Met with BK Atty...Please look over expenses and let meknow what you think...

[discouraged]

oc - I admit that I smoke also but, to be truthful after reading the posts, it doesn't appear any trustee will okay that. I'm trying to quit (with medication) but have only slowed down. I put mine into the entertainment category and cut back somewhere else. Did NOT put cigs into the budget. Did include the cost of the medication to help me quit into health care.

I think you will find that the further along you get into your bk, the more you strive to reduce costs. I'm amazed at what I have cut back on, but I don't have any children at home either.

Good luck to you on your journey to freedom.

[oc714]

Thank you Discouraged.

[Pandora]

We met with an atty today and decided to retain him. He feels that we will qualify for chapter 7 event hough we are over the median. The 6 motnh look back gave us 45K du to lots of OT. I've been working on our expenses and let me know what you think please. Family of 5 in CA.

Gross 7609
Net 5877

1st mortgage $2296
2nd HELOC $755

Input is much appreciated.

Honestly I didnt get past these numbers above before the warning light went off. Why are you considering keeping a home that is more than 50% of your net income a month? You already stated you cannot strip the 2nd off - so that means you're paying in full every month $3051 for mortgages, leaving you roughly $2800 left over a month for everything else, and you're already in the hole.

Do the math:

$5877 net
-3051 mortgage

$2826 left

your calculations above minus mortgages total $3164 - so you're negative $338 based on your numbers, which for a family of 5 are rather low in some areas I believe.

Dont set yourself up to fail or end up in the red every month - you only get 1 shot to file BK, then its off the table for 8 years.

[Freddy03]

Honestly I didnt get past these numbers above before the warning light went off. Why are you considering keeping a home that is more than 50% of your net income a month? You already stated you cannot strip the 2nd off - so that means you're paying in full every month $3051 for mortgages, leaving you roughly $2800 left over a month for everything else, and you're already in the hole.

Do the math:

$5877 net
-3051 mortgage$2826 left

your calculations above minus mortgages total $3164 - so you're negative $338 based on your numbers, which for a family of 5 are rather low in some areas I believe.

Dont set yourself up to fail or end up in the red every month - you only get 1 shot to file BK, then its off the table for 8 years.

I was thinking the same thing b/c I believe these fees included the OT which is not guaranteed.

[momofthree]

Honestly I didnt get past these numbers above before the warning light went off. Why are you considering keeping a home that is more than 50% of your net income a month? You already stated you cannot strip the 2nd off - so that means you're paying in full every month $3051 for mortgages, leaving you roughly $2800 left over a month for everything else, and you're already in the hole.

Do the math:

$5877 net
-3051 mortgage

$2826 left

your calculations above minus mortgages total $3164 - so you're negative $338 based on your numbers, which for a family of 5 are rather low in some areas I believe.

Dont set yourself up to fail or end up in the red every month - you only get 1 shot to file BK, then its off the table for 8 years.

The op only owes $312k on the home and they have a good amount of equity. They have a very good chance of being able to refi their home after the bk, lowering their payment by a good $1000/mo. The home is definitely worth keeping in that scenario....

[daylate]

Who is going to refi after a bankruptcy? People with high credit ratings are having a tough time. Wouldn't there be a couple of year wait at least? What would be the difference between refinancing and obtaining a new mortgage with the same amount of equity as a down payment? Just curious.

[oc714]

My husband and I have talked about the house but for now we will keep the house, if we need to let go we will. We don't want to go back to this situation in the future. We are living on a budget now and I can only pray that all this works out for us.

[Freddy03]

The op only owes $312k on the home and they have a good amount of equity. They have a very good chance of being able to refi their home after the bk, lowering their payment by a good $1000/mo. The home is definitely worth keeping in that scenario....

What about the 2nd mortgage? Did the OP say how much that is?

[oc714]

What about the 2nd mortgage? Did the OP say how much that is?

Freddy- On my house we owe 312K on the 1st and 86K on the second. Combined with both yes we are underwater by roughly 30-40 K. My house could probably sell for 350-370 K.

[csonly]

oc - we were over median and were still able to file a Ch 7, but not without many hurdles and scrutiny from the UST, so just be prepared for that. Here is where I see problems for you: Transportation (the UST will go by the IRS standards)...this will include car maintenance, repairs/tags, gas, car insurance, etc. Check your state allowances, as that is what the US trustee will use, regardless of what figures you put. Your gross/net income...does that include health insurance? If so, make sure that is listed in the correct area on your schedules. Actual health/dental insurance is an expense that I don't see listed. I see them looking at your refund of 9K in a bad way, they will use your gross and tell you what taxes are due and if there is a discrepacy, they will add that to your DMI. They will probably question the cell phone of $180, but may allow it with documentation. Be prepared to submit proof of all your expenses, bills, statements and proof of payment. The interim trustee (the one at your 341 meeting) will more than likely question the tax refund regardless of how you spent it. As far as your mortgage, keep it current, I repeat, keep it current. Even though you are over median, a chapter 7 is possible, as long as you have "allowed" expenses that leave you with no or very little DMI. Some of your expenses seem low to me, like day care, phone??? As another poster mentioned, you get $300 for medical/dental, so that can be increased. No car payment?

[oc714]

oc - we were over median and were still able to file a Ch 7, but not without many hurdles and scrutiny from the UST, so just be prepared for that. Here is where I see problems for you: Transportation (the UST will go by the IRS standards)...this will include car maintenance, repairs/tags, gas, car insurance, etc. Check your state allowances, as that is what the US trustee will use, regardless of what figures you put. Your gross/net income...does that include health insurance? If so, make sure that is listed in the correct area on your schedules. Actual health/dental insurance is an expense that I don't see listed. I see them looking at your refund of 9K in a bad way, they will use your gross and tell you what taxes are due and if there is a discrepacy, they will add that to your DMI. They will probably question the cell phone of $180, but may allow it with documentation. Be prepared to submit proof of all your expenses, bills, statements and proof of payment. The interim trustee (the one at your 341 meeting) will more than likely question the tax refund regardless of how you spent it. As far as your mortgage, keep it current, I repeat, keep it current. Even though you are over median, a chapter 7 is possible, as long as you have "allowed" expenses that leave you with no or very little DMI. Some of your expenses seem low to me, like day care, phone??? As another poster mentioned, you get $300 for medical/dental, so that can be increased. No car payment?

When I met with the atty he stated he would use the proper withholding for taxes amount on the schedule since we had withheld too much. Yes, I am curent on the house with the refund I received. No car payment since 2 cars are 10+ yrs old and a 2005. The only thing is that since we just stopped paying the CC in February of about 1,000-1,200 a month we were living on about $800.00 a month. Our bills were overdue just like the mortgage and 2nd. It was my mistake to keep paying on the CC instead on the necessities like food. Due to daycare I pay very little to my mother because my 7 yr started school and only cares for him a few hours. I will bumb my insurance up since we've had lots of $$$ payed out for Ortho..

[csonly]

oc - I think we all have gone that route, putting the CC's first, but in reality, priority is mortgage and feeding your family. Once you give your final figures to your attorney, I'm curious to know what your DMI ends up being. I'm pretty sure they will count the OT if it is in the 6 month look back. If your attorney is confident with filing a 7 and not a 13, then I would trust him.

[csonly]

oc - I did a rough calculation of your expenses that I think would be acceptable and I came up with approx. $5941 expenses. Again, this was just a rough calculation, increasing medical/dental to $300 and not counting those expenses that I think the UST would not allow. This is just my opinion based on my personal experience.

[oc714]

oc - I did a rough calculation of your expenses that I think would be acceptable and I came up with approx. $5941 expenses. Again, this was just a rough calculation, increasing medical/dental to $300 and not counting those expenses that I think the UST would not allow. This is just my opinion based on my personal experience.

Thanks csonly I really appreciate your comments.
My atty of course stated no problem getting a Chapter 7 but of course I don't know the trustee. I'm curious to know about how this OT will workout. Looking at paystubs the OT was all done towards the end of the year. I hope my atty can prove that this is not something he can count and can prove with all the paystubs and W-2 forms. We have never made more that 87K a year based on 5 years of tax returns.