Help with Income Vs Expenses???

[brian]

[waziggy]

If you have a surplus of $67 a month over all monthly liabilities why the BK? Then again a trustee looking at your list might redline a few items in your list to help you save a little more for your creditors> sports & entertainment $100.00, alchohol $20.00, cell phone, dining out, buy generic at the groceries, cable tv - remember if you're really in financial trouble you usually have to forgo the luxuries of life and focus on necessities. One man's necessities may be anothers luxuries. Fine tune this list!

[brian]

Thank you for the feedback. Just an FYI... I DON'T have a surprus of $67.00 at the end of the month... the above expenses don't include my payments on about $80,000 of Credit Card debt and personal loans which is the reason I'm filling for BK.

Brian

[HRx]

Brian,

After glancing over all the information you presented, your DTI ratio is ideal for filing a Chp 7.

Good Luck!

[brian]

Thanks Todd.

Have another question...
I have 3 personal loans that are only 1 month old (about $25,000)... how long should I wait to file (90 days?) and should I make the monthly payments up till the day I file a Chapter 7?

[HRx]

Thanks Todd.

Have another question...
I have 3 personal loans that are only 1 month old (about $25,000)... how long should I wait to file (90 days?) and should I make the monthly payments up till the day I file a Chapter 7?

Brian,

I recommend defaulting on those loans for 6 months or longer.

-Todd

[HHM]

Expenses look fine, however, they might balk at the 401-K payments. Are you repaying a 401-K loan or is that your monthly deposit. In either event, the US Trustee may object.

[brian]

Thanks Todd and HHM-
Todd- stop paying on the personal loans might (will) cause the companies to take me to court and garnish my wages (i live in Washington)? If they did, would it be best to file BK before going to court?

HHM-
The 401K payments is a loan... 3 years. If the court denies that payment as a valid expense... does that me I HAVE TO stop paying and default... and pay tax penalties?

[HHM]

Regarding the 401-K, yes, it is a possibility. However, you can then amortorize the tax penalty as an expense since you probably cannot discharge the tax penalty (but check with an attorney).

As long as you file your BK before the loan companies get a judgment against you, you will be fine.

[brian]

HHM-
A little confused? What happens if one of the companies that gave me a loan gets a judgement against me and than I file for BK (either Chapter 7 or 13)? Would that judgement be listing as one of the unsecured creditors on the BK paper work and be discharge along with the other debts??

[HHM]

HHM-
A little confused? What happens if one of the companies that gave me a loan gets a judgement against me and than I file for BK (either Chapter 7 or 13)? Would that judgement be listing as one of the unsecured creditors on the BK paper work and be discharge along with the other debts??

Yes, in most cases, you can get the judgment discharged, but its not automatic, simply filing the bankruptcy does not automatically discharge a judgment. Its always better to file BK before a judgment than after because its easier to deal with. You can allow them to sue you, you just have to make sure you file the BK before they can get the default judgment.

Not to get to technically, but a judgment creates more rights for the creditor than they did before the judgment. Before the judgment, there was only a contract between you and the creditor for an unsecured debt, which can be easily discharged. Once they get a judgment, that judgment creates a new bundle of rights for the creditor, i.e. lien rights on your real & personal property, and wages.

If after one of your creditor's attains a judgment, and all you do is list that creditor, the unsecured debt (the contract right to payment) is discharged, but the judgment isn't and will survive the BK. You have to file a motion to avoid the lien created by the judgment.

[brian]

Thanks HHM!
One LAST question!
Can creditors ONLY get judgements by going to court (and notifying me when the court date is)??? Sounds like I need to plan on filing definetely BEFORE the judgment. Thanks again for all the information and help... I'm very stressed and nervous and looking forward to the date when my life can start over.

Brian

[HRx]

Thanks HHM!
One LAST question!
Can creditors ONLY get judgements by going to court (and notifying me when the court date is)??? Sounds like I need to plan on filing definetely BEFORE the judgment. Thanks again for all the information and help... I'm very stressed and nervous and looking forward to the date when my life can start over.

Brian

Brian,

Yes creditors will have to take you to court for judgements/garnishments. And you'll be notified in advance of the court date.

Also, most creditors make collection efforts 6 months or longer prior to seeking court action to aquire payment from you. So if you plan everthing well, your Chp 7 should go smooth.

-Todd

[brian]

Thanks everyone!

This discussion has help a lot and eased many of my fears.

[HRx]

Thanks everyone!

This discussion has help a lot and eased many of my fears.

Anytime Brian!

Don't hesitate to come back if you have more questions!

-Todd