Question Thinking of Chapter 13

[rjk]

This last 2 years have been heck!!!! First husband was found to have a brain tumor,same week mother had stage 4 cancer and then to top it all off son who has custody of daughter has to go back to court due to mom. Any way with all the add things I will not lie we used charge cards at time it was the only option. We are paying all accounts at this time. None late. Never had one late in 27 years.
Question 1 Is military retirement consider income. In our state we are exemept from paying taxes on it.
Question 2 Do we stop paying a month or two before filing to bill a nest egg? Because if we do not if there was a added expense we would have nothing.
Some on here say yes and others say no.
Question 3 Is all Chapter 13 100% pay back?
We have a few bill that I have put thing as collartrel will they come and take the things?

I am sure that some of these things have been answered and I am sorry if I have repeated them. Thank you for any input.

RJK

[kornellred]

RJK - you will no doubt get some very sound advice from the folks on this forum, but the first thing that you must do is talk with a bankruptcy attorney in your area - preferably one who limits their practice to bankruptcy and closely related matters.
As far as the 100 % payback issue goes: are you asking if you will be required to pay back the entire amount that you owe to unsecured creditors? The only time that the answer to this question would be "yes" is if your Disposable Monthly Income (DMI) allows for it. In other words - only if you can afford to. I myself am paying back $18,000 of the $80,000 unsecured credit debt that I carry (4 years down and 1 year to go!) in my Chapter 13 plan.

Go see that attorney.

[ValleYum]

My husband is retired from the military. His retirement pay was considered income in our bankruptcy case.

Good luck!

[keepmine]

Do you know if you can file a Chapter 7?

[LadyInTheRed]

Whether you can build a nest egg before filing depends on your state's exemptions. From what I found in a quick Google search, it appears that Louisianna exemptions will not allow you to exempt any cash. However, you can have non-exempt cash as long as your plan pays to unsecured creditors at least an amount equal to the non-exempt cash you have on your date of filing. So, if you have $10,000 in cash on the day of filing and have enough disposible income to pay $10,000 to unsecured creditors during your 36 to 60 month plan, you can keep the cash.

Once you are certain you will file BK, most attorneys (and members of this board) will recommend you stop paying unsecured creditors. The cash you save can be used to pay your attorney and pay for necessary living expenses. If your cars or home need repair or you or your family need dental work, those are some of many examples of things to spend money on before filing.

Paying secured debt will be part of your Chap 13. You can keep the assets securing the loans. But, if you have non-exempt equity in the assets, the same rule applies as for non-exempt cash. Keeping assets that are collateral for a loan may not always be a good idea, especially if you have no equity. It may be better to surrender the asset and let the creditor have it.

keepmine makes a good point. Why do you think you need to file a Chap 13 instead of a Chap 7?

You should definitely make appointments for free consultations with 2 or 3 bankruptcy attorneys. In the meantime, read the stickies and as many posts as you can. And keep asking questions. You will learn a lot here that will help make your consultations with attorneys more productive and help you weed out the incompetent or lazy ones.

Welcome to the BKforum!

[rjk]

I want to thank you all for the replys-as far as Chapter seven I believe we make to much or I am not figuring out the means test correctly. I wish we could it would be great I think. We want to keep our home and do not owe that much on the truck. I will try the means test again and see what we come up with. Any pointers for doing the test? Thank you

[keepmine]

The means test is just step 1. You still need to fill out schedules I and J to determine if you have enough monthly disposable income to fund a 13. Also, you need to determine how much equity your state allows you to exempt for a home and car.
You really need to see a lawyer or two.
Here's a link to heelp with I and J.

http://www.legalconsumer.com/bankruptcy/means-test/index.php