Sadly I think I have to file for BK again.

[Klesko]

So filed BK7 in Sept 2009 and was discharged in Dec 2009. I know its 8 years between filings so I would have to wait to file later this year. My first BK was due to bad house loan, medical debt and bad car loans. This time around I just let things get out of control. We had a 2nd kid and the wife wanted to stop working so income dropped some and we just started overspending on stuff. I didn't notice how bad things are until now really, more of a head in the sand mentality really.

So here are the numbers.

Income 127k (5k-18k bonus depending on numbers)

Debt Summary
Wife credit cards 80k all about to charge off.
My credit cards+installment loan 143k all current
Cars 50k loans all current (2 leases, 1 purchase)
House 240k owed its current (280k value)
IRS 28.5k in payment plan

I want to keep the house and 2 cars. House is a FHA loan at 3.25 and a reasonable payment.

So basically I just need to dump the credit card and installment debt and I will be fine. I have adjusted my withholding's to really high to increase my take home and reduced my 401k contribution to 0.

So what do you think? Should I go down the route of a BK7 or try something else?

[krielly]

I can't imagine you will qualify for a Chapter 7 with that income. It would seem you're more likely looking at a Chapter 13. Others will chime in.

[LadyInTheRed]

I agree that a Chap 7 seems unlikely. But, consult with BK attorneys before you give up on the idea.

Change your tax withholding back to where it should be! It's easier to pay those taxes now instead of being short and having to pay penalties and interest later. If you can't make ends meet, it's better to default on the credit cards and start considering Chap 13 if you can't qualify for a 7.

[Klesko]

I agree that a Chap 7 seems unlikely. But, consult with BK attorneys before you give up on the idea.

Change your tax withholding back to where it should be! It's easier to pay those taxes now instead of being short and having to pay penalties and interest later. If you can't make ends meet, it's better to default on the credit cards and start considering Chap 13 if you can't qualify for a 7.

I did the means test, its been a while since so I am not sure on some things.

It allowed me to deduct the normal things and my secured loans from my income house, cars. Then it asked for taxes paid and I put that in what it would be with me resetting them back to normal. With this I am not that far off honestly. But I did not see a place to put in my 401k contributions, which if I maxed out would put me well below the threshold and allow me to qualify.

This is the one areas I found

Other Necessary Expenses: involuntary deductions for employment. Enter the total average monthly payroll deductions that are required for your employment, such as retirement contributions, union dues, and uniform costs. Do not include discretionary amounts, such as voluntary 401(k) contributions.

It specifically says not to put in 401k contributions. So are those not part of the means test anymore?

[LadyInTheRed]

No, voluntary 401k contributions are not allowed on the means test.

Keep in mind that monthly taxes on the means test should be your actual annual tax liability divided by 12, regardless of what your withholding is.

[bankadamus]

Here's a thought, would 401k loans qualify as a mandatory deduction to help you qualify for the means test?

[BKAttyMI]

A Chapter 13 would help you with the tax debt, you should speak to a bankruptcy attorney that does a lot of 13s.

[justbroke]

Here's a thought, would 401k loans qualify as a mandatory deduction to help you qualify for the means test?

401(k) loans are not "mandatory" when it comes to bankruptcy. They are no different than other unsecured creditors. While they can paid through payroll deductions in a Chapter 13, as soon as they are paid off, the rest will go to your DMI.

Additionally, very very few districts allow both a 401(k) payment and a 401(k) contribution during a Chapter 13. It's typically one or the other. Even if you do not have a loan payment, the Trustee will also scream over any "voluntary" contributions that exceed the company match. (e.g. if your company matches the first 6%, you can only contribute 6%) In some districts, the Trustee will scream over ANY voluntary contribution regardless of whether there is a loan or not.