messed up life!

[pambysue]

I am currently in foreclosure (havent received a sale date yet..only the acceleration notice) and am planning to file chapter 7 in December. the reason i am waiting is because i earned a lot of overtime in the first half of this year and if they take my last 6 months average, it will put me about 2k over the median income. if i wait until december 1st, i will be about 500 under the median income in NY. it is just me & my 12 year old child. i have informed my attorney that i want to surrender my house as there is no way i can afford to keep it and survive financially. i owe about 82000 on my home and it is only work about 70000, plus i owe 3 years property taxes. he told me any deficiency would be wiped out in my bk. i have found an apartment for me & my child and plan to move out shortly. i know i have created all my own problems. i thought i was dying a couple years ago and took my child on a vacation to disney world (which i couldnt afford!), then i developed a gambling addiction. needless to say, i was 'robbing peter to pay paul' and went on a downward spiral! i totally stopped paying all of my bills except utilities and food & necessities to live. i make enough money to pay 'current' bills, but not enough to catch up on all the past mistakes. my question is, is the trustee going to give me a hard time about discharging my debts and giving up my house due to my own stupidity in squandering my income for so long? thankyou all for hearing my long, drawnout woes!

[HHM]

Short answer, No...the Bankruptcy trustee generally doesn't care "how" you got in to BK, he just want's to find money to pay your creditors something, but you can't wring water out of a dry sponge.

The U.S. Trustee only cares that you didn't commit fraud and are now trying to get out of it by filing BK. However, stupidity is generally not fraud.

Note, you don't really have to move out of your house just yet, the mortgage company can't kick you out until they complete foreclosure, and you don't have to keep paying them. In essence, you can live a few months rent free and only move out when you have to.

Also, I am going to move this thread to the general questions forum.

[miss puff]

Hi Pambysue and welcome! There have been quite a few gamblers on the forum and I don't think they ever got any issues from the Trustee. Like HHM said, they don't care how, just want any extra money. Good luck

[pambysue]

Thankyou for the replies. I have been sick to my stomach over all of this and i just want to start my life over again and LEARN from my mistakes. One more question. I am not sure how the means test works. Do they budget out my monthly income even if I am under the median income for my state?

[Credit Hater]

Pamby, take a deep breath and exhale slowly you're going to be just fine.

When I first knew I was going to have to file bk, I was feeling just as bad as you....that was a year ago. I realized after coming to this forum and doing some research on bk that things were'nt as bad as I thought.

Like you said, learn from it, and plan to make better financial decisions. Trust me, you're going to be ok

[lrprn]

One more question. I am not sure how the means test works. Do they budget out my monthly income even if I am under the median income for my state?

Hi and welcome to the BK Forum, pambysue! One thing for sure, you are among people here who understand what you are going through - we've all been where you are right now ourselves.

If your total income in the previous six months before filing is indeed under New York's median income for a two-person household (you can check that at http://www.usdoj.gov/ust/eo/bapcpa/2...come_table.htm - it's $50,367), then only the first part of the mean test is completed. The second part of the Means Test that goes into great detail about both income and expenses is typically skipped.

Have you met with a bankruptcy-specialty lawyer yet? If you haven't, even if you intend to file pro se (on your own without a lawyer), most bk lawyers provide a free half-hour-to-hour consultation with no obligation to retain them. Make 3-4 appointments with bk lawyers in your area to ask the questions you've asked us here. Bring along an accounting of all your income sources for the past year, your federal, state, and local tax returns for the last year or two, and a listing of all of your debts (including the gambling debts) with amounts currently owed along with you for every appointment. These visits are usually very illuminating and very helpful because the lawyers will ask you questions you haven't even thought about yet. It's well worth your time!

[SinkingFast]

Hi Pam and Welcome to the Forum!

One note about Foreclosure in NY,............ It's always Judicial. So you've got a while before you have to be out of the house. Might as well stay and live rent free a while.

Collect up your attny's fee and filing fee. Take care of things you've been putting off. Like buy some new clothes. Go the the doctor and the dentist. Fix up your car. Take care of any insurance needs you may have. Any other necessities you can think of that you may have been putting off because you didn't have the money.

If you aren't under the gun from any of your other Creditors, get your paperwork in order and then wait, wait, wait to file. There really is no rush. When you're ready, look for a place to rent, get moved and settled. Give it a couple of months to see what your utilities bills are gonna be like so you know your expenses. Then file.

[pambysue]

Thankyou all for all of the helpful information! yes, i have an attorney and he is very helpful, but he was going to file 2 months ago and I have chosen to wait until i fall under the median income. I hope that doesnt seem dishonest of me because my overtime has been severly reduced! But, i am curious about the schedule 'j' form. What if it looks like i have 300 or 400 left after my monthly bills? will i be forced into a chapter 13 even if i am under the median income? because, it may LOOK like i have that amount left but in reality i dont.

[treehugger1]

Welcome. You are not alone in waiting to file if you have additional overtime for a few months. I'm in the same position, however, when I thought my income would go down, it didn't. I'll need to file very soon, and hoep that should my income go down, I can modify the plan at a future date. I'm going into a shapter 13, and have finally hit rock-bottom and see how this all plays out. I've also gambled a bit, but only on my own money. (I could have used it to pay more on credit cards, but chose poorly.) In my opinion, HHM is correct in stating that the trustee will most likely care less about how you got in your situation. If you used credit cards to gamble recently, you need to talk to your attorney about timing of filing. I'm going into a 13 because I made p*ss-poor decisions about my disposable income and now my monthly debt payment outstrips my monthly income. Best to you. Keep you questions coming.

[lrprn]

What if it looks like i have 300 or 400 left after my monthly bills? will i be forced into a chapter 13 even if i am under the median income? because, it may LOOK like i have that amount left but in reality i dont.

Since Congress was involved re-tooling the bankruptcy law last year (mostly in favor of our creditors - have to pay back those campaign contributions somehow! ), you can rest assured that figuring out whether you have "disposable income" or not is not as simple as subtracting your income from your expenses. That's the purpose of the new Means Test Schedule I and J - I swear it's worse than doing your taxes!

Luckily for you, if your income is less than the NY median, then it's 99% likely your lawyer can stop after completing Schedule I which captures current income. He will be able to skip Schedule J, the more complex part of the Means Test that examines your expenditures in detail. It would be highly unusual for someone under the median income to have sufficient disposable income to pay on a Ch 13 to the point the creditors make as much as they would in a Ch 7.

To ensure there's no question about qualifying for Ch 7, you and your lawyer should be doing everything possible to maximize your expenditures to what your bk district finds reasonable and acceptable for a two-person family like yours.

Here's a great link to ensure you haven't forgotten anything that could count towards your expenditures - http://www.ca-bankruptcy-attorneys.c...alculator.html . If you see some things here that you forget to give to your lawyer, be sure to tell him to add those so you can be sure to be well under the median income when you file.

Keep us posted on what happens with your case, ok? Come back with questions or just to vent anytime - that's why we're here!

[pambysue]

i am so thankful that i found this site! you have been so informative with all the information you have given me. i will keep you all posted as to how the future unfolds for me. hopefully, my daughter & i can have a nice holiday and put it all behind us shortly.