Somebody help me to make the sh_tty committee in my head shut up, please

[PushRestart]

So my lawyer says that the income of both my wife and myself in my state and county needs to be no more than $30K during the 6 months prior to filing PLUS what he says are my allowable business expenses of about $3500/mth. If my wife and I make that amount or less, he says we will do a non-asset chap 7 BK, and wifey and I can maybe start to breathe again...

Still, my nagging brainpan is reading lots of stuff in this forum that prompts "the committee" in my skull to start squawking like a rabid pack of Democrats and Republicans at a free kegger. Where to begin, lemme see if I can organize a bit here...

1. How can I be as sure as possible that my total of $51K for the 6 months is actually allowable for a chap 7? Can't one of these trustee folks say that my biz expenses suck and send me to BK prison? Is coming close to that line a bad idea?

2. As a non-asset case, I have to make sure that my assets fit into the total amount of allowable "exemptable" stuff. I can get an appraiser/auctioneer to value my stuff accurately for a liquidation/Craigslist value in writing easy enough, but can't The Man say my figures are not correct and come take my XBox or convert me into a chap 13?

3. What happens if I am an idiot and forget something like a specific debt; does that mean that I still have to pay anyone I might have forgotten?

I am sure that I am forgetting some critical question that The Committee wanted an answer for, but I think I will go take some prozac or valium to make them shut up, me so tired...

[DebtEnder]

So my lawyer says that the income of both my wife and myself in my state and county needs to be no more than $30K during the 6 months prior to filing PLUS what he says are my allowable business expenses of about $3500/mth. If my wife and I make that amount or less, he says we will do a non-asset chap 7 BK, and wifey and I can maybe start to breathe again...

Still, my nagging brainpan is reading lots of stuff in this forum that prompts "the committee" in my skull to start squawking like a rabid pack of Democrats and Republicans at a free kegger. Where to begin, lemme see if I can organize a bit here...

1. How can I be as sure as possible that my total of $51K for the 6 months is actually allowable for a chap 7? Can't one of these trustee folks say that my biz expenses suck and send me to BK prison? Is coming close to that line a bad idea?

There are three ways to qualify for chapter 7. First is as your attorney suggested and only make half of the median income for your area this is based on IRS guidelines in the 6 FULL months before you file. Second option is the means test. In this case even if you make over half of the median income your secured debts and other living expenses if the drop your leftover income to less then $187(i think this number is correct may be off a few bucks then you still can get chapter 7. This takes more effort and there are many BK attorneys not willing to fight for means test chapter 7's. Third option is a non-consumer BK7. You mentioned a business so this may or may not apply but if over 50% of your debt was acquired initially FOR business then you in a sense get a free pass. Example being if you bought say 2 rental houses AS rentals and your main house and other total debt is less then the two rentals you can go for a chapter 7. In my case I could have gone this route if I was not otherwise under median. Had 2 rentals plus CC debt used solely for rehab of the rentals

2. As a non-asset case, I have to make sure that my assets fit into the total amount of allowable "exemptable" stuff. I can get an appraiser/auctioneer to value my stuff accurately for a liquidation/Craigslist value in writing easy enough, but can't The Man say my figures are not correct and come take my XBox or convert me into a chap 13?

Assets Trustees are looking for is property such as real estate, high value jewelery, fully paid off cars/boats/planes or otherwise with thousand plus equity. They are not looking for your used electronics unless perhaps you have a brand new 5 foot wide LED lcd TV. They can't convert you to a thirteen just because you have assets. Worst comes to worst you can BUY back any asset the trustee wants to sell. However sometimes it is worth calling their bluff if they do ask this. In most cases retail goods are of little concern to a panel trustee


3. What happens if I am an idiot and forget something like a specific debt; does that mean that I still have to pay anyone I might have forgotten?

If you are in fact a non-asset case then there have been MANY rulings affirming that ALL debt that could be discharged, IS, even if not listed if you otherwise made good faith effort to list all debts. Leaving off a debt that could possibly try to object to it's discharge in a effort to avoid a fight could be an issue but again, this is a worst case issue. Old forgotten debts would not fall here. A loan you took out day before filing and then handing them a discharge order , with no other contact, when case is closed would be a bad thing


I am sure that I am forgetting some critical question that The Committee wanted an answer for, but I think I will go take some prozac or valium to make them shut up, me so tired...

In short, don't overthink, be honest, but the trustee sees many cases every day. He is looking for the easy stuff to get. Your main issue is to qualify for ch7 to start, rest in your case is just over worry.

[tcreegan]

Hi PushRestart,

WA median income for a household of 2 =62,204 yr = 6-months of that = 31,102 monthtly = 5184
Your income = 51,000 /6-month = 8500/month

8500 minus 5184 = 3316 per month = the amount of expenses you need to have to pass the means-test. With the 3500/month business expense, plus the other sundry deductions you will qualify for a Ch 7 with flying colors. No prob.

these trustee folks say that my biz expenses suck and send me to BK prison? Today is your lucky day! We got rid of debtors prisons a couple hundred years ago. The solution to keeping the trustee happy is provide documentation for everything they asked.

As a non-asset case, I have to make sure that my assets fit into the total amount of allowable "exemptable" stuff. I can get an appraiser/auctioneer to value my stuff accurately for a liquidation/Craigslist value in writing easy enough, but can't The Man say my figures are not correct and come take my XBox or convert me into a chap 13? ...income gets you into a CH 13, not your assests. If you have more assets than the exemptions allow, some of your stuff gets sold and the money distributed to your creditors.

To value your personal property, go here and see how the exemptions are grouped: (you can pick State or Federal) http://www.thebankruptcysite.org/exe...ashington.html (State of WA)
http://www.thebankruptcysite.org/exe...s/federal.html (federal)

Most people highly overvalue their stuff, you remember the price when it was new. Must do some rethinking: how much would this cost in a thrift store? Except for high $$ electronics or antiques (in the couple hundred range or higher), no one wants to know how many shoes you have, number of umbrellas, if the pot is 12 qt or 16 qt, or how many stuffed animals your kid has in her room, etc. Just go around your house and make your best guesstimate....thinking all the time "what would I pay for this in a second-hand store?"

If the trustee is a pain in the posterior and doesn't agree w/ your numbers, they send out their own appraisor. Where those #s are different from your #s, you have another sit-down with the trustee and work out a compromise.

3. What happens if I am an idiot and forget something like a specific debt; does that mean that I still have to pay anyone I might have forgotten? ....you wouldn't be the first idiot to forget someone, you would be just one person in a loooonnngggg line. If they get in touch w/ you or you get in touch with them when you realize the mistake, you send them a copy of the BK notice and discharge order, and a polite letter informing them the debt was discharged in the BK and would they please update their records.

Well....lots of gibberish there...hope some is useful...

Tom in Colo