I have been a follower of this site for a long time. I appreciates everyone's support and information in regarding BK filings. I will be filing a Chapter 13 as household income is $170K a year is over the standard for a 7 with 3 children in Orlando, FL. I am the higher income earner at $100K/annual and she is at $70K/annual income. I will be the only one filing as we have kept our finances separate (debt and bank accounts) and most of the unsecured debt is in my name. Currently she pays all the bills and I send her $3000/mo. as I have gambling issues (which is the reason for bk and can not be trusted to pay the bills. She uses this money to pay the bills and saves most of her own money. Will this effect the chapter 13, or is it best if I pay the bills directly? As for the marital adjustment, I guess I am a little confused. I understand that her credit cards, auto, personal loans would be include, but how is the adjustment done...her amount spread out over 60 months or what she has been paying monthly? What would if she were to have a recent boat or rv purchase in her name, a recent or 401K loan, or monthly subscription to a theme park. Would the trustee see this as abuse or she is free to do whatever she wants with her money. For the most part we are fairly cheap in everything so don't have a bunch of monthly expenses. Thank you so much!
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Originally posted by TheStiker469 View PostWill this effect the chapter 13, or is it best if I pay the bills directly?
In some cases, the DMI is not enough and some Chapter 13 debtors pay more than their DMI in order to keep/preserve property. Remember, a Chapter 13 is not only voluntary, but it allows the debtor to keep property which would have otherwise been liquidated in a Chapter 7.
Originally posted by TheStiker469 View PostAs for the marital adjustment, I guess I am a little confused. I understand that her credit cards, auto, personal loans would be include, but how is the adjustment done...her amount spread out over 60 months or what she has been paying monthly?
Originally posted by TheStiker469 View PostWhat would if she were to have a recent boat or rv purchase in her name, a recent or 401K loan, or monthly subscription to a theme park. Would the trustee see this as abuse or she is free to do whatever she wants with her money. For the most part we are fairly cheap in everything so don't have a bunch of monthly expenses. Thank you so much!
A Trustee could argue that a non-filing spouse can't just do "whatever" they want with their sole income. The bankruptcy and the Trustee may expect that a non-filing spouse contributes to the household expenses, so at least some of that money comes into play. Think about a mortgage. If a mortgage is more than 33% of the filing spouse's income, a Trustee will likely notice this and claim/show that the non-filing spouse is contributing more to the household expenses that it may appear on paper. Likewise, if the household expenses claimed in the filing exceed some percentage of the filing spouse's income, it is probably that the non-filing spouse contribute more to the household than shown on paper.
I first thought that a non-filing spouse should be able to do whatever they wanted with their money, but that's simply not the case. When a debtor is married, and the other spouse doesn't join the filing, then the household income is scrutinized as to what constitutes the non-filing spouse's true monthly expenses. Could a non-filing spouse go out and buy a boat to the detriment of the household? If you pull back the layers of the boat issue, what would the household had done had you not filed bankruptcy? You would likely have given up the boat. The Chapter 13 bankruptcy demands that as well, unless you can afford to pay the creditors the value of the boat during the Chapter 13. The interesting thing will be how those extra toys are titled and how the Trustee decides to treat them.
I would say that it depends on too many things. If you're in a 100% plan, the non-filing spouse's income is not an issue at all. The problems appear to present themselves when there is little to no DMI going to the unsecured creditors. The Chapter 13 Trustee may then "feel" like the non-filing spouse's contributions to the household are too small and something must give.
Chapter 7 (No Asset/Non-Consumer) Filed (Pro Se) 7/08 (converted from Chapter 13 - 2/10)
Status: (Auto) Discharged and Closed! 5/10
Visit My BKForum Blog: justbroke's Blog
Any advice provided is not legal advice, but simply the musings of a fellow bankrupt.
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Originally posted by TheStiker469 View PostThat makes a lot of sense. Thank you so much for taking the time to answer!
Chapter 7 (No Asset/Non-Consumer) Filed (Pro Se) 7/08 (converted from Chapter 13 - 2/10)
Status: (Auto) Discharged and Closed! 5/10
Visit My BKForum Blog: justbroke's Blog
Any advice provided is not legal advice, but simply the musings of a fellow bankrupt.
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