Help!Can't qualify for 7, but no job for 13 (long)

[sprestige]

I have really screwed up and if anyone can help me I would really appreciate it. I had a good job with same company for 16 years. Then got transfered to new office in Vegas and life went to hell. New boss hated me, old boss couldn't understand what "my problem was". They were afraid I would sue and sent me back to home office, but by then, my old position was filled and no place for me. I didn't meet my quota and quit to avoid being fired. I then went back to Vegas where I still had a house (market has tanked and upside down), cashed out 401k and tried to pretend still had paycheck. In one bad weekend, went crazy, convinced myself I could gamble for a living and now everything is gone, and only one interview so far. I am three months behind on the mortgage and have a bad check out (to a casino no less). I have over $100,000 in unsecured debt, plus the house and car. I don't know what to do. My elderly grandmother lives with me and has no one else so I have put her in risk as well. I don't know what to do. I know that a 7 could take care of the unsecured, but what about the house? and to keep it and keep my nana with a roof over her head, I have to keep it and to do that I have to have a job. How long do you think I have before they foreclose and evict?
What are the options if you show past income but have no current income (that six month thing?) Does 401k count towards income? How do I explain gambling when I was obviously in bad shape to start with? To top it off, I spent last year paying others to provide nursing, home health care for another older relative who has now passed on. I was told not to say that was where the money went, for it would trigger tax problems (I didn't take out taxes) and if I have a lot of cash withdrawals more then a year before filing (several hundred a month) will that come up, or do they even go back that far?. Any and all info most appreciated. Thanks

[DeadManCrawling]

Welcome aboard!

This is quite a lot of information, but not quite enough. I think other members will help chip away, as best we can, at your questions.

Here's the first one:

You were transfered to Vegas. From where?

You will be filing under the guidelines and exemption of one or two possibilities here:

Nevada, if you have lived in the state for longer than the required period, which is what, 36 months or 40 months? Someone will know the exact number.

Your previous state if you have lived in Nevada less than the required time.

Or Federal guidelines, if they are either recognized by your previous state OR not recognized by EITHER state.

Sounds confusing, but it's vitally important to ask this one first. It will determine all your "exemptions"-that is, all the things that NO BK judge or trustee can take from you. These "exemptions" are beyond the reach of the court, generally speaking, unless there is some sort of fraud involved.

Gambling is not fraud, nor is it illegal. In the eyes of the courts, for BK purposes it is just one more debt. The lookback period is generally six months, meaning if all this extraordinary activity is at least that far in your past, no one will be eyeing it too closely.

Others here are gamblers. Run searches on the term, and their stories will come up.

Again, welcome,


DMC

[DeadManCrawling]

One other thought---

Money spent on care of an elderly person qualifies as a BK exemption. If you can prove that the money went for that purpose, it may provide you with a good exemption.

Remember, this is not an IRS court. The BK court will want proof, though, and if you can provide it, will allow it.

As far as taxes, well, that's between you and the IRS, if/when they later wonder or ask. Some ppl have suggested that the two courts (BK and IRS) DO communicate. I doubt it. Two arms of one bureacracy that big probably don't connect that often.

DMC

[CATCHMEIFYOUCAN]

Catchmeifyouca Here, I'm a big time gambler but have to leave from work and am due back in several hours. Will have my two cents. Just remember Gambling is no different than being a Shop-oholic (buying lots of luxury goods, etc). And it was never mentioned when I filed. Case DISCHARGED !

CMIYC

[CATCHMEIFYOUCAN]

You don't really need to explain the gambling UNLESS you are asked. On my Bk forms somewhere I listed how much I lost due to gambling and how much I won. Also your financial papers, such at cc statements, bank statements wil give an inidcation where some of your money went! And if comes down to it if you signed up for one of the casinos "player club cards," you can get a what they call a "win / loss" statement from the casino. Like I mentioned, gambling was never an issue in my case, and was never brought up by the trustee. My lawyer new about my gambling and since I live in the state of Virginia, he said "point blank: THERE ARE NO LAWS about gambling in the State of Viriginia. Maybe that was an edge for me compared to living in a state where gambling could be an issue. One may never know, it all depends on your Trustee and different states.

Hope this helps, Best of LUCK CatchMeIfYouCan

[Spartan]

.... Some ppl have suggested that the two courts (BK and IRS) DO communicate. I doubt it. Two arms of one bureacracy that big probably don't connect that often.

DMC

The trustees MAY communicate to the IRS but are not under statute obligation to.

[DeadManCrawling]

Another thing occurred to me, and it is good planning for POST BK for anyone, though I haven't seen it specifically mentioned. Haven't really searched for it, either, but here goes:

This can work for CH13 or CH7, also.

We will, after BK, acquire good credit again for each of us (wife and I).

We will take all assets under one name. All debt under the other. This will require ABSOLUTE trust. I wouldn't do this unless you have stellar relationships, good prospects for the future, and open communications with your spouse. In the wrong situation, this could be the first step onto a highway that leads into the heartland of hell.

Though we hope to maintain a better financial life, we WILL be planning, just in case. Any idea that financial failure was impossible has long since disappeared. We will be read, but work to keep it from happening again.

It is vital that we understand the exemptions BEFORE a problem arises. By the time we realized the depth of our problem, we had missed the chance at years of using the exemptions.

We cashed out home equity to pay creditors, not knowing our equity was untouchable, for instance. We nearly cashed out our IRA, as many people here have unwittingly done.

We will fund out equity and our IRA's heavily when we can, keeping all assets and debt separate from each other.

We will read any credit agreements (hopefully very few) that we sign as though we are lawyers.

We will create a series of offshore shell companies that own one another, and that we, personally, have NO interest in.

These things are all legal, and are wise financial moves, IF they are done properly, with years of time.

Right now it would be called BK fraud.

After BK, and before the next potential problem it's called FINANCIAL PLANNING.

Ridiculous in my mind, but we will play by the rules, bite the rusted bullet this time, and be ready for anything down the road.

Sprestige, it sounds like this would be something you should consider, as well, post-bk.

Also, and I am not chiding you here: The last minute desperation you went through, the search for the magic solution-gambling to try to pay your debts, etc, almost never works. We engaged in some of that, and in the end it only made things worse.

If we have learned one extremely valuable lesson, it is that planning in advance, just in case, is the safest way to avoid some of these gut-wrenching problems later.

-DMC

-DMC

[Spartan]

Yes, it would be wise to engage in asset protection planning. Proceed with due deligence and don't fall for illegal schemes or be taken for a ride by con artists. That would be rather ironic.

I don't know about this splitting asset and liabilities scheme. Doesn't seem to pass the smell taste.

If you are married, use a family limited liability partnership or joint tenancy to protect your asset. That is a tried and true method.

[DeadManCrawling]

I don't know about this splitting asset and liabilities scheme. Doesn't seem to pass the smell taste.
.

I wouldn't touch anything illegal or even unethical.

Here's the idea: Wife and I both have sparkling credit after BK is over, and maintain it perfectly.

We individually will have the ability to purchase homes, cars, etc, based on our own income from each line of work.

SHE purchases the home, any new cars, anything that might have value we don't want subjected to risk in the future.

BK planning, done 6 years or more before a possible problem, in this fashion, is perfetly legal.

I, with MY good credit, hold all credit cards and other unsecured credit in MY name only. She has, perhaps, one emergency card. I carry anything else, in terms of debt.

While we don't anticipate another financial disaster, it is obvious we didn't expect THIS one.

Doing the above, with plenty of time between filings is not only legal, but encouraged by financial advisers and attorneys.

Same with setting up companies that own each other simultaneously, as long as the laws of the nation they are incorporated within are followed. Their laws may (or may not) agree with US law. As long as all income is reported as usual for IRS, no law here is broken, and the companies become essentially untouchable.

Read the stickie: http://www.bankruptcyforum.com/showt...t=how+the+rich

This all MUST be done a period of at least 6 years in advance (US Law) of any BK or judgement suit, so it is NOT at all appropriate for most people here.

Finally, the process can be much less expensive than the 3k-30k cited. I suspect the info may be outdated. So far, it looks like it may cost 3k to do what we need to do-which doesn't include ALL the steps listed, so that may also account for the difference. It looks like about 3-5k (for us)to get set up after bk, and about 700-1200 per year to keep everything protected.

-DMC

[HenriettaHen]

DMC, If a husband ever suggested to me that I take on the secured debt whilst he took on the unsecured debt, I'd think twice about the husband.

There is NO WAY any woman should take such advice.

Now I always read your posts, and you have a lot to say that is very worth reading - but this is a nutty plan and I would NEVER recommend it to any woman. Women have enough problems in life without taking on secured debt in the marriage (not dischargeable) while the husband carries unsecured debt (dischargeable).

What legal documents would you sign to protect your wife in such a situation?

Because she'd better be makin' ya sign some!

[DeadManCrawling]

DMC, If a husband ever suggested to me that I take on the secured debt whilst he took on the unsecured debt, I'd think twice about the husband.

There is NO WAY any woman should take such advice.

Now I always read your posts, and you have a lot to say that is very worth reading - but this is a nutty plan and I would NEVER recommend it to any woman. Women have enough problems in life without taking on secured debt in the marriage (not dischargeable) while the husband carries unsecured debt (dischargeable).

What legal documents would you sign to protect your wife in such a situation?

Because she'd better be makin' ya sign some!

I have some medical issues that are ongoing, and will continue after BK.

We both make above the median income, so the idea is split any unsecured debts onto my side (credit cards, etc) and hold all the assets on her side (house, cars, etc).

Then, SHOULD another problem arise (major back surgery for instance), that is not covered by insurance, or should there be another financial disaster, I can declare BK and wipe out the unsecured stuff, while she holds all the worthwhile assets in her name. With our income, by the time we were even eligible for bk (8 years?), there wouldn't be much in the way of secured debts anyway.

For instance, we don't owe on any secured debt at all, right now, except our mortgage.

After BK we will pay cash for a new place, with little or no loan, from our current home equity.

When I said secured debt, what it really should have said was "nonexempt assets".
For instance, she will be on the deed to the house alone, and hold the cars in her name, plus stock accounts, etc. Really, there won't be anything we owe money on. The only real issue would be if there were a major medical concern or something else in terms of unsecured debt.

Hope it never comes to that, but at least we'd be prepared this time around.

dmc

[HenriettaHen]

"We will take all assets under one name. All debt under the other. This will require ABSOLUTE trust. I wouldn't do this unless you have stellar relationships, good prospects for the future, and open communications with your spouse. In the wrong situation, this could be the first step onto a highway that leads into the heartland of hell."

There now, you said it yourself, DMC - this is a very risky way to do things.

I don't have that much trust in any human being on earth, including HenriettaHen!

I'd balk hard, if I were Mrs. DMC.

[DeadManCrawling]

"We will take all assets under one name. All debt under the other. This will require ABSOLUTE trust. I wouldn't do this unless you have stellar relationships, good prospects for the future, and open communications with your spouse. In the wrong situation, this could be the first step onto a highway that leads into the heartland of hell."

There now, you said it yourself, DMC - this is a very risky way to do things.

I don't have that much trust in any human being on earth, including HenriettaHen!

I'd balk hard, if I were Mrs. DMC.

Well, I agree with your point, and my own first version.

I suppose the trust will be all on my side, considering that all the assets will be in HER name, all the debt in mine.

I am comfortable with it, and she is too. We have discussed the potential legal pitfalls, including divorce.

We have both been divorced before, both been cleaned out by exes, and I think we actually got the damn thing right the second time. I can no more imagine us splitting up than I can imagine my left arm deciding to grow feathers, remove itself from my shoulder, and fly to the moon.

We are incredibly lucky to have one another, which is something that was nearly lost in broken communications because of all this BK stuff.

In any case, it certainly is a risk, even with total confidence.

In evaluating the risks, I guess we decided that this is a suitable risk to avoid "feeling like this" ever again.

-dmc

[alh]

There are better ways to stucture that with the use of various kinds of trusts (the legal entity, not the interpersonal kind). What if the person with all the assets gets sued and loses? You can legally protect and (and hide to most degrees) just about anything. It just may cost some time and money (and you can't do it right before planning BK)

[BKOnce]

Well, look at this way. There are many ways of gambling. So, planning for any future BK= another gamblling game of life, no more no less!

"Expected the unexpected" and ready to bite the bullets if shot.

Live your present precious moments. Don't look to the past as it had PAST (& not come back), and don't look to future as its HAD not come yet (unknown variables).