Finances in Shambles

[luckyinlove]

My finances are in sad shape. I have worked 4 months of the last 36 months, and have now racked up $93K in debt and still don't have a job. I have $70K in CC debt, and $23K owed to my dad. I've been researching bankruptcy, and it seems like what I need to do, but I'm really unsure of a number of things. I've read a couple books and met with one lawyer, and have spent hours reading through this website. All very helpful, but questions remain.

Mostly I'm concerned that if I finally get a job it will prevent me from getting a chapter 7, that it will become a 13.
I understand that they use the last 6 months income for basis to file, and mine is ZERO, so that's ok, but what happens if I finally get a job? I was close to getting one for $120K/year, but it fell through. I have a possible $75K/year job. Should I file now before I get a job, or maybe just get a low-paid job in the short-term until the BK is done? Seems stupid, but the cost of paying back this huge debt will kill me, and I'm not far off from retirement age, I don't have a lot of time to save, let alone play catch-up with years of losses.

My understanding is California allows basically you to keep $21K in assets. I have maybe $5k of cars and a boat and furnature I still have 20K in stocks that I can sell at substantial loss.
The thing is my mother just passed away and left me $15K, so now I have a lot more than $21K in assets, so if I file now, I'll have funds to pay creditors, so it seems I'm best to just keep using up the money until it runs out. I have a business that I've spent a lot on, but no income yet, and I'm now ready to try and start selling things and get it going for real, but if I file BK now, can I even still pursue it?

My sense is right now I should not get a job, sell my stocks and give my business a go for 3-4 months, and at that point file BK if the business doesn't take off. I note that previously I was $40K in CC debt, and my business turned around and I paid it all off plus $200K more, that was a while ago, ran through all of that and more by today. Well that's my sad story, could use any input from you folks.

[ameliabedilia]

The main thing to think about when filing a 7 vs a 13 is you disposable income at the end of the month. Are you using the money from your mother to pay your living expenses? You need to add up all your expenses each month not including any you want to include in the bk. If you get a job for $75k and you are a household of one, it will probably cause you some headaches. A 7 could still be done, but you will fail the means test and it will be more work to get it done. If you give us more info and some numbers you should get some responses on this.

[Dollar Bill]

Sounds like you need to burn through the 15k with non-luxurious expenses. Dentist, Insurances etc. Do not take a high paying job until you have... I believe filed or completed your 341 meeting. Just make sure you do not have the more than 21k your allowed.

It's my quick two cents. I don't know more of your situation, to give a more calculated opinion.

[debtmonster]

Does that $21k include a house or just personal items like cars, jewelry, money in the bank, etc? Also, that $15k, is it in the bank or cash in hand?

[keepmine]

Another option on the inheritence is, place it in exempt assets like, an IRA.

[luckyinlove]

Lawyer says no CH7

Well, I did get the $75K job offer. I meet with another lawyer today, and she says that with the 75K job, no way chapter 7, would have to be chapter 13, because court looks at current income, not just 6-months previous, that is only a qualification for Ch7, it would be converted to ch13 when it comes to trustees meeting and your income had changed. So really taking a low-paying job, and going ch7 is the best BK approach, and doing it now even with the extra $15k in cash to pay creditors, since some of it goes back to my dad, and then I get fresh start sooner rather than wait to burn through it.
But ultimately given the multiyear long search for a job, I really have to take this job offer, so I'd be looking at ch13.
BTW, I have two kids to take care of.

My view is ch13 would be a nightmare for me, I don't want to be tied up in the legal system for years even if it might shave off some debt. So for now I'm going to tough it out and see if I can use the cash on hand along with the new salary to keep making minimum CC payments and get the business to go on the side. My payments have always been current, my credit is excellent! and with the new income maybe get another play on 0% interest peter to pay 25% paul. So looks like I'll kick the can down the road for now and hope for the best, and in the meantime I'll be establishing as much as I reasonably can put into my IRA so if it all snowballs into mega disaster in the future I'll have some left there, which is really my primary concern.

thanks

[debtmonster]

Yeah, that's a tough call. And with that income, it puts you into a higher tax bracket. A friend of mine makes $80k and complains all the time that he's broke.

[PaKettle]

If you can make it without filing bk then don't file.
If you have trouble you can always try and do a Ch. 13 later.

[debtmonster]

Once I learn what the maximum things they can do with judgments and law suits, then I will change my ideas about filing. So far, nobody has ever answered my questions about these.

[qwertysue]

Once I learn what the maximum things they can do with judgments and law suits, then I will change my ideas about filing. So far, nobody has ever answered my questions about these.

Be proactive---do some googling using the terms you are asking about. I just googled for 2 minutes and found tons of information about judgments and lawsuits and Florida.

[HHM]

Once I learn what the maximum things they can do with judgments and law suits, then I will change my ideas about filing. So far, nobody has ever answered my questions about these.

It's a question of not caring. If you really think you will be asset-less and never have a job for the rest of your life, then it really does not matter if you have judgments against you.

Here is what can be done with judgments (depending on what state you live in)

1. Garnish wages
2. Seize any non-exempt assets (but the burden is on you to prove the asset is non-exempt, thus, they can "take" the asset and you have to go to the trouble to get it back). Thus, if you have a business, the creditor can show up and literally take everything in your place of business.
3. Lien you home
4. Judgments are permanent.
5. Permanently trash your credit.
6. Call you in for a deposition to find out what your assets are?
6a. If you fail to show, issue an arrest warrant.

Granted, if none of those things matter to you, then by all means, don't do anything, but most people don't like looking over their shoulder for ever, most people like to have the freedom to do things financially without lingering issues.

If you really think about it, the question is really, why not file BK?, it is not as if BK makes things worse. I think your false assumption in your whole delusional world, debtmonster, is that somehow, you think BK will make your situation worse, which is simply not the case. What possible downside is there to you filing BK.

[Boscoe]

I have to disagree whenever I hear the term

"Permanently trash your credit". There really is no such thing...............

7 years and it is gone, unless bk ch 7 which stays for 10.

10 years is a long time, but in no way is it permanent. And after 2 years, things do get alot better. Not A+ credit scores, but much better.

[Flamingo]

Once I learn what the maximum things they can do with judgments and law suits, then I will change my ideas about filing. So far, nobody has ever answered my questions about these.

See my response to you as to your postings in the "Collections" section of this forum.

[Flamingo]

I have to disagree whenever I hear the term

"Permanently trash your credit". There really is no such thing...............

7 years and it is gone, unless bk ch 7 which stays for 10.

10 years is a long time, but in no way is it permanent. And after 2 years, things do get alot better. Not A+ credit scores, but much better.

Judgments are permanent - they do not go away until satisfied. If they are lifelong your heirs and estate will eventually have to deal with them and pay them from your estate before it can be closed.

[HHM]

I have to disagree whenever I hear the term

"Permanently trash your credit". There really is no such thing...............

7 years and it is gone, unless bk ch 7 which stays for 10.

10 years is a long time, but in no way is it permanent. And after 2 years, things do get alot better. Not A+ credit scores, but much better.

That is in a "perfect" world...but again, you are working under the false assumption that the debt buyers and collection agencies will actually abide by the law. Thus, you must constantly dispute entries each time the debt is resold. This thread sort of has gone off on a tangent, we are not saying BK permanently trashes your credit (in fact, BE improves people credit), what were saying will ultimately trash credit is doing nothing and allowing charge-off, judgements, non-payment to simply accumulate against you. Those items are much tougher to deal with because of the unscrupulous nature of the debt buyers who end up with the debt.