Income question and credit counseling questions - sorry long

[basketsbears]

My husband and I are thinking about filing Ch 7 as it seems we pass the means test. The reason we are filing is we have a rental property that we are "in the hole" every month and since it is not our primary residence BOA will not budge on anything. So we decided to let it go back.

In November I switched my status at work from full-time to part-time as I am a full-time graduate student. This change is what has made us pass the means test (at least from the Nolo page it seems like it). My question is I am thinking we need to wait close to 6 months before we file, but am anxious to get started now that we have decided that that is probably the route we need to go. Will the trustee question why I don't work full-time?

Also, my husband is a disabled vet, (70%), it did occur while he was active duty, although not sure all the debts he has were during that time. If he would qualify for means test to be exempt - since we are filing "joint" does that take into account both of us? Some have said the VA income counts towards means test, others said NO. It is not taxable income. If we do count it, with our expenses, it seems we would still qualify. Just very nervous as we had talked with a lawyer almost two years ago, and all he would talk about was Ch 13 at 100%, (I was full-time then), so we went with credit counseling. Our income now is $5150 (including VA) or $4000 without VA.

The credit counseling has most of our debt and our payments on that are now $870 per month, we have two car payments $495 & $140 per month and another unsecured payment of $170 per month. My question is, if we wait close to 6 months to file, do we still pay all these payments. My husband wants to keep both vehicles, just get rid of unsecured debt. We both had filed BK many, many years ago, never thought we would be in this position again. If it weren't for the foreclosure looming sometime in the future we would not have considered it. Our primary residence we plan on staying here, but it sounds like it is not a good idea to reaffirm the mortgage, but as long as we pay payments will be OK. We are current on all payments (except 2nd house as we stopped paying it).

Sorry this is so long, any information is appreciated. Is it too soon to talk with an attorney???

[backtoschool]

It is not a problem that you are not working. I would make your assumption on the fact that the VA income will count, although this varies by district. If you are planning on keeping the cars, you need to stay current with the payments. You should be paying and be current on any secured debt (cars, house) that you plan on keeping post bk. You do not have to reaffirm the mortgage, but you need to stay current on your payments in order to keep the house and cars. You most likely will not have to reaffirm the cars either, but some districts and some car financing companies require that you reaffirm if you want to keep the cars post bk.

[Wantmypeace]

Are you upside down on the cars? One of the payments is pretty big. Have you considered letting it go and buying a car outright to help get you inline on your budget post bk? I would stay current on the cars (you may need the debt to help you pass the means test) and anything else you intend to keep. Even if you decide to let the cars go later, you'll need to be current when you file.

In either case, you need to interview a couple of attorneys before you make any decisions. They will be able to tell you the best course of action. Consultations are generally free (and if they aren't, find a different attorney). Talk to a few before you make a decision. You will have a lot more information and feel more confident about your decision after speaking with a professional.

[basketsbears]

Yes, we are probably upside down on the big car payment - it's a 2009 Jeep Liberty, and I saw trade in value on KBB was $15-16,000, we owe probably $23-24,000. So we would probably let that go back. We only owe a couple of thousand on the other one. We will keep everything current (except rental house). I had thought if we stopped paying unsecured debt, could save up and purchase a car with money we save. I am not interested in getting another car payment at this time.

So it's not too early to talk to an attorney?

[Wantmypeace]

Sounds like a good plan. And, NO, it's never too early to talk to an attorney. Bankruptcy is a business decision and should be well thought-out. I've read many posts from people who made last-minute decisions, and then went, "Oh, if I had only known that 4 months ago, I would have waited..." So, talk to an attorney, get some advice, and make a thoughtful, purposeful decision. It is worth it!

[tobee43]

Yes, we are probably upside down on the big car payment - it's a 2009 Jeep Liberty, and I saw trade in value on KBB was $15-16,000, we owe probably $23-24,000. So we would probably let that go back. We only owe a couple of thousand on the other one. We will keep everything current (except rental house). I had thought if we stopped paying unsecured debt, could save up and purchase a car with money we save. I am not interested in getting another car payment at this time.

So it's not too early to talk to an attorney?

no, it's never too early...and actually we had to interview 6 prior to even hiring one. you want to make sure you find the right one for your situation, and of course that you feel as comfortable with that person as possible in this most uncomfortable situation. since MOST consults are free, i would see a few and see what they said. it was funny...we had some that told us totally the opposite of what other told us...so you get all kinds. we only attended "free" consults...except ONE...which cost us $20...and actually that was the firm we hired.

it always good to get some advise and it's a way to "learn" about what your doing in respect to your bk. best of luck to you!