right now anyway. Worst-case scenario, even if they do successfully get a judgment, there isn't much they can do. If you aren't working, they can't attach your pay, and if you don't have a home, they can't put a lien on it. There's no debtor's prison. Being served with a judgment makes your situation feel urgent, but realistically, you have some time. So do some research, read your NOLO books, and talk to a few more attorneys (I can't stress the importance of this enough) about your options. If you decide to go the Ch7 route, as long as your credit counseling is done, many attorneys can file within a week or even on the same day.

[johnnycakes]

If you land a job, you could still "eke" out life just like you are now, and pay off the $20,000 in three months. Or even conservatively pay it down $2000 a month for a year (even at 20% interest).

I think you are better off taking the credit hit - even a judgment, then unleashing the nuclear bomb on your credit file. You can pay off debts and clear up your report much faster than the 10 years the bankruptcy will remain.

[Dinero]

Very Informative

To your first question: The first question I have is how soon is it humanly possible to file BK CH 7 Per Se? I know you need to take some credit counseling before you file so is that something that can be done in one day?You can take the course online for pre-filing. Go here to find one approved in your state.Check them over, some are even free. Once you get the certificate (usually via email within a few hours or couple days at most) you can file your petition.

Question #2:The second question is suppose that suddenly recruiters are calling me about jobs opening and I even went on an interview today and have another interview set for tomorrow. So if I get one of these jobs would I still qualify for bankruptcy?That depends on the income. Check here for the median income for your state. You'd have to be below that to qualify for Chapter 7 without having to take the means test.

The six month look back is what they look at to see if you qualify for Chapter 7. However, you do get asked if anything has changed since you filed when you go to the 341. That is where you would have to tell them you had a new job. They would then ask what the new income is.

You need to sit down and figure out how long it would take you to pay your creditors if your income increases to the point where you can actually make a dent in them. Or, like you said, you could talk to them about settling if you are suddenly in a position to pay some lump sums. Keep in mind that any settlement that allows you to pay less than the original debt then puts you in a position to have to pay taxes on the difference. The creditors will issue a 1099 at the end of the year dinging you for the difference that they write off in order to settle for the lesser amount.

For us, filing pro se was our best choice. We own both of our cars outright, lease an apartment, and have very little else in the way of assets.

Good luck on your decision. I hope you find enough info here on these forums to help you make an informed decision that you feel comfortable with.

Thanks, free2breathe.

You are very informative.

There suddenly seems to be a lot of drama involved in my decision.

Is it always like this?

[free2breathe]

Thanks, free2breathe.

You are very informative.

There suddenly seems to be a lot of drama involved in my decision.

Is it always like this?

Yes, just the word "bankruptcy" brings up a lot of emotion and drama. Everyone wants to make sure you have the most information you can so you can make an informed decision. It really is, or should be, the last resort for finances. It's not something any of us take lightly. The most important factor is for you to really evaluate your situation, your future, what you can reasonably expect to happen while not counting on the pot of gold at the end of the rainbow

Everyone's suggestions here are worth looking into. In the end, you are the only one who can decide what the "right" decision is for you.

[helpme2010]

If you do file BK, I would highly recommend you hire an attorney. There may be some attorneys that will take partial payments until you can fully pay the fee. There is so much that can go wrong if you make mistakes doing it yourself. Having an attorney was incredibly valuable and stress reducing for me (take it from someone that has defended himself in court against a 3 year frivilous lawsuit by a corporation). If you do move forward, stop paying your credit cards and save that money up so you can afford the attorneys fee (probably around $1500 total including filing costs). Or do what the others say and try to ride it out until you get a job and slowly pay back those creditors.

My attorney told me that during BK, the creditors likely wouldn't find out if you get a job, but if they do, they can challenge your BK (and of course it could convert from a 7 to a 13 if you make enough money).

I also see an issue with the interview if they ask for a credit report on you and you are in the middle of BK. I believe this would scare off any employer from wanting to hire you. I believe after discharge, you will look much less like a credit risk and someone that is unstable to the company.

[dumpinmydebt]

Everyone here has given you great advice. We had to file because of a lawsuit. By looking at the court records we knew that the creditor would get a judgment and also get my hubby's wages garnished as soon as it was possible.

That being said, respond to the lawsuit! You may have 28 days to file your response (check your local court or the lawsuit should say.) Respond and deny everything. They will probably then set up a meeting to discuss the matter, usually takes another month or so to get a meeting. Then, what we did, was request a continuance. We told them we were filing soon, so they gave us another 3 weeks, and by that time, we had filed and gave them notice.

My point being is that you easily should have 2 + months to get it prepared. I did research alot before this lawsuit happened, but it did not take me months to do my paperwork. We are pro se, but as someone else above mentioned, we don't make much (half of the median), and don't have any real estate, or any assets really.

If you get a job making 4x what you did, I don't see it being that easy for you to file. You would be able to easily settle and pay off the debts and that's how they will see it. Also, I personally don't think it would be a wise decision to file over $20k in debt. I mean if you say you will be making over $3k a week, that's over $150k per year. You could easily pay it off and it would be better for your credit.