Preparing to file

[manglicmot]

Hi all, I found this forum a few hours ago and have been searching the info. I have a few concerns I hope someone here can address. I have not yet contacted an attorney, I want to have all of my ducks in a row before I walk into an attorney's office. My total debt is $40K including a $26K car loan. The rest is unsecured credit card and line of credit debt.

1. I filed my taxes on line last year and I printed out my 1040 when I completed it. Can I use this when I file, or do I have to go get a "transcript"?

2. According to the census.gov site the median income in California is $61476. Mine is well below this, last year my adjusted gross income was 36019, but it will be a little higher than that this year, probably about $39K. First of all, do I have the correct median income for California for BK filing purposes? And secondly, will I still have to take a means test if I am below the median?

3. Bankruptcyaction.com says that must complete an approved credit counseling course BEFORE filing and I also have to complete an approved financial management course. Should I wait until I contact an attorney and let him get me into a course, or should I go find one on my own and do it before I contact a BK attorney? It appears as though all of the credit counseling courses are affiliated with BK attornies anyway.

4. Can someone fill me in on reaffirming a debt? I want to reaffirm my car loan so that I can keep my car. What possible obstacles are there to this? I have a 0% 72 month loan with Ford, will I be able to keep my 0%?

The reasons I'm in such a mess are because I had to buy a new car unexpectedly, my old one would not pass the smog check, and my hours have been cut back at work. The interest rates I'm paying are astromomical, my Washington Mutual credit card is 32%, my GE Money line of credit is 52.855%, yes 52, that's not a typo. To hell with these crooks, they are bleeding me dry. And no, I do not have bad credit, my FICO was 733 last month. I have had a few late payments, I have never been in default.

My bank account is drained, I hope that any attorney I contact will allow me a payment plan. I would assume that many of the people who contact them are in bad shape financially and need a payment plan.

I am planning on going to Pacific Law Center in San Diego CA, for no other reason than they have a lot of commercials on televisin and a big stick on ad on the front of the Yellow Pages. Does anyone know anything about them? Does anybody in the San Diego area have a reccomendation?

[CATCHMEIFYOUCAN]

Hi !

Hi all, I found this forum a few hours ago and have been searching the info. I have a few concerns I hope someone here can address. I have not yet contacted an attorney, I want to have all of my ducks in a row before I walk into an attorney's office. My total debt is $40K including a $26K car loan. The rest is unsecured credit card and line of credit debt.
Ducks: at least 3-6 months of paystubs (im filing in VA - i had to have 6 months); best to get transcripts .. its free through the IRS .. i had to get 2 previous years; credit counseling certificate (i took mine the day before i called the attorney - i got an approved ccs info off his website!)

1. I filed my taxes on line last year and I printed out my 1040 when I completed it. Can I use this when I file, or do I have to go get a "transcript"?
I would get transcripts (i called the IRS and ordered them for free sent through the mail within 2 weeks) best to have them ready for filing

2. According to the census.gov site the median income in California is $61476. Mine is well below this, last year my adjusted gross income was 36019, but it will be a little higher than that this year, probably about $39K. First of all, do I have the correct median income for California for BK filing purposes? And secondly, will I still have to take a means test if I am below the median?
sounds like you mignt be in the clear to file a 7, but i think you still have to take the means test to see IF you have any disposable income. that means test can be contradicting to schedules I and J


3. Bankruptcyaction.com says that must complete an approved credit counseling course BEFORE filing and I also have to complete an approved financial management course. Should I wait until I contact an attorney and let him get me into a course, or should I go find one on my own and do it before I contact a BK attorney? It appears as though all of the credit counseling courses are affiliated with BK attornies anyway.
after i took the course which only costs me $50, it showed i had no disposable income to be able to set up any kind of payment plan using the counseling service, i got a certificate that i completed the course which i gave to my attorney

4. Can someone fill me in on reaffirming a debt? I want to reaffirm my car loan so that I can keep my car. What possible obstacles are there to this? I have a 0% 72 month loan with Ford, will I be able to keep my 0%?
it all depends on your state, i had just bought a new car a month before i filed, with this dealership i just have to keep making payments and ON TIME, not need for me to fill out any re-affirming paperwork, check with your attorney


The reasons I'm in such a mess are because I had to buy a new car unexpectedly, my old one would not pass the smog check, and my hours have been cut back at work. The interest rates I'm paying are astromomical, my Washington Mutual credit card is 32%, my GE Money line of credit is 52.855%, yes 52, that's not a typo. To hell with these crooks, they are bleeding me dry. And no, I do not have bad credit, my FICO was 733 last month. I have had a few late payments, I have never been in default.
i feel ya! my other car got flooded so i had to buy a new car myself !

My bank account is drained, I hope that any attorney I contact will allow me a payment plan. I would assume that many of the people who contact them are in bad shape financially and need a payment plan.
most attorneys have a payment plan, mine did

I am planning on going to Pacific Law Center in San Diego CA, for no other reason than they have a lot of commercials on televisin and a big stick on ad on the front of the Yellow Pages. Does anyone know anything about them? Does anybody in the San Diego area have a reccomendation?
BE CAREFUL !

CATCHMEIFYOUCAN

[manglicmot]

Thanks for the fast reply, cmiyc! It's 3 AM over here on the left coast, I have been reading this board for a few hours now. I see you've posted a lot here, a few others here are very generous with their time too.

[Minnymouth]

Let me suggest you use the "search" feature here on the forum to look up different topics you have questions about..... exp..... reaffirming........ key in reaffirming and it will bring up all posting regarding reaffirming on homes and autos.....

Reading previous post of your topics and questions will help a great deal.......

Welcome aboard our forum....

[SinkingFast]

Here's a link for you,...........

http://www.usdoj.gov/ust/

There's a box about BK Reform, upper right.

The DOJ approved list of Credit Counseling Agencies and Debtor Education Course providers is there. You get the Credit Counseling Cert pre filing. That Cert is good for 180 days. Filers must complete Debtor Education within 45 days of the 341 Meeting. You must use a DOJ approved agency for both.

Also, there's a link for the Means Test. There've been some recent changes so you'll have to select the menu for people filing on or after 10/1/06.

If you're below the Median, you fill out Form B22A. You stop on Line 15 after you compare your real income to the Median Income allowed for your State.

Other expenses are by County. Auto Expenses may be by "region" depending on where you live.

There's several stickie threads at the top of this Section of the Forum. Take a look at those. There's lots of valuable information in them.

[manglicmot]

I found an ad for chapter 7 bk for $785 complete incuding court costs. That's quiet a bit cheaper than the fees I've seen others here pay. Do you think it's legit? Here is the firm's site: http://www.stacylawfirm.net Seems legit to me, but maybe someone here can smell a rat better than I can.

Now, for having the last six months of pay stubs, did anyone here NOT have six months worth? I don't have them on hand, but maybe I can get them from HR. The thing is, I don't want to bother them if it's not necessary.

[SinkingFast]

Personally, I'd stay away from the "Mill" type BK firms. But that's just me.

There have been more than a few attny "horror stories" posted here where people have real problems with their case or their filing and the attny they hired is too busy to address their issues. Many people have commented they cannot get their attnys to respond in any way after the 341.

And yes, we did pay a bit more, but I feel we've gotten our money's worth. Every phone call and email have been answered. Either by our attny or his paralegal assistant that was handling our case.

BK is HUGE. It's personal. It's financial. And, it's FEDERAL.

You want to be sure you select an attny you are comfortable with. An attny that's attentive to you, your needs, and your case. In this particular instance, cheaper may not be better. You may get what you pay for.

You won't need 6 months worth of pay stubs to file BK. Our attny wanted them on file just in case our BK got audited. He wanted everything on file, just as a CYA for the future. All of our stuff was scanned into their system for future reference. Hopefully, it will not be needed.

[manglicmot]

I have also found ads for attornies who do BK only, I guess they would be the most likely to stay with me in case a problem arises. The only problem I anticipate is how the purchase of a new car and re-affirming the loan will affect my filing. I want to make sure my attorney will be able to handle any problems and stay the course with me. I won't even be going to an initial consultation until December 18, which will be a week more than the 90 day window for credit card purchases. So I still have time to browse around.

You guys have no idea what a relief it was to find this forum. Well on second thought, you probably do.

[SinkingFast]

You guys have no idea what a relief it was to find this forum. Well on second thought, you probably do.

Yep!! I hear ya there, Mangli!!

When we knew we were in financial trouble, the first thing we did was hit the Net and research. In checking out the New Law, we found out about Credit Counseling and decided to have a DOJ approved CCA look over our finances. See if they saw any alternatives for us. They didn't.

Next stops were to start researching the Law and find a Forum where people discussed their experiences. I found other Forums, but none were as good as this one.

[manglicmot]

Crimony - here is something I had not considered before: If I re-affirm my car loan, can that be viewed as "preferential treatment" to that lender? I've read that you are not permitted to pay off one creditor and try to discharge the others. But would reaffirming come under this as well? What would the consequences be if I continue to pay a car loan AFTER discharge WITHOUT reaffirming it? In the event I am audited post-filing, could they reopen the case?

The more I think about this the more complicated it seems, but I want to get everything out on the table before I get to the attorny's office.

[SinkingFast]

Payments to Secured Creditors, mortgage, auto loan, etc., are not considered Preferential. You can keep on making your car payments and reaffirm as well.

Preferential treatment comes in where you pay one Unsecured over another.

[manglicmot]

I'm very close to deciding NOT to file. I have an account with my stockbroker that currently has $1700 cash in it. I assume that it will be siezed whether I file 7 or 13.

I think I would have trouble showing that my expenses leave me less than $100 per month. I *can* show that I spend more than I make, but only if I show that I spend $120 per week for weekend fun, including drinks and taxi cab rides. These show up as ATM cash advances from my checking account and I fear it will raise a red flag with the trustee or judge or whoever it is that does that sort of thing, (still reading and learning). Indeed, there is more money going out of my bank account than coming in.

I wonder if I should just take the cash out of my brokerage account and continue paying my credit cards. I'm sure another red flag will be raised when I show that I closed out that account on a filing, so the more time I put between a filing and the time I closed that account, the better it will look.

I'm really just terrified of having this thing blow up in my face.

I also have about a $350 tax refund coming my way.

[lrprn]

Hi, manglicmot....my replies to your questions are below....

I'm very close to deciding NOT to file. I have an account with my stockbroker that currently has $1700 cash in it. I assume that it will be siezed whether I file 7 or 13.

About 100% likely in Ch 7, and very likely in a Ch 13 because every trustee typically is interested in anything over $1000 cash, some trustees even less. This is a good question to confirm with a bk lawyer who knows your bk district's practices with stock and cash accounts.

I think I would have trouble showing that my expenses leave me less than $100 per month. I *can* show that I spend more than I make, but only if I show that I spend $120 per week for weekend fun, including drinks and taxi cab rides. These show up as ATM cash advances from my checking account and I fear it will raise a red flag with the trustee or judge or whoever it is that does that sort of thing, (still reading and learning). Indeed, there is more money going out of my bank account than coming in.

If you are still continuing to spend almost $500/month on voluntary weekend "fun" and are teetering on the edge of bankruptcy, then you need to give more thought about the amount of belt-tightening and personal sacrifice that is necessary to get your spending consistently under what you make.

The hardest part of getting spending under control is giving up what we don't really want to give up. That's how most of us end up in bk - we don't give up very much if anything until we are forced to. You still can get your finances back under control without filing if you use your stock account AND cut your weekend and other discretionary spending way down until you get yourself out of the hole. Not saying it's easy....it certainly isn't. But the payoff - solvency and less financial stress - is so worth it!

Filing bk should be a last resort when you have belt-tightened down to basic subsistence level with no extras and still can't make it. Think long and hard before stepping over the bk line because once you do, there's no going back.

Good luck and keep us posted on what you decide to do, ok?

[manglicmot]

I just wanted to say again what a great forum this is. I'm a "mouse potato", I spend a lot of time on line and I have joined a lot of forums, cats, stock market, weight lifting, on and on. If I had to rate all of the boards I've belonged to over the years, I would rate this one the best for quality of information and good people.

Ironically, after finding this board and digging through all the info I found here and on all the sites that I found from here, I have decided NOT to file. I just started looking for a part time job, it's going to be tough finding one to fit my schedule, but I'm going to try. I'm cutting back a *~little bit~* on expenses, such as drinking the house wine instead of the premium, going out a little later so I drink less, and cooking my own lunches instead of eating out.

Although, if I don't eventually get that second job or make some money trading the markets, I will have to file. But I have a few months before I'm totally out of money and I'm confident I can work things out.

And even if I can't work something out soon enough, I can start paying my bills with my credit cards, I still have about $15K of credit open. (Just kidding!)

[CindyLou]

You will not need to reaffirm with Ford Motor Credit. They will transfer your account to the "bankruptcy department" once you file, but nothing will change as long as you make your payments within the 10 days grace period. You can call them and verify, but I just filed a year ago and all was very very smooth. They are very BK friendly and would NOT reaffirm if you don't need to and I don't think you do. Keep us updated.