What is the exact definition of "insolvency"

[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

[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]

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 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.

BINGO! You took grant money to build a home, didn't do it, now you're hiding from the government because you know you have committed a crime.

[hereforinfo]

My head hurts. Ok, let me see if I can figure this out.

You need a job making $40/hour to get a loan to build a house.
Without said loan, you can't fulfill your obligation to the state for a grant you received and will have to repay the $92k.
You are unable to find a job making $40/hour.
You can't pay your bills and will soon run out of money for basic living expenses.
You could get a job making $25/hour.
Said job won't be enough to qualify for the loan, but would at least be enough to live on.

I don't understand why you don't just get any job to support yourself, if you can? Your choices are to either get a job that supports your living expenses and you will owe the state for the grant. Or, get no job and have no means to support yourself and you will still owe the state for the grant.

I think you need to face up to the fact that it's time to go to work. You can't keep gambling on what ifs. Also, I think you need to purchase a calculator and a book about finances.

[Pizza]

You Broke the Law, Deal With It.

I hate to say it, but this whole story sounds like a web of manipulation, cheating, and opportunism at the expense of others. OP, I can't believe you're seeking advice after doing all of this. You may as well ask us for a loophole in the system after robbing the bank.

The Katrina fund provided you with $92,000 for a HOME. God, I can't believe the rest of the country struggles to pay their mortgage, and you got this grant and blew it.

[backtoschool]

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.)

I don't understand why the 30k in stocks can't be sold and used as a down payment on a home.

I certainly don't see where the 120k "free cash flow" is coming from. You still owe all the money to your credit card advances that you used to play the stock market.

I have no idea how you can have 92k and be "living in your car".

You also stated that you are living in a hotel and that that costs about $750 a month, is that where the 92k went?

Not understanding how the "financial value" of getting a home loan for a home that is not built yet, in a depressed housing market will be 100k.

Although I think you are a troll, I have been answering your posts, since some of the questions might be questions that others do searches on.

[hereforinfo]

BINGO! You took grant money to build a home, didn't do it, now you're hiding from the government because you know you have committed a crime.

Exactly. I believe he posted yesterday about the grant and how it was spent gambling on the stock market. I'm not even sure you could discharge that type of debt (grant from the state), you really need to see an attorney.

Edited to add: In reading one of your posts from yesterday you state that the grant was received in October 2008, and after paying off the balance of the note on your destroyed home you had a net of $63k cash. Then you immediately took out cash advances totaling $29k, plus more in march totaling $12k. That's a total of $112k cash in the past year! Yet you claim to be homeless. Where is all that cash? There's a big hole in your story.

[2manybills]

I think OP is either a troll or a law student/paralegal trying to find out about BK's. Nothing adds up.

[DeadManCrawling]

I personally don't think the OP is a troll, or a law student running experiments.

I think he/she has gotten into a mindset that I reached, also, for a few terrifying moments three years ago. There are a lot of financial moves, some wise, some not, that add up to a web that a BK court is going to be very interested in.

It sounds like he/she is trying to figure out how, legally, to retain the most assets, be able to file legally, and not be caught in the wringer.

The only thing that will help all of those entirely is putting time between all these moves and the filing date. The more the better. If there are debts that have accrued and NEVER been paid on, you better take some of that stock money and make token payments, at least.

Then put 1-2 years between now and filing date and hope for the best. Use some of the rest of the money to live on, and hope for the best. If there are assets that you cannot exempt, plan on giving them up.

The key to everything, as much as you can do it, is simplicity.

If you build a giant web of exemptions and financial moves that are difficult to sort out, the BK court will eye you very closely. And even if EVERY SINGLE ONE of those moves is, on its own merits, perfectly legal, you will STILL attract more attention than you want.

Then, if a foul stench is detected by the trustee, the BK court can rely on that old standby "Totality Of The Circumstances" and fry you anyway.

Keep it simple, use what time you can to stop all these complex transactions, and good luck to you.

[2manybills]

I personally don't think the OP is a troll, or a law student running experiments.

I think he/she has gotten into a mindset that I reached, also, for a few terrifying moments three years ago. There are a lot of financial moves, some wise, some not, that add up to a web that a BK court is going to be very interested in.

It sounds like he/she is trying to figure out how, legally, to retain the most assets, be able to file legally, and not be caught in the wringer.

The only thing that will help all of those entirely is putting time between all these moves and the filing date. The more the better. If there are debts that have accrued and NEVER been paid on, you better take some of that stock money and make token payments, at least.

Then put 1-2 years between now and filing date and hope for the best. Use some of the rest of the money to live on, and hope for the best. If there are assets that you cannot exempt, plan on giving them up.

The key to everything, as much as you can do it, is simplicity.

If you build a giant web of exemptions and financial moves that are difficult to sort out, the BK court will eye you very closely. And even if EVERY SINGLE ONE of those moves is, on its own merits, perfectly legal, you will STILL attract more attention than you want.

Then, if a foul stench is detected by the trustee, the BK court can rely on that old standby "Totality Of The Circumstances" and fry you anyway.

Keep it simple, use what time you can to stop all these complex transactions, and good luck to you.

You may be right DMC, it just seems OP has had some outrageous posts on other threads so one wonders!

[frogger]

BINGO! You took grant money to build a home, didn't do it, now you're hiding from the government because you know you have committed a crime.

I think you nailed it!

[OhioFiler]

I doubt he's a troll. He has a false sense of superiority however. He writes as though taking a $40/hour job is somehow beneath him. He writes grandiose run on sentences that boil down to not much but filler.

What puzzles me is why someone able to earn over $100K per year talks in terms of hourly earnings. I couldn't tell you what my hourly rate of pay has been since I graduated college.

He has a gambling problem. He took money from the state(which came from all of us via Uncle Sam) and day traded it away. Now he believes he has a plan which basically includes him doing most of the construction himself which I doubt is plausible.

[backtoschool]

I doubt he's a troll. He has a false sense of superiority however. He writes as though taking a $40/hour job is somehow beneath him. He writes grandiose run on sentences that boil down to not much but filler.

What puzzles me is why someone able to earn over $100K per year talks in terms of hourly earnings. I couldn't tell you what my hourly rate of pay has been since I graduated college.

He has a gambling problem. He took money from the state(which came from all of us via Uncle Sam) and day traded it away. Now he believes he has a plan which basically includes him doing most of the construction himself which I doubt is plausible.

After thinking about it, I now agree with you that the OP is probably not a troll. I think the OP mentioned being a contractor programmer. That would be consistent with the hourly rate the OP quoted and would explain the erratic nature of the income. The Wall Street firms I worked for always hired a lot of contractors and they made hourly rates consistent with what the OP talks about.

[justbroke]

Then, if a foul stench is detected by the trustee, the BK court can rely on that old standby "Totality Of The Circumstances" and fry you anyway.

For a dead man, you certainly have maintained your sense of perception. I've read the same thing, and when the OP indicated that this was all to fix some issues with a grant s/he obtained... it sounds like just "planning".

I don't know why the OP is on a Bankruptcy site.

The OP needs to really put down on paper what their end game is. Then seek competent professional advise on his/her goals and for planning purposes.

Sounds like the OP dug a hole and is trying to figure out how to climb out of it... while, at the same time... continuing to dig!