If I pay my car and house insurance in advance meaning paying it up for the year will that be taken off as a monthly expense when filing for chapter 7? I have extra money over what is allowed as exampt and would like to use it on things that make since. I am out of work and do not know when I will find a job.. Thanks in advance for any input you may have.
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You will have to check your state laws for exemptions, but it is my understanding that you have a $$$ amount of value in your house that is exempt.
So if your house is worth $200k and your mortgage / second etc. total $180k, you've got $20k equity where you can have up to $300k here in MN.
So one idea would be to pay down your mortgage ... but please check your state exemptions and if you are going to use them or fed exemption numbers. -
Maybe I aksed the question wrong, I am in Mass and I know I can exempt up to 10,000 dollars as homestead but what I wanted to know is if I pre pay some bills like car and house ins maybe house taxes will that mean I won't be able to put them down as an expense? since I am looking to pay them off for the year and have one less expense?Comment
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I understood you - I've been wondering the same thing too. I need the expenses in order to get my DMI down to qualify for Chapter 7 -- but I also need to use up some of my non-exempt cash as well.
I would think you could still use it since monthly expenses can be determined by dividing by 12 -- but I really am not sure. Hope someone knows.04/01/10 - Hit rock bottom and knew we were going to have to file for bankruptcy and surrender our home.
12/14/10 - Filed Chapter 7, 02/09/11 - 341 Hearing, 04/14/11 - 
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exactly - Thanks smmdem.. Hopfully someone can answer this.Comment
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Why the rush to file if you have no job? Use that money for ordinary living expenses.
In general, unles you have a history of paying bills far in advance I'd think you're going to run into a preference issue if the trustee wants to push it.
I'd not do it unless, your lawyer says it'sOK.Comment
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Yes, you can still list it as an expense even if you prepay it. After all, you need to start saving up so you can pay it in full next year.
There is no rule that you HAVE to make monthly payments in order to count an expense.
Filed Chapter 13 on 2-28-10. 341 completed 4/14/10. Confirmed 5/14/10. Lien strip granted 2/2/11
0% payback to unsecured creditors, 56 payments down, 4 to go....Comment
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Much thanks momofthree! This is great news!Comment
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