Question Confused in NC

[mikna01]

Hello All,
I have been a long time lurker on these boards and have picked up lots of useful information so thank you all so much for sharing. It looks like we are definitely going to have to file. I have interviewed three attorneys and have been told some conflicting info, so I am trying to figure out who’s right. We are in North Carolina, filing joint. We like to surrender the house, which is in forecloser , and we owe about 60,000 in credit cards. Although, we make a good income, 83,000, we maintain two households because my husband could only find work out of state. We are trying for a 7 but might have to go with a 13.
1. Income: Your means test is based on 6 months average income. Does the 6 months include the month you file? If we file the last week in April, does it include all of Aprils pay or only until March 31? This makes a difference to us because my husband’s raise went into effect Jan. and it was substantial. If we don’t need Aprils pay, do the trustees still need to see it?
2. One attorney said our income tax refund $4200.00, would not be a problem if we use it to pre-pay rent, pay attorney fees, ect… but the other one said we have to exempt it.
3. We could have 60 days of income in our bank acct and it’s exempt, but the other said we should have almost no money in our account when we file.

I want to go with the attorney who is right, not just what we want to hear.
Thanks.

[newbie2]

Yes, your income is based upon the last full 6 months average. If you filed at the end of April, then the "look back" would be October through March. Keep in mind though that you may be asked if anything has changed as far as income, and you have to answer truthfully. Also, the trustee may ask for paystubs so the raise could show and if you are well above the median because of that, it may be enough for the trustee to challenge. (So much is district specific. Ask a third lawyer if need be for clarification.)

IF you receive your income tax refund before you file and use part of it to pay your attorney and pre-pay a months rent then that shouldn't be an issue. Also, I am seeing in NC exemptions a $3500 "wild card" exemption, that may be what the one attorney is referring to as far as exempting it to be safe.

Wages in the bank: The way I am reading the exemptions is "60 days earned but unpaid wages". http://www.bankruptcyinformation.com/nc_exemp.htm
I would ask again about this to be safe.

Good luck to you.

[october99]

Means test pass or fail with the 6 month look back you are using, you need to consider schedule I and J. That's where it gets tricky. Even if you pass the means test with the 6mo you are going to be using, if your income has increased and you have more money left over each month moving forward it could be a problem for your case. You'll need to really look at your expenses and current income with the right attorney to determine if a 7 is possible.

[mikna01]

Thank you for the link. I guess I need to ask more questions. All three attorneys did say a 7 would be close, it really depended upon our expenses and if they could make a valid agrument for the dual households. If we take in my husbands rent and utilties and such, we could qualify for a 7. Thanks for all your help, off to research more.

[LadyInTheRed]

2. One attorney said our income tax refund $4200.00, would not be a problem if we use it to pre-pay rent, pay attorney fees, ect… but the other one said we have to exempt it.

I think the difference is that one attorney is telling you to spend it before you file. The other is assuming you will still have the cash on hand at the time you file, in which case you would have to exempt it. It seems that one attorney is giving you advice about planning for your bankruptcy, the other is not. Score one point for the guy suggesting you spend the money on necessities before you file.