New to Forum and Need Some Advice

[southernbelle]

I am new to this forum and thank God I found it. I am interested in any input anyone can give me. Here is my situation:

I am 36 years old, married but filed for divorce about 3 months ago in Louisiana (will become final in December). I filed Ch. 7 under the old rules about 10 years ago which was discharged without any problems. I owned two small businesses (sole proprietor in my name)which were being run by the soon-to-be ex-husband.

I found out about two months ago (when I decided to close both businesses) that there were lots of unpaid bills, unpaid taxes for the business, liens on my home (that I bought prior to marrying him, but still had a prenum. agreement), loans I didn't authorize and general financial irresponsibilities on his part .

I have a job where I earn over the state average (according to the Means Test online) and managable personal bills. Personally, I have about $14k in cc debt, two unsecured loans totalling 10k and two mortgages which total $76k. With the added business debt, I can't afford to live on what I would be left with at the end of the month. I barely squeak by when I checked the online Means test with respect to being able to keep my home (almost no equity when liens are taken into account) and car (that is 4 years old and paid for but only in fair shape - checked Kelly Blue Book). There is a small amount of equipment from the business that is in storage, but I don't have any other assets or items of value (just sold my wedding ring to pay bills about 2 days ago).

My questions are:
1. If the prelim. on-line Means Test yields a result of me being able to file Ch. 7, are there any factors the courts take into account besides qualifying via this test to force you to file Ch. 13 like equipment that I will gladly give to them to liquidate to help satify creditors?

2. In the beginning when I thought the amount of bills and people owed was managable, I took out two loans to satisfy the debt ($10k), but when the bills kept rolling in, I realized I don't make enough to handle them then started considering Ch. 7/13. Since these loans are new - within the past 2 mos., can I include them in the Bk if I can prove 100% went to bills?

3. I am in the process of refinancing my home (that's how I found out about the liens) to cover some of the debt and consolidate (when I thought it was still possible to save my credit - current score 707). The bank is pushing forward. Should I talk to a lawyer first about my options and put the bank on hold and does refinancing your home look bad before filing?

4. Can anyone give me some insight as to what the Trustee looks for and how hard they look at your bank stmts (like eating out, etc.). Prior to considering filing Ch. 7/13, it was business as usual for me, but no huge purchases. I just don't want anything to look suspicious, but how much do they allow you to explain and are Trustees reasonable people or representatives for the creditors?

5. Is all of my personal stuff up for grabs to be possibly liquidated or are some things off limits (like tv's etc.)?

6. Should I stop paying the bills I've already started paying now that I've decided I would like to file Ch 7/13.

7. In Ch. 13 is it true they leave you with a few bucks at the end of the month to live on and take everything else. Are tax bills included in this amount you hand over to them?

Sorry for the lenghty questions. I appreciate any help that can be contributed. Thanks in advance.

[lrprn]

Welcome to BK Forum, SB - glad you found us!

1. If the prelim. on-line Means Test yields a result of me being able to file Ch. 7, are there any factors the courts take into account besides qualifying via this test to force you to file Ch. 13 like equipment that I will gladly give to them to liquidate to help satify creditors?

If the Means Test shows that the last six months lookback on your income from all sources show that you make less than your state's median income for your family size, then you can file Ch 7. If you have to continue on to the next stage of the Means Test, if it shows that you have more than $100/month disposable income, then you head into rest of the Means Test and the Schedules.

You don't get to decide which chapter you file - the outcome of the Means Test and (if needed) Schedules do. Assets like personally guaranteed business equipment are a part of the Means Test and Schedules and figure into the outcome. However, whether you have them and are willing to give them up has nothing to do with which chapter you file.

2. Since these loans are new - within the past 2 mos., can I include them in the Bk if I can prove 100% went to bills?

It would be far better to wait for at least three months to file and make a few payments on these loans before filing as well to show good faith. Also if you have receipts for where the money went, that's very helpful also. The more time you put between these loans and filing, the better.

3. Should I talk to a lawyer first about my options and put the bank on hold and does refinancing your home look bad before filing?

I would talk to 3-4 bankruptcy lawyers before deciding anything. Most give free initial consultations. Bring in all your financial information (personal and business) and see what your best options are.

4. how much do they allow you to explain and are Trustees reasonable people or representatives for the creditors?

You only meet with the trustee once during your 341 meeting. The 341 meeting only lasts about 5 minutes and are not for you to explain your situation - they are for your trustee to ask you any questions he/she might have about your case. Your lawyer will make sure that you are ready for the meeting and are prepared to answer any questions that may come up.

5. Is all of my personal stuff up for grabs to be possibly liquidated or are some things off limits (like tv's etc.)?

No. Typical household goods - clothes, furniture, appliances, etc - are almost always covered by your state's exemptions.

6. Should I stop paying the bills I've already started paying now that I've decided I would like to file Ch 7/13.

Do ask the lawyers about this first. If you are absolutely certaint that you are going to file, then you can stop paying UNSECUREDS. You need to keep paying for any assets (house, car, etc) that you hope to keep. Home and car payments must be up to date to file Ch 7. You can be in arrears if you file Ch 13.

7. In Ch. 13 is it true they leave you with a few bucks at the end of the month to live on and take everything else. Are tax bills included in this amount you hand over to them?

Ch 13 is designed to take ALL of your disposable income showing when you file every month. There's no consideration in the plan for savings or any extra built in for emergencies. Three or five years is a long time hoping nothing bad will happen.

Taxes owed from past years can be included in Ch 13 and paid off that way.

Hope this helps, SB! Again, welcome to the forum!