Huge turn of events in our planned CH7-what to do?

[Diesel73L]

My wife and I have been planning to file CH7 ever since we found out that she was not going to be rehired for the 2012-2013 school year due to budget cuts. Our debt was already unsustainable, but the fact that we were both steadily employed had us fooled into thinking there was some way we could pay it down. The reality was that combined we barely made $100K a year and had nearly $70K in credit card debt, $60K in student loans, and a mortgage to pay. I defaulted on my cards about two months ago-my wife just purchased a late model used car and had planned on defaulting on her cards starting in March... That is until she was called into her Principal's office today and offered another position as a special ed teacher-all she would need to do is get an additional certification. This is a mixed blessing because with her working I really don't think we could possibly qualify for a CH7. Taking the job has a lot of benefits however-if she completes this next year successfully she'll have tenure and the security that comes along with it. Teachers in our state also have excellent benefits and a good pension plan. In short, she would be a fool to turn it down. However, we still have to figure out what to do about BK in the meantime.

One legitimate concern is childcare-we've shopped around at different daycares in our area and found that the cheapest 5 day-per-week 7:00 a.m. to 4:00 p.m. daycare is $1000 a month. With both of us working that would be a huge chunk of either of our salaries. I'm actually thinking it's a better idea for me to quit my job in order to take care of our daughter during the day. This will solve the problem of daycare and also give us the wiggle room needed to get by with a CH7. Later on I could find an afternoon or night job in order to bring in extra money, but I think in the meantime I could collect unemployment as long as I stated that my reason for leaving was to take care of my daughter? Anyway, I'd be interested in any advice you folks could give...

[SMinGA2]

Someone else may chime in to correct me if I'm wrong - but if you quit your job for personal reasons, I believe there is no unemployment compensation. UE is for those who have been laid off/let go - people who are actively seeking work. You would need to continually be trying to find a job to continue to receive UE benefits.

Think long and hard before you give up a job. If its solely to help you file ch. 7, you may have regrets when you want to replace your income. Would you be able to adjust your budget to live on one income? (My husband is a stay at home dad - but its not right for every family.)

Perhaps put together a mock budget, for if your wife takes this job. Factor in daycare, and any other expenses that would result. What do you think the budget might look like? PErhaps ch. 13 would be a better option for you. (Its not a curse.)

Are the student loans you, your wife, or both? For teaching/public service jobs- there are plans to forgive the student loans after so many years of payment.

[8forme]

I am also quite certain you can't collect unemployment for any kind of voluntary resignation, you have to be terminated.

That said, I am a huge fan of a parent being able to stay home and raise their children if at all possible. If one parent can provide insurance, benefits and enough of an income to support a family on that is great. If it were us, we would definitely, (and are), have one parent stay home. Our kids are only little once and we feel that we should be the one to be with them all day long and provide their care. I do realize that that is not always possible, but it sounds like it is in your situation.

[keepsmiling]

Funny how life works, isn't it?
Congrats on your wife's offer. It sounds like a good one, and it's probably not too late to salvage your credit.
Seems like the universe is conspiring to tell you you don't have to bk. A 13 might be a great idea too.
What have you been doing for daycare til now?

[Diesel73L]

Funny how life works, isn't it? Congrats on your wife's offer. It sounds like a good one, and it's probably not too late to salvage your credit. Seems like the universe is conspiring to tell you you don't have to bk.

I'm not sure I'd go that far-even with both of us working our minimums ate up every last cent of disposable income-it was the unpaid portion of her maternity leave that put us over the edge.

A 13 might be a great idea too.

Possibly-I'm not crazy about it, but if its the only way out so be it.

What have you been doing for daycare til now?

My wife took leave, partially paid, partially unpaid. When hers was exhausted I took a combination of paid and unpaid leave. When I go back we need to shell out $1000 a month-my minimums were $850 a month, so I'll need to contribute all of that plus my wife will have to kick in $150, so there's no going back on the default. We'll see what happens.

[ValleYum]

I would watch how this plays out... until your wife has a signed contract - just because you never know. JMO

Two thoughts/questions pop in my mind:

How difficult/lengthy will her additional certification be to obtain in order to get this job?

Does her school district offer a tax-free flexible spending account for childcare? Depending on your tax rate, it could give you a discount by paying with tax free dollars but you won't get the childcare tax credit at filing time.

[dman]

I am also quite certain you can't collect unemployment for any kind of voluntary resignation, you have to be terminated.

Definitely check your state's rules. Some states WILL let you voluntarily resign and collect UI (though you will be excluded from any federal extension of benefits). Sometimes there's a catch-22. For example you might be allowed to quit your job to take care of a sick parent...you qualify to file for UI, however you'll be denied weekly benefits based on the fact you're not AVAILABLE to work. What you'd do in this situation is quit, wait until you ARE available to work, and then file (or you could file right away, you'll just be denied weekly benefits for the weeks you file and aren't available to work).

[Drazil65]

I left my job back when our son was about 1 and half to be a sahm as the whole daycare thing was not working for us money wise and any other way truthfully. I could not file for ue, this was in Ohio in 2005. Don't know if things have changed much but I would check first of course. I agree with one of the other posters that said do not do anything before your wife has a contract, funny how budgets can come and go in just a few months time so you want to be sure it is a sure thing.

Is most of the debt in your name? For us, most of the CC debt, both houses and both cars were in DH name only. We decided that only he would file. Here in NC our house here was protected from the trustee taking it because my name is on the deed BUT not the mortgage. I have a little CC debt that is and has been current and not an issue with paying for me. Also, that leaves one of us with decent credit for until he can build his back up. We have been living on cash for this last year and its gets better and better so once my debt is paid off we will still live on cash and not use cards again.

[lotsahats]

Hi, Diesel!

I was sort of in the same boat. We were struggling to make ends meet, and had to stop paying on the cards to free up some wiggle room in our budget. We were easily looking at a 7. Then, just three months after we defaulted, my husband received a promotion, which I was afraid would push us into a 13.

But, as of last week, his hours have been cut. He was working twelve hours a day, but is now down to "only" ten. He's no longer getting as much overtime as he used to, which was where a large chunk of his paychecks came from. This, of course, puts us right back into 7 territory, just in a much better position, budget-wise, than we were before the promotion. And he gets to spend more time with us, too! Score!

The point I'm trying to make is, don't fret about which chapter you'll be filing under, until the time comes. If I remember correctly, you're filing in October, right? A lot can happen in eight months (and, hopefully, only good things).

[doni49]

I didn't have time to read the entire thread so sorry if this has already been addressed.

Even IF UE is available to you if you quit (I don't think it is either), I was told that although UE benefits are exempt fand can't be taken, the income from the UE has to be included when calculating income for BK7 vs BK13.

[goturtlego]

Have you considered inhome daycare for your daughter? Amoung other reasons, they are typically way more reasonable in what they charge.

Before quitting your job be very careful to think it through. In this economy anything can happen and nothing is a garantee so what would happen if your wife got laid off the following year...

Can you hurry and file Bk now, while your wife is not working/obtaig her certification?

[keepsmiling]

Have you considered inhome daycare for your daughter? Amoung other reasons, they are typically way more reasonable in what they charge.

Before quitting your job be very careful to think it through. In this economy anything can happen and nothing is a garantee so what would happen if your wife got laid off the following year...

Can you hurry and file Bk now, while your wife is not working/obtaig her certification?

I was gonna make some snarky remark about how everything is so $$$ here in the Garden State. Turns out we are NOT the highest for daycare. I thought Diesel's price was pretty reasonable, not much more than I had to pay for my now 18 yr old when he was a baby. So maybe, just maybe, there is a less expensive option. Here are some numbers. The first number is NJ cost, the second is national:
Child Care Costs, Family Incomes2
New Jersey U.S.
Average, annual fees paid for full-time center care for an infant $11,193 $4,620-$18,773
Average, annual fees paid for full-time center care for 4-year-old $9,235 $3,780-$13,158
Average, annual fees paid for full-time care for an infant in a family
child-care home
$8,219 $4,620-$11,940
Average, annual fees paid for full-time care for a 4-year-old in a family
child-care home
$7,058 $3,780-$11,475
Average, annual fees paid for before- and after-school care for a schoolage child in a center
$5,105 $1,900-$10,400
Average, annual fees paid for before- and after-school care for a schoolage child in a family child care home
$4,927 $1,805-$9,360
Average, annual tuition and fees paid for 4-year state college
3 $11,667 $7,610
Median annual family income of married-couple families with children
younger than age 184
$105,336 $78,245
Cost of full-time care for an infant in a center, as percent of median
income for married-couple families with children younger than age 18
10.6% 7.2% to 15.7%
Median annual family income of single parent (female headed) families with
children younger than age 184
$31,803 $24,244
Cost of full-time care for an infant in a center, as percent of median
income for single parent (female headed) families with children younger
than age 18
35.2% 25.4% to 52.5%

[goturtlego]

Yah i hear ya. Just depends on where you look. Daycare averages $240 per week+ here in Florida. I pay $85 a week for my 3 yr old (inhome daycare) and it's what we have paid for 3 years with a ratio of 1:5 adult to kids. You really can find the perfect setting if you look..no matter where you live.

[Fargo]

I didn't have time to read the entire thread so sorry if this has already been addressed.

Even IF UE is available to you if you quit (I don't think it is either), I was told that although UE benefits are exempt fand can't be taken, the income from the UE has to be included when calculating income for BK7 vs BK13.

I am on UE and it was included in our income when we did the means test. It will be included as well once we file.

[dman]

I didn't have time to read the entire thread so sorry if this has already been addressed.

Even IF UE is available to you if you quit (I don't think it is either), I was told that although UE benefits are exempt fand can't be taken, the income from the UE has to be included when calculating income for BK7 vs BK13.

Probably not in NJ, but I know there's states that allow it.

And to throw another wrinkle into it...unemployment benefits MIGHT be counted toward assets. I know at least one district where this is the case. The way I read the law, it shouldn't be, but anything to do with UI seems to be a big grey area.