New to this...

[jit]

Hi all. First of all, I'm glad I stubmled upon this site, great site!

Next, We've decided to file for bankruptcy, and I was hoping to get some direction. We've not met with an attorney at this point, however, we are researching them, and plan on scheduling initial consultations in the next week.

First of all. We have one child, and another on the way, due in January. Based on this fact, we wanted to hold off on filing until after the baby is born. Mainly, because this increases our exemptions for housing, utilities, etc, and pushes almost to Chapter 7, instead of Chapter 13. The kicker is, we can't pay the debt as it is. Should make good faith payments until we actually file? Or is it better to just stop paying all together?

Secondly, I have been considering purchasing life insurance policy for myself, how would that look to the trustee? This would be exempt when calculating means test, correct? I'm looking at Term Life. This is something I feel strongly about having for my family, especially with 2 young children.

Also, the exemption for mortgage payment is about half of what we actually pay. Do they take this into consideration?

Finally, currently our property taxes on our house are about $50 per month, but in the next 6-12 months they will obviously go up, probably around $250 a month? Will they consider this, or only consider what I'm actually paying at the time? The wording is the average over 60 months.

Last questions, I promise! If we're forced into Chapter 13, which from running the numbers, we probably will be very close, how hard is the process to convert to Chapter 7, at a later date?

Thank you all for your time.

[Danielle1981]

From what I read is that they only throw you into a 13 if you have a 100 or more in disposable income. I might be really off base though. Hopefully someone else can come along and give you more info.

[anonymuse]

Hi all. First of all, I'm glad I stubmled upon this site, great site!

Next, We've decided to file for bankruptcy, and I was hoping to get some direction. We've not met with an attorney at this point, however, we are researching them, and plan on scheduling initial consultations in the next week.

Consultations are usually free, so plan on at least 3.

First of all. We have one child, and another on the way, due in January. Based on this fact, we wanted to hold off on filing until after the baby is born. Mainly, because this increases our exemptions for housing, utilities, etc, and pushes almost to Chapter 7, instead of Chapter 13. The kicker is, we can't pay the debt as it is. Should make good faith payments until we actually file? Or is it better to just stop paying all together?

A lot of people will tell you not to pay anything since you'll be throwing money away for a debt that will be discharged; however, here is my rationale for paying a little to it, but not the minimum. First, it shows that you were struggling for awhile before deciding on BK. If you are going to start doing some other pre-BK planning, such as buying life insurance (which is a wonderful thing to do), then it doesn't coincidentally occur at the exact same time as when you stopped paying your unsecured creditors. NOTE: Many will disagree with me here, but this is just my opinion.

Secondly, I have been considering purchasing life insurance policy for myself, how would that look to the trustee? This would be exempt when calculating means test, correct? I'm looking at Term Life. This is something I feel strongly about having for my family, especially with 2 young children.

A second child is coming--that is an extremely smart and normal thing to do. That is a perfectly justifiable expense (it's not like you're going to go for $100 million dollars coverage.)

Also, the exemption for mortgage payment is about half of what we actually pay. Do they take this into consideration?

Finally, currently our property taxes on our house are about $50 per month, but in the next 6-12 months they will obviously go up, probably around $250 a month? Will they consider this, or only consider what I'm actually paying at the time? The wording is the average over 60 months.

When you do schedule I & J (Income and Expenses), you will be looking at current & future expenses, so that is where you will be able to take care of the increase in property tax.

Last questions, I promise! If we're forced into Chapter 13, which from running the numbers, we probably will be very close, how hard is the process to convert to Chapter 7, at a later date?

Thank you all for your time.

Just a couple of quicky questions for you:

What state do you live in?
What is your income?
Do you have any equity in your house?
Are you behind on your mortgage payments?

[jit]

Thanks!

Just a couple of quicky questions for you:
What state do you live in?
What is your income?
Do you have any equity in your house?
Are you behind on your mortgage payments?

Thanks for the reply. Some good advice.

I live in Ohio and make about 70K. I don't have any equity in the house, and I'm not behind in the mortgage. I definitely want to keep the house and our car (only 1).

[anonymuse]

In Ohio, with a family of 4, the median family income is $65,126 so you are about $5K over. However, that's only about $420 per month over--maybe you have expenses on Schedule J that will wipe that out.

[jit]

Yes, I'm pretty sure I have some, such as internet and telephone, which is used for work. Then if I had a life insurance policy, that will help as well. Plus some other secured debt.

I'm pretty sure I know the answer to this already, but I'll ask anyways...Student loans are considered unsecured, correct? Do those factor in at when determining monthly exemptions?

[Danielle1981]

You can't discharge student loans, but yes they are considered unsecured.

[lrprn]

You can't discharge student loans, but yes they are considered unsecured.

Yes, Danielle is right - student loans cannot be wiped out by filing Ch 7 or Ch 13 bankruptcy.

Nolo.com does a good job explaining all the possible options of what to do when you can't pay your student loans - http://www.nolo.com/article.cfm/Obje...3/208/135/ART/

Good luck - hope this works out for you!