The beginning of our journey...

[EmmaPeel007]

So here's the first step on our thousand mile journey. Actually, its the first two steps, since it's a two parter.

I heard back from our attorney today, much sooner than I anticipated. I think this is a good sign that we will have a good relationship. Just so you know the backstory - I'm married but filing on my own since the bulk of our debt is in my name only - around $42k. I think we were over the means by $6k-$8k. Now here's what he had:

1) As I am a party to a family trust this may complicate matters. The only way I inherit anything is if my 46 year old cousin dies without having children. If he does, then I would stand to inherit around 200k less any taxes.

My lawyer said that if I file chapter 7 they may want to leave it open in case I actually do get the inheritance. Has anyone else encountered this? What happens if they "leave it open"?

2) He also said that I may not qualify for Chapter 7 because it shows we have a large disposable income and thinks we might be a Chapter 13 with payments of $830 a month. There's no way we can afford this payment now. Basically, because I had to average our income over six months from January to June, it looks as though we are bringing in a lot more. My husband was unemployed the first six weeks of that time (he had been out of work since the previous October), and then he got a job that pays $12 an hour. When he started they were in full-blown crunch mode, so there was a ton of overtime from mid-Feb to the beginning of June (he worked 6 days a week, at least 60 hours a week). Now they have said they want to try and eliminate all that overtime and move from one shift to two, so he's had almost no OT for the past month and it looks like its going to be that way for the next few months. Basically, his take home went from close to $700 a week to now $420 a week - a massive difference. Also, my lawyer did not take into account my husband's personal debts (Capital One $2k, Dell $1,200, Best Buy $500 and a Sears $250).

I've already sent my lawyer an e-mail detailing this information, and I'm sure I'll hear back from him soon. Still, I'm curious - has anyone else been in this position? Any wisdom to share?

Thanks!

[keepmine]

Do not be pressured into filing a premature Chapter 7 or, a 13 if you will eventually qualify for a Chapter 7. Were I you, I'd use the time you're waiting to let your husbands income "season" and interview another couple of lawyers.
I'd not even mention the trust. In the unfortunate event your cousin dies within 180 days of your filing then, you got a problem. No way in the world I'd leave a bk open just in case.
Sorry, but I'm far from impressed with this lawyer.

[EmmaPeel007]

Thanks so much, Keepmine. This is all new to me, so it's really good to have everyone else's input.

I did hear back from him today, After explaining our current situation in greater detail, he's decided he's going to try and draft a Chapter 7 and then he would like both my husband and I to go in and talk with him. Should be meeting with him in 3 weeks, so we'll see what happens then.

[justplaintired]

The stop of O/T pushed us into BK. What if you wait to file until your income reflects the lose of income? When did you stop paying? Is there a hurry to file due to a garnishment or a lawsuit? If you could hold off for awhile, which is what we are doing, then file when your income is reflected in the 6 month look back maybe that would solve your problem. Check with your attorney. We quit paying in Jan and are waiting to file once again. It's a pain and I want this over with so bad, but I want to make sure our timing is a close to perfect as it can be.

I don't really understand the family trust. Is this money coming to you soon? Do you know a date? I am due to inherit a large chunk of money but my parents who are alive and well have to die first and I am praying that will be a long way off. I guess I am confused by this. Why if you don't have a date would this be included.

[EmmaPeel007]

Hey Justplain, glad to explain.

Basically my grandmother, who was pretty smart with her money but pretty bad at relationships, set up a trust fund to take care of my cousin/uncle (he was my aunt's son - my grandmother adopted him) in the event of her death. She did this because my cousin has been an addict since his teen years and in and out of both rehab and jail his entire life. He lives in the house she paid off that is owned by the trust (when he's out of jail), gets an allowance and the trust pays for all his utilities and housing expenses. He is currently 46 or 47, I believe.

Now, if he should pass away without fathering any children, my brother and I would each share in half of the estate. We would each get around $200k less taxes. If he has kids, we're SOL.

I'm not counting on him passing away any time soon, because my grandmother died over 10 years ago and he's been able to survive alright. Longtime addicts pretty much know how much dope they can do. Who knows? Maybe even one day he'll clean up and become a father. I would hope that he could find some peace in his life.

So the money is nice to think of in a "what if" kind of way, but I'm not sure if we'll ever inherit. I just gave all the paperwork to our lawyer in the spirit of full disclosure. I don't want anything to come back and bite me on the ass when we get the ball rolling.

[justplaintired]

Thanks for the explanation. So it appears that your safe on the trust. We are in a will as well, actually I am in 2 wills both will be considerable sums. However the thing is all parties are healthy and I wouldn't want it any other way. One is my sis who is a Vice President of a large investment co and she is younger, never married, no kids. If she passes first I inherit, if I pass first, my kids inherit. Either way she is 44 and in very good health, THANK GOD. The other is my parents very smart with lots of investments. This money goes to myself and my sis. Both are healthy THANK GOD.

So these inheritances will come someday, but honestly I am hoping no time soon. So mentioning them in our BK wasn't even thought about. I guess I just think that unless this person has some terminal illness, your not likely to face the inheritance problem before you BK is behind you.

It's funny to me how both my parents and my sis are so smart with money and I am so totally dumb. Sometimes I wonder what ever happened to me. I never could save, my sis saved every dime she had, she even saved candy until it went stale, not me, I gobbled it soon as I got it. Probably some psychiatrist would have a blast with me.