Question reg means test calculation

[mesa777]

Have a question in regards to the means test calculations. Currently I make just around $150 more than my actual bills run a month. IF I decide to sell a car that has $15,000 of equity and buy a newer car, pay off a small lien on the used car, put down around $4,000 and use the left over funds to live on over the next six months will there be a problem when I go to file and the means test calculations show I am in the minus catagory will this cause a problem? I will probably file a chapter 7 and will probably surrender the house after I file to help free up some funds.... I need some opinions please.... After I pay off the small lien and around a $4,000 down payment I will have around $9,000 left over from the vehicle trade in to help pay my credit card minimum payments, insurance payments and car payments for the next six months or so. I am only trying to put off this filing as long as possible since I made large cash advaces at the end of September 07 for over $35,000.



This situation has been very stressful for my life and am hoping to file in around 6 months and restart my life over. I just don't want a million problems with my bankruptcy filing here.

[lrprn]

Your bankruptcy estate is set on the day you file. Nothing you are considering doing should raise a red flag if you do it far enough in advance before you file. Of course, run this by your lawyer (or ask during free or low-cost initial consultations with several local bk lawyers) to be certain. Every local court has its own customs and practices - this is not the time to be guessing (or taking the word of well-meaning non-lawyers on the Internet either! )

[CindyLou]

lrprn, Wouldn't the profit from selling the car be considered income? That is my thinking. It would then put him with much more diposable income on the means test....

Just my thinking. I could be wrong.

[lrprn]

lrprn, Wouldn't the profit from selling the car be considered income? That is my thinking. It would then put him with much more diposable income on the means test....

I was thinking Mesa would roll any profit made from the car sale right back as a trade-in for purchasing the new car before filing. That way there's no cash generated so there's no extra income for the Means Test.

Is that what you intend to do, Mesa?

Btw, what is the allowed equity on a car in your state? Could doing this push you over the allowed $ limit so you have to pay your trustee the difference to keep the new car?

[mesa777]

In AZ the limit for vehicle equity is $5,000.00... I am going to trade in my current car, worth around $18K, pay off a small lien against it, $5000.00, put a down payment of $4000 on the new car and wait to file for at least 6 months or so... I will live on my current wages as well as the left over money from the sale to help pay the new car payments, insurance costs, credit card bills, ect... I am keeping current on ALL bills up to this point, my credit card bills, first and second mortgage are paid up... Will file in like six months to help avoid creditor calls... I dont know if I can hold out past 6 months or so as I only make $53K a year, have a house payment of $1700 a month and $40K worth of credit card debt...

I dont think its against the law for me to trade in my current vehicle and purchase a new car... I am NOT trying to hide assets, just trying to stay "above" water until I can file without having troubles.... The $30K cash advance that I took out at the end part of September really bothers me.... lost the money gambling... am a compulsive gambler however have awesome credit and will do so until up to the day that I will file for bankrupcty!

[no_it_all]

Excuse me, but <profit> and equity are two entirely different things. They are not related. To wit: You buy a car for 25K...five years later you sell if for 11K..Your <profit> is zero, but your equity is now 11K....no additional income..Just like the junk from your house that you sell on ebay isn't <income>...

[CindyLou]

If you don't file for another 6 months then it won't matter either way.

[mesa777]

What I am worried about is when the means test is calculated and someone asks how I an going to be making up for the shortfall. Will anyone even inquire about that? I really do and am planning on keeping my home once I file for bankrutpcy however will keep the "door" open in case after filing for bankruptcy I am not able to keep up with the payments I would be able to move out without problems as the house and the second mortgage will be added to the original bankruptcy filing.

I never wanted to be in this situation, it sucks that I went this route. Guess I could not find a perfect time to file and possibly loose my home with the mortgage problem and all. At least I am not the only person that may lose their homes.... Its I'd and a million other people... I was worried about getting an apartment after filing however have come to find out that apartments are willing to lease with us with bad credit, they will just ask for a larger deposit, ECT .....

[no_it_all]

am planning on keeping my home once I file for bankrutpcy however will keep the "door" open in case after filing for bankruptcy I am not able to keep up with the payments I would be able to move out without problems as the house and the second mortgage will be added to the original bankruptcy filing.

Well, that certainly sounds like a <plan>....Seriously, you should just dump the house now, rather than later...

[mesa777]

I would love to dump the house however if I dump it now I would not he able to use it in the means test calculations and would be forced to file a chapter 13. I hope to keep the home and after I file I could still leave it after hopefully getting a chapter 7 discharge if I go that route. I was told that after you file and after the confirmation period that you can decided at that time if I want to keep the home or let it go back to the bank. Time will tell plus I am current on the mortgage now.

I would like to keep the house however won't keep it if I struggle to make the payments!!!