Question Many questions :(

[sbush]

Hello!

I am considering filing chapter 7 bankruptcy. I have met with an attorney once and I was not confident in him. Here is a little history:

*25,000 in debt to discharge (12k credit cards & 13k car loan)
* I own 2 vehicles and the one I want to discharge, the other I'd like to keep. It's an 05 Camry, I owe about $6,000.
* I own my own home for a few years, no equity
* I am married but debts are in my name only, so my husband won't be filing.
* We make less than the median income for my state
* Not currently behind on any bills...just have NO $ after paying bills.

So, my attorney tells me that even though we BOTH together make less than the median income, we would still have to qualify by doing the rest of the test showing we don't have more than $100 in extra money per month. Question: This is incorrect, right? Everything I'm reading says if you make less than the median, you qualify for chapter 7.

Also, I have a motorcycle in my name that is paid for. Probably worth $2900 or so. I want to sell this to free up a credit card (since I need it to pay normal expenses every month after paying my bills) and buy Christmas for my kids. Question: If I sell this car to an unknown person for market value, is that ok? It will be a cash deal and I'll probably keep the cash to buy the gifts.

Next, is there anyway to get around not losing your income tax refund?

Finally, my fathers checks are deposited into my bank account because he had bad credit and couldn't get a checking account. I am going to be taking him off this month, but this won't be a problem will it?

Thank you to all who have read this far and more thanks to those that will answer my questions!!

[JoeBankrupt33]

It doesn't make sense to do the rest of the means test. He might be referring to schedule I and J, where you show income and expenses that you expect to have after bankruptcy.

Selling the motorcycle should be fine if it is for market value. You mentioned freeing up a credit card with this money, but don't do this. Keep the cash and use it instead, like you mentioned later.

You can potentially save your tax refund, but it depends on what state you are in and what the exemptions are in that state. Let us know where you are.

I don't know about your father. You may need to provide bank statements, and then you would need to show that it was not your income. If, however, you drop your dad then wait 6 months, the problem goes away.

[DebtEnder]

You didn't say what stay you are in so the issue of being a community property becomes an issue.

If you live in the "wrong" state even if he does not file they could still try to hold him liable for your debts and take his assets to fulfill them.

But don't pay off any of the credit cards. Use the money for other stuff, like attorney fees, any back taxes less then 3 years old, food, medical stuff etc etc. The car you want to keep how much is it worth that will determine if you have to worry about it or not.

Selling the bike to a random joe is fine. It only when you "sell" it to family friends for less then market value that you will have issues. The TT would want the money for what that bike should have sold for.

Tax refund depending on state could be protected. However if you know you are going to get one, why drop your exemptions on your w-4 to lowest possible and start taking more home each paycheck. Why give the government an interest free loan? I'd rather keep the cash in my pocket as long as possible imo.

[sbush]

I am in Ohio. I was already told that my husband would be ok with not filing.

The paychecks for my dad are direct deposit and he can provide stubs showing they aren't mine. But, I will be taking him off very soon!

Also, this raises another question...if I stop paying credit cards now and sell the bike, then wait to get my tax refund in Feb (I'll file through Turbo Tax and get it quick) then can I file like in April and be safe? The attorney we met with said if they do want the tax refund,they will only get 1/2 since technically 1/2 would be my husbands.

[DebtEnder]

If you file just a few months in the year and you work to keep the refund small NOW then odds are the TT won't even mess with it. He would have to hold the case open nearly a year to get funds from it and then only a couple months worth at that. The filing date sets when he can set his %.

In theory if you filed now he would have to cut off 45 days worth of taxes off the refund. Most people don't fight the percentage however.

As far as 09 taxes you would have to GET the funds and spend them BEFORE you filed to ensure no issues.

[sbush]

Well, my refund should be a decent size this year...maybe $4,000! I really wanted it to pay down my car, but I can't do that because then I'll have too much equity. I believe Ohio allows $3200. I'm close to that right now while still owing 6k!

I'm paid monthly so I only have 1 more paycheck coming this year. Do you still think I should still increase the exemptions?

So, if I file after getting and spending my refund I'll be ok?