Can't Qualify for 13 or 7??

[fatty]

Ok, first att meeting next week. But doing lots of research so I can be comfortable with which att I end up choosing.

Minnesota, family 0f 5. Own house, and 2 autos free and clear and can cover them under MN exemptions.

several civil judgements ~ $300,000.
lots of cc debt ~ $400,000

Qualify for 7 with income.
But with all debts wiped out in Chap. 7 I would have disposable income to pay creditors.
However, with unsecured debt above Chap. 13 limits, I do not qualify.

Do I try to get 2 'new' car loans, and maybe even a small home equity loan even though I have bad credit so I have no disposable income?

thanks, and obviously I will be speaking with local MN attorneys, just want to have an idea the when interviewing them, they qualify.

[despritfreya]

I am assuming your debts are “primarily consumer debts” because if they are not, you automatically qualify for a 7. Having made that assumption. . .

What do you mean you "qualify for a 7"? Your post sounds like you do not qualify. Are you above or below median income for a family of your size? Is it a matter that while you are below median income, your real time budget (Schedule I & J) shows you have the ability to make a Plan payment? If so, what would the payment be? Utilizing that payment over 60 months, how much of the unsecured debt would you pay off? Is that amount “inconsequential”?

Before you go out and finance things you may not need, discuss you options with an attny.

If you do not qualify for a 7 and incurring more debt to get you there is not advisable you can consider a Chapter 11. You would need to find an attny who is comfortable with individuals filing Chapter 11 and, despite what you may have heard or read, a Chapter 11 is not a bad thing.

Des.

[HHM]

What sort of debts are these, the civil judgments and what was the CC debt used for?

It would be extremely odd if these were really "consumer" debts.

Start researching non-consumer chapter 7 Bk.

[fatty]

What is non consumer debt? We are below median income.

[fatty]

one judgement from a cc. The others from individuals that loaned money for investment properties that went belly up.

[HHM]

okay, look up "non-consumer chapter 7 bankruptcy"

If the "majority" of your debts (majority of ALL debts, including mortgage) are non-consumer debts (e.g. business debts, tax debts, student loans, investment property debt, etc), then you get to bypass the means test.

Go see the attorney, they can fill you in on the details, but my guess is you can probably qualify for a non-consumer chapter 7 BK and as such, you don't need to worry about the means test (e.g. being below median)

[fatty]

HHM so therefore it can be perceived that a non consumer chapter 7 is easier? at least to qualify?

I am going through my debts (accounting of), many are old, but I am not sure that I will be able to argue that majority 50%+ are non consumer debts. Does that change anything for me?

[HHM]

If the debts are primarily consumer debts, then you will have to pass the means test. If you cannot pass the means test and you are over debt limits for chapter 13, the you file chapter 11. Not that big a deal except that chapter 11's are 10 times more expensive, but achieve the same result.

[fatty]

Ok, thanks for the info. Again, I am just getting an idea of things so that I can ask informed questions based upon my specific situation when I meet with Attorney. Thanks again.

How bad would it be to see 2 'new' auto loans just months before filing? I have no issue justifying the need to replace, as my current two are 12 yrs and 8 yrs old with over 300,000 miles on the pair of them... just want to do what is right and not get into say a high payment under 13 only to find my vehicle broken down and not be able to replace. Is this more of a trustee issue too? maybe it raises a flag for them to dig deeper? of course with nothing to hide, do I care?

[frogger]

You may be a Chapter 7 asset case perhaps?

[HHM]

With the amount of debt relative to your income, the least of your worries is having 2 new cars. If two new cars would actually allow you to file chapter 7 and you have $700,000+ in essentially consumer debt (with judgments, and odds are, those judgments have been turned into liens at this point), you have MUCH bigger problems. Your case will have more scrutiny regardless of adding vehicles, and odds are a few creditors will come out of the woodworks to challenge. You might actually be better off in a chapter 11.

Stop researching, find the best BK attorney in your state and hire that person regardless of how much it costs.

[fatty]

ahh, thank you thank you thank you. I now have a much better understanding. And I will be able to go non consumer chapter 7 because of the loss of several rental properties over the past few years... Thanks again I will discuss that option with attorney.