Timing decision

[lolasaurus]

So I've got a few questions regarding timing.

Before I ask the questions, I currently pass the means test with $35 of disposable income per month, although I'm significantly above the median.

I'm up for my yearly review at my company on Feb 12th or thereabouts. My company has frozen salary increases except for promotions, for which I have put a lot of effort into my work in the hope it would happen. I honestly don't know that I'll get a promotion in February at this time. I'd say 50/50 on that. Even if I do, I don't know that I'd get a raise (one might hope, though).

Question 1:
Should I file before or after the review/potential promotion? If I file before, I honestly don't know what will happen. If I wait, I may no longer pass the means test.

Question 2:
We just completed a big kitchen remodel. I did all the work to reduce costs. We had no choice in doing the remodel due to massive rot and mold throughout the kitchen. We did document the process in pictures and homeowners insurance refused to cover it. Since we have done this, we have made one payment on the credit cards that we used, and would presumably make another.

What are the chances of this being a problem, since we just added a fairly significant amount of debt? I am under the impression that the credit card companies would only be able to dispute each transaction, the largest of which was just under $3k (Cabinets) if I recall correctly. Is this correct? Many of the smaller ones might not be worth the effort, correct?

[Help!]

(1) If you receive a promotion that takes effect Feb. 12 it is probably too late already. 341 hearings are generally about 30 days after you file. You will be asked at your 341 hearing if there have been any changes in your financial status, including changes in income.

(2) Yes, you will need to wait 90 days to file unless you want to reaffirm the credit cards you used for the remodel. If you used cash from any other source, be aware that withdrawals from a HELOC can count against you as income on the means test. A common misconception is that paychecks = income. Income is money received from ALL sources in the six months prior to filing ending on the last day of the month you file. This would include checks you received as gifts, refunds, cash deposited, distributions from 401K/IRA, etc.

Having had a very arduous above-median Ch. 7, I would encourage you to learn as much as you can in this forum and be very careful what you do in the months before you file. We made many mistakes during those months just trying to stay afloat and it made our BK much more difficult than it should have been. "Passing" the means test on paper doesn't necessarily mean you'll pass the means test in court.

[lolasaurus]

(1) If you receive a promotion that takes effect Feb. 12 it is probably too late already. 341 hearings are generally about 30 days after you file. You will be asked at your 341 hearing if there have been any changes in your financial status, including changes in income.

(2) Yes, you will need to wait 90 days to file unless you want to reaffirm the credit cards you used for the remodel. If you used cash from any other source, be aware that withdrawals from a HELOC can count against you as income on the means test. A common misconception is that paychecks = income. Income is money received from ALL sources in the six months prior to filing ending on the last day of the month you file. This would include checks you received as gifts, refunds, cash deposited, distributions from 401K/IRA, etc.

Having had a very arduous above-median Ch. 7, I would encourage you to learn as much as you can in this forum and be very careful what you do in the months before you file. We made many mistakes during those months just trying to stay afloat and it made our BK much more difficult than it should have been. "Passing" the means test on paper doesn't necessarily mean you'll pass the means test in court.

Based on what you're saying, it's probably a wise idea to leave the credit cards shelved for say 90 days from today, and file april 1. In the meantime, make payments at least until we're sure that there won't be a promotion, and definitely on the recently used cards.

We didn't use a HELOC or anything, just credit cards. We honestly had no choice - I've got a 15 month old, I couldn't leave the mold there after I discovered it. I do fully realize that's not necessarily going to be relevant to a trustee, but it's my reality anyway.

Good information, thank you. I've been reading here for awhile and trying to get prepped for this whole thing. Fantastic site.

[Help!]

I hope you do get the promotion and that things look up for you soon. If not, it's important to find a good attorney early on. I think it's great that you documented the mold issue. If the use of those cards is ever questioned you're ready to go. Good luck!

[lolasaurus]

I hope you do get the promotion and that things look up for you soon. If not, it's important to find a good attorney early on. I think it's great that you documented the mold issue. If the use of those cards is ever questioned you're ready to go. Good luck!

Thank you! I hope I get it and we can avoid the whole situation.

Of course in reality, I'll probably just get enough of a raise to no longer pass the means test. lol