SERIOUSLY, what's the point?! I'm p*ssed! If you are considering BK...

[AKA]

I went through two years of financial agony prior to considering filing. This included loss of income, divorce, dealing w/ creditors and trying to modify the mortgage twice unsuccessfully. During the 2nd attempt to modify I was able to get a decent paying job making $3,300 gross a month...this was 3 months before filing a 7. After the 2nd unsuccessful attempt I decided to get a lawyer who recommended a 7.

Once I found out they ONLY looked at my last 6 months, my biggest concern was would I make too much money to where it could effect my filing. My lawyer and I didn't think so, but sure enough, due to a few good months of pay I didn't expect due to working hard and busting my ass at work, it did.

So what is the incentive for people filing or looking to possibly file to work hard and try to obtain gainful employment?! Guess what?! There is none! If anything they have incentive to do absolutely little to nothing until they are discharged.

They want people to work but punish them if they do by totally neglecting the circumstance that got them there beyond the past 6 months before filing. If I never would have done the right thing and sought out a good job and just be a bum I would have had my 7 discharge in no time. In other words I'm being penalized for becoming a working class, tax paying stiff again.

On top of that if you convert to a 13, like I have, you have to re-submit all your updated past 6 months financials again which, if you started working like me, are likely to look better than the previous 6 months from when you originally filed BK! So if your in debt and thinking about filing, be sure to make little to nothing and blow all your money (not CC) over 6 months, then file and don't try to become productive until you are BK is discharged or confirmed.

Rant over! That is just screwed up, but since when has the court system really made common sense.

[tcreegan]

Rant over! That is just screwed up...

...hard to say sorry you got a job...might get clobbered by some folks around here.....

How about a quote from the classic movie Young Frankenstein:

"It could be worse" "HOW could it be worse" "It could be raining" cue thunder and rain

Or maybe Monty Python?

Life's a piece of shit,
When you look at it.
Life's a laugh and death's a joke, it's true.
You'll see it's all a show,
Keep 'em laughing as you go.
Just remember that the last laugh is on you.


Hope you can look back and laugh someday AKA....

Tom in Colo

[keepmine]

While Tom makes a good point-you're fortunate to have a good paying job- hopefully others will see this thread and understand the importance of preplanning a bk.

[HHM]

Let me be the jerk for a second...it was the 2 years of struggling and YOU CHOOSING to wait that has created this situation, not the bankruptcy system.

Ultimately, our circumstances are dictated by the choices we make.

[daylate]

Something doesn't sound right here- If you got your 3.3k job three months prior to filing and that was more than you were making then I don't see how you would have failed the means test. So if thats true then it must be that your DMI was too high? Is it too late to add expenses? Sorry you feel the way you do, this is such a convoluted process that it is easy to miss something but your lawyer shouldn't have missed this one IMO. Good luck.

[tcreegan]

Hi all,

Hi daylate, the means-test wasn't the problem, it was DMI calculated from schedule I & J which is current and expected income/expenses

[justbroke]

So what is the incentive for people filing or looking to possibly file to work hard and try to obtain gainful employment?! Guess what?! There is none! If anything they have incentive to do absolutely little to nothing until they are discharged.

Unfortunately, bankruptcy is not an incentive based system, it's a needs based system. Many people, including myself, tried to stay afloat for years before throwing the towel in. I was fortunate enough to have investment properties which kept my case a non-consumer case although I qualified as a consumer as well.

The key is understanding how bankruptcy works and then utilize it when it works for you. Otherwise, many people learn that bankruptcy is not exactly what they think/thought it was, and that primarily comes from the would-be Chapter 7 debtors who find themselves in a Chapter 13. There are many working class people who file Chapter 7s and receive Chapter 7 discharges every day. Even those earning over $100K a year do-so as well. I will continue to tell people my theory, and that's that the means test means nothing. It's only one particular test. Being under-the-median guarantees nothing either.

A Chapter 7 discharge will always come down to your disposable income. I'm sorry to hear that you learned this a little too late.

However,timing is everything when it comes to a bankruptcy. As a matter of fact, almost all the technical aspects of bankruptcy are temporal (pertaining to time). So, my new saying will be... that when it comes to bankruptcy... timing is everything.

[chicagoed195]

Well said, Justbroke.

I got me into this situation by living up to and beyond my means. Then my means was reduced by 1/3 and I couldn't keep up. I spent two years, unwisely I might add, trying to stave off bankruptcy. In the end, I had to give in. I won't bore anyone with the stories of mortgage modification woes and wasting assets in the hope that I could avoid the inevitable.

Because I live in an area where the housing prices will rebound reasonably quickly and my first mortgage was only underwater slightly, I chose to file a 13 even though I could have qualified for a 7. I make over $100K, but as you say, each person's individual circumstances dictate what their disposable income is and the means test just becomes a different hurdle to get over. In practical fact, I had to have my employer certify that they would be paying a bonus in order to get my disposable income high enough to qualify for a 13. Planning and timing is everything.

After the 341 meeting and the acceptance of the plan and the successful stripping of the 2nd trust, I felt like the 800 pound gorilla had left the room. 12 payments down and 48 to go and only wish I had recognized the wisdom of this course of action 2 years ago.

[AKA]

Rant over! That is just screwed up...

...hard to say sorry you got a job...might get clobbered by some folks around here.....

Hope you can look back and laugh someday AKA....

Tom in Colo

Thanks, Tom, hope I can to. Believe me I am fortunate and happy to have a decent paying job again, but ultimately it was in doing so shortly before filing that did me in.

[AKA]

While Tom makes a good point-you're fortunate to have a good paying job- hopefully others will see this thread and understand the importance of preplanning a bk.

I am very fortunate, as I love my job, which is probably why I do so well at it. I tried and tried to work things out on my own, paying what I could when I could, borrowing money from family when desperate and hoping the job would help me modify my loan and pay debts and real estate taxes. If I had known then what I know now I would have filed a year earlier and been okay.

[AKA]

Let me be the jerk for a second...it was the 2 years of struggling and YOU CHOOSING to wait that has created this situation, not the bankruptcy system.

Ultimately, our circumstances are dictated by the choices we make.

It's okay to be a jerk sometimes. ;) Yes, I had a choice. I CHOSE to work my way out of the debt on my own. I CHOSE to be disciplined, do the right thing, not to rely on other means or the quick hand out. And because I CHOSE this...to try and own up to my responsibilities and debts by obtaining gainful employment to get me out of financial trouble only to realize it didn't make a difference to my debtors, it ends up being the one thing preventing me from being able to work my debts through bankruptcy. As if the two years where I tried to work with debtors while making no to little income didn't even matter.

As I stated, the system forces people to not seek well paid employment 6 months prior or after their BK filed and final, regardless of the circumstances leading up to 6 months before filing.

[AKA]

Something doesn't sound right here- If you got your 3.3k job three months prior to filing and that was more than you were making then I don't see how you would have failed the means test. So if thats true then it must be that your DMI was too high? Is it too late to add expenses? Sorry you feel the way you do, this is such a convoluted process that it is easy to miss something but your lawyer shouldn't have missed this one IMO. Good luck.

Well, believe it or not it was a record month for me the month AFTER I filed. Guess what? The trustee didn't care if it was AFTER I filed they shoved it right in my face and accused me of making $8,000 monthly! I showed her my next mo. check for only $2,600 and told her I was commission only. Next month I could make less than a $1000, who knows? If they looked at my other mo checks they averaged maybe $3300-3600 gross.

[AKA]

However,timing is everything when it comes to a bankruptcy. As a matter of fact, almost all the technical aspects of bankruptcy are temporal (pertaining to time). So, my new saying will be... that when it comes to bankruptcy... timing is everything.

Very true. Had to learn that the hard way. Just started with the 13 which I will be happy with, just worried they are going to throw it back in my face again. Of course my lawyer did tell me $169 mo at 60 mo would be a 100% repayment plan while surrendering the house. Not sure if that makes a difference with the income I will be receiving.

[Babybear]

I am new to all this and as I read this thread I had some questions.


If timing is everything...when is the best time? what should ones circumstances be when you file?

someone said it all comes down to the means test.....can we discuss what is on there and how best it should be filled out to get a discharge?

You mentioned disposable income.............if your monthly expenses cover all your income than I assume you are ok with regard to disposable income.....but what can and cant be included in the expenses? can you include pool care or lawn work that you pay for monthly if you cant do it yourself due to age or health................

I really want to know when is the best time to file and how far back they look at your bank statements................does it vary by state?

[justbroke]

If timing is everything...when is the best time? what should ones circumstances be when you file?

Well each person's finances, expenses, income, exemptions and overall circumstances are different. First, it's based on what you are trying to accomplish. Trying to save secured property, you have to get into a Chapter 13.

The timing statement is because many calculations are based on time. Additionally, what you bought, sold, or otherwise transferred, is also based on time. What you purchased with credit cards as well, is based on time (90 days would be a presumption of fraud).

someone said it all comes down to the means test.....can we discuss what is on there and how best it should be filled out to get a discharge?

I will say that it absolutely does not come down to the means test. The means test is, as some Judges put it, solely a bright line test. It's just one of a few "tests" that you must pass. Some judges have even gone so far as to call it "arbitrary" with no basis of the present facts. Too many people believe that just passing the means test or being under the median will get them a Chapter 7 discharge, when nothing is further from the truth. The real test is both the Schedule I and Schedule J evaluation, and the actual verification of the expenses claimed, as well as your actual income. For example, many pro se debtors that are paid weekly, don't understand that there are 4.333 weeks in a month, not 4. This sometimes creates too much income and pushes them, not over the median, but over the maximum disposable monthly income (DMI). It's quite easy to just say, I work 40 hours a week and make $20/hr so that is $800/week and $3,200/month. Unfortunately, it's $3,466 a month and that $266 different could put you in a Chapter 13!

You mentioned disposable income.............if your monthly expenses cover all your income than I assume you are ok with regard to disposable income.....but what can and cant be included in the expenses? can you include pool care or lawn work that you pay for monthly if you cant do it yourself due to age or health................

Well, that would be an argument you'd have to make with the United States Trustee (UST). They do not like what they call "luxuries" like having people provide landscaping services and service your pool. I use to have all those services, but I only have landscaping now. I have my stepson do the pool. It's a lot cheaper too. (I maintain landscaping services because my HOA is very very very proactive when it comes to even a single weed in the flowerbeds and then start their $100/day fines! They "patrol" weekly!)

I really want to know when is the best time to file and how far back they look at your bank statements................does it vary by state?

All Districts look at bank statements for Chapter 7 filers (and for some Chapter 13 cases, but don't scrutinize as much). They are looking for large deposits and withdrawals to make sure they coincide with your Scheduled income and debt. People like to hide money just before filing. This is specifically what the Trustee looks for! You'd be shocked, but many people actually try to hide money or don't disclose to their attorney that they had large $$$ transactions between themselves and a family member.

Let me actually answer your question now. The Trustee can look back as far as necessary to satisfy his curiosity on any fraud issues. Usually, they only want 6 months of statements, but they may look back further if you are a self-employed person or something tells them to go back further.