Means test/Median income

[Tromploi]

Haven't posted in awhile. FINALLY got my 2007 taxes done and was able to get the packet to the atty. Was planning on a 13, NOW they're saying we qualify for a 7. Which is AMAZING because we made $120K last year, our state (CA) allows for about $77K for a family of 4. However, we are both self employed (I own a small business) and we have enough expenses to qualify.

I had never even considered a 7. We owe about $120K in CC debt, have 2 cars we owe on, one has equity of about 10K in it, the other none. We would like to keep the house too. The paralegal says they can use, and I don't remember the term exactly but a wild card something for these things? None of these are behind.

Also, when doing our 07 taxes we learned that we owe 23K to the IRS. Shoot me now. Would be SOO nice if the 7 goes through, but I am still not holding my breath. Anyone see any red flags with what I've said?

[Tromploi]

Okay well may have spoke too soon. Might not be a 7 after all. The PL explained the wild card exemption, they can protect up to $21K worth of assets. I sent in new business sheets this AM and she is updating the means test, may be a 13 after all. The advantage to a 13 I learned though, is they can roll in what we owe to the IRS in the payment, so that would be a good thing too.

Just sharing what I am learning,,,,

[liz417]

Nothing like the paralegal getting your hopes up... Sorry

[TEW]

It doesn’t matter what you made last year. How much did you make in the last 6 months.
It also does not matter if you file chapter 7 or 13 you are going to pay the IRS 100%
The bad thing about a 13 is you will be in BK for 3 to 5 years. Is your job secure? Make sure all your expenses are included gas, child care ect. Go over it with a fine toothed comb.

[StartingOver08]

Also, you can make payment arrangements directly with the IRS anyway even if you are in a CH 7. I made an agreement with the IRS immediately before filing - in fact, I told the IRS I was going to file so they put me on a very, very low payment plan for 5 yrs. (You are allowed to pay more at any time without any penalty ).

With the IRS you want to make the payment arrangements for as low as possible, but pay as much as you can to accelerate the payoff date. You have to file on time with the IRS for all future returns while in the payment plan. But all in all, they are rather easy to work with IF you address it right away.

[Tromploi]

We made too much this past 6 months, even with our expenses, and I listed them ALL trust me! She confirmed today we are a 13. I know we'll pay the IRS 100%, but at least this way we can roll the IRS into our BK payment. Our tax guy said our IRS payment would be pretty high ($1500/mo), but we didn't tell him we are filing BK (just weren't ready to say the words outloud yet), so the atty says it will be lower this way (around $400). My job is secure, own my own business and it's doing very well. Thank God for that. Guess I'll go back to the 13 forum, sigh. Fun while it lasted. Thanks for all the help.