What happens if your slightly over the means test for your state? forced into BK13?

[keepsmiling]

I know 13's work for lots of folks, and kudos to them... but slv has no assets to keep, no liens to strip, and a wildly fluctuating income. At least to the best of my knowledge. Hence no good reason to be in one when a 7 could be simple to achieve. I'd say focus on that probability and cross the 13 bridge only if/when necessary.

[LadyInTheRed]

I agree that filing Chapter 13 on only unsecured non-priority debts is a waste of money,

That is a very general statement that is not true for many people. Even if I didn't have a 2nd mortgage to strip and didn't have a new car loan included in my plan, I would be paying $31,000 (that includes the retainer paid to my attorney before filing) to get rid of $58,000 in credit card debt and pay the $4,800 in attorney fees included in the plan. A savings of $27,000, without including the significant interest which would have made it impossible for me to be debt free in 5 or even 10 years. I suspect my case is pretty average. Somebody with decent income who foolishly ran up credit card bills until something had to give. Without Chap 13, I soon would have been unable to make minimum payments, not had any money for settlements and would have faced judgements and wage garnishment.

Would a Chap 7 be preferable? Of course it would. But, a Chap 13 can still be extremely beneficial to many people with steady income and only unsecured debt.

[LadyInTheRed]

I know 13's work for lots of folks, and kudos to them... but slv has no assets to keep, no liens to strip, and a wildly fluctuating income. At least to the best of my knowledge. Hence no good reason to be in one when a 7 could be simple to achieve. I'd say focus on that probability and cross the 13 bridge only if/when necessary.

Inaccurate generalizations need to be addressed to not scare people away from Chap 13 who may benefit from it. But, You are right to focus back on slvmore's situation. Having income slightly above median should not disqualify her from a Chap 7.

[LadyInTheRed]

NEXT: monthly expenses. (Tips on easiest way to do this?)

Other than payroll deductions and payments on secured debt and any unusual or excessive expenses, I woudn't worry too much about expenses for purposes of consultations. The focus will be on the means test which uses mostly national and local standards. Just jot down your normal average monthly expenses and any significant annual or quarterly expenses averaged to a monthly figure.

This link is for all states median income:

http://www.legalconsumer.com/bankrup...et%2C+IL-IN-WI

Nolo is a good source and is good at staying up-to-date. But to insure accurate information for means testing, I recommend the U.S. Trustee website: http://www.justice.gov/ust/eo/bapcpa...anstesting.htm

so far I have prepared for my meeting:
Total Income
Total Debt,
List of Creditors
Totals cash All Accounts
Copies of latest bank statements
Total Assets ( General: including NADA)
Latest Credit Report
Tax returns for last 4 years.
Last settlement offer letter to CCs
copy of OC lawsuit filed, but Not served.

Attorneys are unlikely to look at the bold items at initial consultations, but it's good to have them along and you will need to give them to the attorney you hire. I'd keep them separate from the other items during the consultations so it's easy to find the more relevant info. Your settlement offer letter is completely irrelevant.

If you haven't already done so, make sure you break debt down into unsecured and secured and list each secured debt separately.

[slvnomore]

thanks, I am working on my income and expenses right now... I have printed out 6 months of statements, I am now highlighting catorgories in different colors, then I will add up the categories, then I will total them and divide by 6... that will give me average amount a month, correct? ; )

[slvnomore]

I have also checked out the trustee link you gave me and the yearly amount was wrong. It is even less! Illinois $47,355
six month would be half that correct?

Would any one have a simple sample expenses format they used to present to att?

[keepsmiling]

You are really over thinking this vis a vis "format" etc
Be SURE that you are using realistic numbers. In other words, if you have been subsisting on ramen noodles because of high cc payments-- don't be using that number for food. Use your allowances.
As to the other q- how many in your household? Be sure you are looking in the correct column.

[Pjmax]

http://www.uscourts.gov/uscourts/Rul...006J_1207f.pdf

I agree, your overthinking again. Just write down ALL your monthly expenses as they actually are, whatever they are, use the past 6 months and divide by 6 for an average. Your attorney, if you actually get to the point of hiring one, will put them in the proper categories and make adjustments where appropriate.

[justbroke]

A strategic Chapter 13. Yes, you heard it hear first people! If you have medical issues and may, due to those issues, qualify for a Chapter 7 during your Chapter 13, the Chapter 13 wins hands down every single time. The magic is this thing called "conversion". When you convert from a Chapter 13 to a Chapter 7, you get to include all "new" debt incurred from the time of filing Chapter 13 until the day that you convert to Chapter 7. I do not know why many people so firmly believe that Chapter 13 is not a great tool. Not only can you discharge debt which you cannot discharge in a Chapter 7, you can emerge from a Chapter 13 in better financial condition than a typical Chapter 7.

If I was having trouble paying bills and found that filing bankruptcy would mean Chapter 13, I would still file. The nice thing is that should you later have income issues, just convert, include all the new medical debt (and other debt), and then be done.

Strategic Chapter 13.

[LadyInTheRed]

I have also checked out the trustee link you gave me and the yearly amount was wrong. It is even less! Illinois $47,355
six month would be half that correct?

What is your basis for saying the trustee information is incorrect? It is the U.S. Trustee who is going to be looking to see if you pass the means test, I'd trust their website. Where do you get $47,355? The median annual income for a single person in Illinois for BKs filed after May 1, 2013 is $47,485. Yes, take the annual, divided in half and compare it to your total gross income in the last 6 months. But, keep in mind that, based on what I've read here recently, if you are self employed and do not do business as an LLC or corporation, it may be that your "gross income" is your gross receipts, without reduction for business expenses.

Would any one have a simple sample expenses format they used to present to att?

You are working too hard on this. The attorney you eventually hire will give you a form to fill out or tell you what format he want's the information in. Just worry about secured debt paymets and any necessary expenses that may be out of the ordinary.

[slvnomore]

thanks for all your help!

So far I have prepared for my meeting:
1) Total Income - DONE
2) Total Debt, - DONE
3) List of Creditors - DONE
4) Totals cash All Accounts - DONE
5) Copies of latest bank statements- DONE
6) Total Assets ( General: including NADA) DONE
7) Latest Credit Report -DONE
8) Tax returns for last 4 years. DONE
9) Last settlement offer letter to CCs - DONE
10) copy of OC lawsuit filed, but Not served. - DONE
11) 6 months of total expenses. DONE

[slvnomore]

lol, the paralegal who books for lawyer, said i was the most prepared she had ever seen, and that i did her job!

I asked if that meant i get a discount! ; )

First meeting set up for next week.

The end game of the slavenomorewar has begun.

[slvnomore]

BTW, thanks for all your help and support. I never would have gotten even this far without you guys! ; )

[keepsmiling]

AWESOME

[LadyInTheRed]

lol, the paralegal who books for lawyer, said i was the most prepared she had ever seen, and that i did her job!

I asked if that meant i get a discount! ; )

First meeting set up for next week.

The end game of the slavenomorewar has begun.

Yey!!!

My attorney told me that the spreadsheet I prepared made his job a lot easier. Didn't think until later that I should have asked for a discount.

Now, go make two more appointments!