What is the exact definition of "insolvency"

[swampwiz]

Why do you need to build a home? Why not just rent somewhere cheap. It's just a place to sleep. I'm not getting why you would have $3700/month in living expenses? I don't have barely that much and there are 5 in my family with two car payments and a mortgage. Bankruptcy isn't just about getting out of your problems, it's about changing your lifestyle so you don't get back into the same predicament. Think about what you NEED rather than what you want.

I have debt service of $2200/mo, rent of $750/mo, so you can see how I can get up to $3700/mo pretty easily. I can't rent at a cheap place because I have to be mobile to go to wherever I would find a job, and therefore have to go week to week (I'm fortunate that I could even find a place that cheap.)

I need to buy a home because I got flooded out in Katrina, and I took a grant from the state to build a replacement home in the state. If I were not to build the home, I would owe the state back $92K. Also, I have the opportunity to build the home at an interest rate of 2.7%, as well as get a loan for replacing personal contents of the home for $30K. The financial value of getting a loan this low would be worth about $100K. So getting the home is worth an extra $192K. Everything I have been doing has been to work towards that goal. If I get that goal, I will wind up with about $120K in free cash flow that I could pay off my creditors (although I probably would hold back until I thought the stock market would have bounced back.)

[Pizza]

I am homeless in that I don't own a home. I have to rent.

Why is that a grand-scale problem? Lots of people rent. Many of them actually come out ahead because they don't have to pay for home insurance or repair their house.

[swampwiz]

I am homeless in that I don't own a home. I have to rent.

I could probably get a $25/hr job, but if I did that, I would not be able to get the SBA home loan at the low interest rate, which would allow me to get an additional $120K in net cash (because everything is dependent on getting the home built.) So taking a lower paying job would eventually put me in BK.

Taking a fulltime job making $40/hr (my goal), however, would allow me to get the loan, and hence have enough cash flow to pay off all my creditors. If my creditors could temporariliy reduce the minimum payments (or suspend them), I would be able to get the SBA loan with a job making only $25/hr (but full time, which might be harder, but in due time, I should be able to get the loans. Perhaps my creditors will see my situation and accomodate me.

I would be on the hook for another $92K because

[readytofile]

Told you this guy is a Troll.

I've been thinking that as well.

[readytofile]

Why do you need to build a home? Why not just rent somewhere cheap. It's just a place to sleep. I'm not getting why you would have $3700/month in living expenses? I don't have barely that much and there are 5 in my family with two car payments and a mortgage. Bankruptcy isn't just about getting out of your problems, it's about changing your lifestyle so you don't get back into the same predicament. Think about what you NEED rather than what you want.

[Pizza]

I've been wondering that myself.

So OP, you've been using your stock earnings "just for living", yet you believe you could earn more than double what I earning making before I lost my job... so I guess you're living with relatives while your house that you can't afford is built (?), while not looking for a job because $25/hr isn't good enough... what??

Why not make things easier by telling us straight up what the problem is and what you're trying to accomplish by filing BK? Are you trying to punish the banks because of the emotional impact of Hurricane Katrina?

Something here isn't adding up, at least not in terms of BK. You played the market on credit cards and want to BK them. That's fraud, only it's year-old fraud, so it's a gamble. I'm sorry that you are a hurricane victim. My job of 11 years was outsourced to India last year also, so I also know what it's like in this globalized market, especially in the midst of the Great Recession as they're calling it. Unfortunately, the banks and trustee are only going to focus on your actions leading up to your BK, and your attorney is going to be focused on your life after BK; neither of which are looking good. You'll have to be able to afford to live afterwards or BK isn't going to help you.

[whipster1]

Told you this guy is a Troll.

[frogger]

What exactly are you trying to accomplish here?.

That's the big question that I've been wondering. What are you trying to accomplish. Your posts are all over the place, you're homeless, yet have 30K in stocks, you're unemployeed, yet could get a $25 per hour job.....

What's the game that you're playing?

[OhioFiler]

Well, of course, I will be working again. The problem is that if I were to take that job at $25/hr, I would not qualify to build a home - and the home, and the special financing I would get from the SBA at 2.7%, and from a 2nd mortgage on equity of the homesite and sweat equity would allow me to knock down the debt down to below the value of my investments, at which time I could consider whether it would be better for me to keep my investments leveraged, or to just take them down.

That is one looooooong sentence. What exactly are you trying to accomplish here? Are you looking for investment advice or BK advice?

Are you saying you have to be unemployed to receive special financing? If that is your situation and you are avoiding working because of it I am suspect of your intentions.

[Pizza]

The cash advances for playing the stock market you mentioned in the other post are the actions that could bite you, not the definition of 'insolvency' when you file. Anyone who is unlikely to come up with the money to pay what is owed is considered insolvent. If you take on more debt during this time and intent can be proven, that's fraud; but the willingness to prove intent depends on the creditor.

[swampwiz]

Well, of course, I will be working again. The problem is that if I were to take that job at $25/hr, I would not qualify to build a home - and the home, and the special financing I would get from the SBA at 2.7%, and from a 2nd mortgage on equity of the homesite and sweat equity would allow me to knock down the debt down to below the value of my investments, at which time I could consider whether it would be better for me to keep my investments leveraged, or to just take them down.

[Willy13]

Insolvency comes into play in determining if any transfers were fraudulent transfers. That's one area where it is important.

[keepmine]

Swampbiz,
You're way overthinking this. Many of us have filed for bk and emerged with a positive net worth.
Me, the equity in my home was exempt plus, my IRA and 401K were exempt. I was discharged with a net worth of roughly $90K.

Your big problem right now is, you seem determined to sit around and wait until you're destitue to file. If you can get a $25/hr. job-take it! Remember, you have to support yourself post bk.

[OhioFiler]

BK is a snapshot of your current situation not a what-if analysis and you don't have to wait until you've burned through all your liquid assets to file.

You complete your means test, Schedules I and J and you'll know pretty completely whether you are insolvent today.

[swampwiz]

Well, if I'm declaring BK 6-8 months ahead of when I would be insolvent (based on my "burn rate" of about $3700 of living expenses and debt service), wouldn't that show that I am being diligent about determining that my situation is insolvent, at which time I should declare BK?