New Here, New to BK, in total shock about it all.................

[jixxxer]

Well its come to the point where i cant pay all my bills plus pay for neccessities to live..........I have a family of 5; Had a two year old at 40 that really turned our life upside down financially.......A daughter whos a Sr in high school.......very expensive.....So i went talk to a bk attorney in my city. very nice guy, actually made it sound almost to ez.......which made me skeptical but the firm is know for and only do bk so idk. Our income is around 100,000 and still cant make it. I just cant get over that! Next decision is to file ch 7 or 13? Only real assets i have is my daughters car worht about 3k and riding mower worth about 2500......

i have about 30k in cc debt........my other question........is it smarted to try and get my retirement out or just file bankruptcy?

[LadyInTheRed]

Leave your retirement plan alone!! Most retirement accounts are exempt in BK. Here's an article that discusses exceptions: http://www.nolo.com/legal-encycloped...-13-32410.html. If you have a retirement account that falls in one of the exceptions, find out if you can use another exemption to cover it.

In most cases, getting through bankruptcy is pretty easy if you have a competent attorney. Did the attorney discuss Chap 7 vs. Chap 13? If not, he may have made it sound a bit too easy. If so, did he say whether he thought you would qualify for a Chap 7 discharge?

If you have a chance at Chap 7, then file Chap 7 unless you have a good reason to file Chap 13. The most common reasons to prefer a Chap 13 is that you are behind on secured debt payments that you wouldn't be able to catch up on before a Chap 7 discharge, you have non-exempt assets that you want to keep, you have non-dischargeable debt that you need to catch up on (taxes, for example), or you have an underwater 2nd mortgage you can strip in a 13.

[jixxxer]

He did discuss both. and said i was on the fine line for ch 7 based on income........he did say here in La. thats 401k is considered income; so he just needs me to bring him some info and he wld be able to let me know for sure if I cld go ch. 7; which i think wld be best......As of now im not behind on anything but i will be after this month; I had been using a trul line of credit to supplement our incoe to pay min payments to credit cards. so I m pretty much all maxed out! No where else to turn.

[jixxxer]

STill havent decided to file ch 7 or 13...........the lawyer did say they may take my daughters car, my mower and my son has a dirtbike. My daughter is starting college this year so she def. needs a car to go to school. Also not completely sure we can pass the means test. So lets say i do ch 13; from what a friend is telling me, u have to go thru your trustee for certain purchases? Income tax can be taken and so can Company Bonuses???? Our car is old, we may need another one b4 the 5 years is up. Also we owe 30k or a lil more and the lawyer is saying he can wipe it down to about 8k....does this sound about right? All this is really straining our family also,,,,,,,,,not fun!

Also, how long does the process take and how afterwards is everything over and done with?? Sounds like some goes on for years?

[LadyInTheRed]

You don't need trustee approval to make purchases, but you do need trustee or court approval to incur debt while in Chap 13. Bonuses are income. If you have guaranteed bonuses, those will probably be included in the calculation of your plan payment in which case you will be able to keep them. Bonuses not anticipated as part of the calculation of your plan payment may have to be turned over to the trustee depending on the amount, your plan and the trustee's practices. You should ask your attorney about how bonuses will be treated in your situation.

Whether you will have to turn over income tax refunds to the trustee also depends on local practice and/or the details of the Chap 13 plan.

Many debtors buy cars before filing Chap 13 so that they will have reliable transportation during the BK. But, you need to make sure the resulting car payment will not make your plan unmanageable. If you want to buy a car before filing, first check with your attorney to find out how it will affect your filing.

If your attorney says the debt will be down to about $8K, it is probably his estimate of your total plan payments based on your disposible income. That may change when he prepares the petition. It may change again if there are objections to the plan. No one can tell you what sounds right without detailed information on your income and expenses.

The strain on your family should be reduced as soon as you file assuming you do not try to keep assets you can't afford to keep and you are willing to live within your means.

Your plan payment will likely be less than your unsecured debt payments. The entire process from the date you file Chap 13 to discharge should not take much longer than 5 years. The time to plan confirmation varies by court and by case. Once you file, other than making plan payments, mostly all you will do is wait as the process moves along.

[jixxxer]

I read the 12 myths on bk........and the last one...about charging b4 filing......we have charged recently......but honestly, if we didnt, we cldnt buy groceries....so im a lil concerned that they will see we have charged right b4 filing?????

[LadyInTheRed]

I assume you mean: "I can max out all my credit cards, file for bankruptcy, and never pay for the things I bought. That's called fraud, and bankruptcy judges can get really cranky about it. The trustee in your case will review all your purchases right before your filing. He knows what to look for. "

I don't entirely agree with how that is put. Yes, it is fraud to max out your credit cards with the intent to file BK so you don't have to pay. But, the trustee is not going to review all of your credit card purchases unless he has some reason to suspect you are hiding assets. My trustee never ask for credit card statements. If you run up a large amount of credit card debt right before filing, the creditor may object to discharge of that debt. The debt is presumed to be not dischargeable if it is from charges over $650 to one creditor for luxury goods or services within 90 days of filing or for cash advances of more than $950 from a single creditor within 70 days of filing. If the debt doesn't meet those criteria, then the creditor has to prove that charges you made were fraudulent. That is hard to prove and the numbers would have to be pretty high before a credit card company would bother filing an adversary proceeding.

Buying groceries on credit before filing is not going to get you into trouble. But, if you are going to file BK, you should stop paying your unsecured dischargeable debt and use the money to cover your living expenses. If you can't make ends meet after stopping payments, bankruptcy may not help you.

[jixxxer]

thanks for all your replies! Just got back from attorney and was told we cannot file ch 7, so its gotta be ch 13 r nothing.....im bummed.