Starting a higher paying job, haven't filed yet.

[derp]

Here's my situation, in short:

I owed $19,000 on my credit cards. I was barely scraping by, using credit cards to buy groceries, gas, ect, so I talked to a few lawyers last April and decided to file for bankruptcy. I haven't made a CC payment since the beginning of May 2010. I retained my lawyer in the beginning of June 2010, but haven't been able to pay him the $1,000 still needed in order to file. I was easily a Chapter 7 case.

Next week I'm starting a new job with a decent pay increase. Not substantially more than I make now, but enough that I could go back to paying the ridiculous monthly minimum that I was paying before (most of the balances have been charged off, so fat chance, even hypothetically), and could actually still buy groceries. Unless I work a ton of overtime (which is a strong possibility), I should still be under my states median. This job is temp to hire, so after the first 6 months, assuming I get hired, I'll be making more than double what I'm currently earning, which would put me over my states median.

So, if I filed within the next few months, when I have the money to pay my lawyer, would I have anything to worry about as far as my income is concerned? As in, can the trustee make a decision based on my forecasted income, and turn me into a Chapter 13 case, or is it strictly based on the 6 months before you file? The last three months have been financially devastating, so I'm even further below my states median, and there's no guarantee that I'll be hired in 6 months.

[LadyInTheRed]

The future possible increase in income is speculative and should have no bearing on a current Chap 7. Just be sure to get that $1,000 together quickly and get filed before you are offerred the permanent job.

[derp]

Thanks. Here's another question:

Say I had to wait until after the 6 months was up, and was permanently hired, before filing. Like, if I feared I might lose the job for having to take a day off so early while still a temp, and felt it was safer to wait until I was a full employee to take a day off. And let's say that decision forces me into a Chapter 13. Is there a ceiling to how much I'd have to pay each month?

I owe $19,000. I'm not entirely sure what it's at with all the late fees. My disposable income is going to be around $2,000 a month (not counting overtime), after if I get hired. The trustee obviously isn't going to make me pay $120,000 over the 5 years to pay back $19,000 worth of debt. They'd probably cap me off at around $319 a month, to pay the full $19,000 in 5 years, right? Or something close?

[LadyInTheRed]

I owe $19,000. I'm not entirely sure what it's at with all the late fees. My disposable income is going to be around $2,000 a month (not counting overtime), after if I get hired. The trustee obviously isn't going to make me pay $120,000 over the 5 years to pay back $19,000 worth of debt. They'd probably cap me off at around $319 a month, to pay the full $19,000 in 5 years, right? Or something close?

You've got it pretty much right. Since your disposible income would be so high, your monthly payment would be your total debt, plus attorney fees included in the plan, plus the trustee's fee, all divided by 60. I'm not sure, but you may be able to propose a shorter plan with a higher payment.

If your income increases that much before you can file a Chap 7, you might want to try negotiating payment plans with the creditors instead of filing a Chap 13. Generally, if you can pay your creditors off in 5 years or less, Chap 13 is probably not the best option.

[Unibrow]

If your income does become that high after the job offer, you should save up and pay the collectors at 20-25% of the balance. Also talk to an accountant to determine how much tax you have to pay for the difference to see if it's worth it for you.

19K is not much when you have 2K disposal income each month. 6 months of intense budgeting and savings and you're set.

[jcj112562]

Just in case you do have to go the CH13 route, you can file a Plan that has higher payments than total debt divided by 60, but the Plan has to be written for the statutory length (at least it did for me). I discharged a "5 year" plan in a smidge over 25 months. As long as you keep on top of things, the plan payments stop when the plan is paid off. I know my trustee was quite pleased to see a 100% Plan paying a substantial (but not all) part of my DMI to get the plan completed in a shorter time frame.

John

[derp]

I wish it was that simple. Even with the extra income, it'll still be difficult to budget. My house* in in an overwhelming state of disrepair. The carpet is dry rotted, the roof is leaking, the ceiling is crumbling where the water is getting in, the chimney is leaning, the sidewalk and steps are crumbling, the basement is full of mold, there's a large hole in the wall where we had to fix the shower, still has mostly knob and tube wiring, et cetera. Plus, like I said, the permanent position isn't a sure thing. I'd hate to put up with the phone calls, and harassment against my family, my girlfriend, and even her family, to go on for another 6 months, only to not even get the job in the end.

I guess I'll talk to my lawyer when I get a little money together, and see what he recommends. I'll also talk to whoever my supervisor is in a month, and see if an arrangement can be made the week of the 341.

*My girlfriend and I bought this house a few years ago, but put it in her name, because my credit was so bad at the time. We planned on adding my name after we got married (haven't had the money for that either), and I got my credit straightened out. Optimism. The house was originally owned my an elderly couple, who after letting a lot of things go, polished up the house to a degree which besides the roof, fooled us. Live and learn.