Am I a good candidate for Chapter 7??

[nc73]

ah another one taking advantage of the system.

[danaf]

I'd say no, your not a good candidate for bk7 at this point. :-( Sorry.

[HakunaMatata]

Scott-

I'm not going to harshly judge you for exploring BK. In fact, I commend you. You're gaining knowledge and assessing your financial life. However, I don't feel you're a strong BK candidate.

Bankruptcy is a business decision. This decision should only be made after other financial recovery attempts have failed. You've clearly demonstrated your living expenses/debts and you appear to be convinced BK is the only means to rectify your current situation. Others have challenged your position as you haven't demonstrated a willingness or desire to explore alternatives (aside from reduced-cost living with your brother...which happens to be an excellent business decision). The only sense of change I gain from you is you wish to create a financial picture that is insolvent. You're willing to take on additional living expenses in order to file. This isn't the type of change others are urging you to explore. You're intelligent, you're successful, you make a great wage for your age (despite living in a high-rent zone). Suspend notions of BK (better yet, pretend BK doesn't exist) and try to determine how you can begin to live comfortably. What changes need to occur? How can you adjust your budget to move forward on your own (don't incorporate any BK compare/contrast numbers here )?

To me, your main concerns and primary financial barriers are related to independence: personal transportation and housing. As others have suggested, you have leverage in the vehicle domain. You can sell the bike and/or car. Even if you had to take a loss on the car, you may ultimately come out ahead. Run numbers and factor in costly maintenance. If the car will cost you more to keep, dump it. There are plenty of afforable and practical cars on the market. Sure, you may not immediately be driving the car of your dreams. You have plenty of time to achieve this goal. Is throwing a protein bar in your pocket and eating it when you're hungry for breakfast more cost-effective than purchasing food at work or in a restaurant? Would purchasing a small refrigerator and buying food rather than eating out daily yield financial benefits? Is it possible to continue renting from your brother to avoid doubling your rent payment? On the extreme side, what would happen to the $18k accidentally paid to you if you quit your job? Just as you're struggling with Schedule J, each dollar counts. As you assess various elements in your financial world, force yourself to explore alternatives.

I recognize financial flux is on the horizon. Again, I commend you for preparing for change. You will be making less. When this occurs, it's important to spend less. You've done a service to yourself by outlining your current expenses and forecasting your financial future.

My best advice is to eliminate BK from the current picture. Break down your world to basic needs and make adjustments. If you've exhausted all attempts to avoid BK (and none are geared toward becoming a BK candidate), explore this option with an attorney.

Wishing you success!

[LSUTiger32]

Scott, you haven't posted in a while so I hope that you aren't upset. We're are all trying to help. That's 11 people who have been there and done this that think you can work out of this. Again, if you lose that much income it may be another story. Hope you appreciate the advice.

[shabam]

If you don't want the cars I would just stop paying and then save up for the lease deposit. Regardless of what you paid or did not pay prior, as long as you have the lease payment on the day of filing, this is all that counts and what can be entered on your forms.

As to the lawsuits and garnishments, there are a lot of variables at play there. In particular, each lender has their own policy on the matter. But if you are filing, a judgment does not mean much and would be canceled out anyway. That is, if it came to that.

[frogger]

since I am just renting a room right now I have to eat out, so my food is costing me like $700 a month alone... I spend roughly $8 per meal, 3 times a day $24 x 30 = $720

You need an introduction to Romen Noodles and hot water. You can eat for around 10 cents per meal. Renting a room and "have to eat out"??? With a microwave and hotplate, I can cook a complete meal, wash the dishes in the sink or tub, and eat like a king dirt cheap.

[StartingOver08]

The OP likes his toys (car and cycle). He seems to be looking for a way to keep both by filing.

As the others have said: BK is not for you. If you see your income decreasing - now is the time to get rid of the toys (car and cycle). Have a talk with your brother, you are now going to be there long term rather than short term. You need to have access to the kitchen for meals and stop using excuses to eat out. Get the mini fridge and microwave and stop eating out. If you seriously sit down and tackle your debt two things will happen: 1) you will have gotten through a 'difficult' time by doing the right thing and 2) you will not find yourself in this spot in the future because you will not sign up for toys so easily next time. Now, if something were to happen in the future that required a BK, that is a different story - but you are far from BK material. Do what you know you need to do - not what is easy.

[hereforinfo]

The numbers don't add up for bankruptcy. The debt to your employer is something you have to pay back. The upside down portion of your vehicles won't be discharged if you want to keep them. So that only leaves $6700 in credit card debt that you want to discharge? That's ridiculous. It will cost you 1/3 of that to pay for an attorney and file, and then your case would likely be dismissed because you really aren't bankrupt.

You wouldn't be able to keep both vehicles anyway. They're not going to allow you $900/month payments for 2 vehicles for ONE person. Your food expense won't fly either, no one HAS to eat out every single meal for $24/day.

1. Buy a small fridge, toaster, and microwave for your room. You can make toast or a bagel for breakfast, pack a sandwich and fruit for lunch, and microwave your dinners. You could easily save $400/month.

2. Get rid of the motorcycle immediately. The longer you keep it and make the payments, the more it depreciates and the bigger potential deficiency. If it's upside down and you can't sell it, call the lender and try to negotiate something, see if they'll let you turn it in and write off the deficiency. You're not upside down by very much so this may work. If they won't work with you, just let them repo it and deal with the small deficiency if and when it happens. In the meantime, you are saving $310/month. You absolutely CANNOT keep both vehicles regardless of whether you file bankruptcy or not.

3. Talk with your employer regarding the loss of overtime and the loan payment amount. Tell them you can't get by with both. They need to either reduce the payment or let you keep working overtime to help pay it back. Something else isn't adding up. You stated that they took "a couple hundred dollars a paycheck" for 14 months. That's only $5600. How did you get to the rest of the $18500? I don't think we're getting the full story here.

Ok, so if you net $4200/month after taxes and insurance are deducted:

Rent = $655
Car = $586
Gas/maintenance = $550
Food = $400
Employer payment = $1000
Phone & internet = $140
Miscellaneous (personal care, medical copays, entertainment)= $275
Credit cards = $175
Total = $3881

That leaves over $400/month that you can put in savings and/or help pay down the principal on your car so that you can get out from under it and buy something with a much lower payment and better gas mileage. As soon as you get out from that car payment you will have extra money to afford your own place close to work, saving you a lot more money.

Another option is to let the car go and while it takes them 3 months to repo it, you will have saved nearly $1800 in payments plus $1200 from trimming your budget as I showed you above. You can use that $3k to buy a clunker to drive while you save for something better. Then you have $1000/month plus a couple hundred less in gas = $1200/month to save for an apartment and have a cushion to settle on the deficiency later on. Then you could easily chip away at that small credit card debt.

[banca rotta]

To answer your original question : "Am I a good candidate for Chapter 7??"


The short answer is no. If you decide to file a chapter 7 please post the results here so we can learn from your experience.

Thanks

[jribe]

you'll need to use acutal numbers on your schedules. Means test if different; but all actual expenses are listed elsewhere- and will determine if you can fund a chapter 13.

You could go and rent a place of your own- and then have that expense to help yourself out.

Also- i don't know about owning two cars; i would think the trustee would think that is abusive - since the payments are so high.

Talk with a good local attorney.

Good luck

Hey Guys,

Sorry for posting twice, but I figured I would just list my entire situation, numbers and all, and see if anyone on here can tell me if I would have any problems filing.

I am in a Northern California District. I currently rent a room from my brother and his fiance, and pay only $665/month in "rent", but I am only living here temporarily. That $665 includes utilities.

The IRS standards for my area are:

Median Income Family of 1: $4099
Food & Clothing: $517
Utilities: $542
Mortgage/Rent: $1452
Transportation (2 vehicles): $522
Vehicle Ownership (2 vehicles): $978 ($489 each)

My numbers:

Monthly gross income (6 month avg): $6093
Monthly Taxes: $1790.56
Telecommunications: $140 ($100 cell phone, $40 internet, both required for my work)
Medical: $80.53
Disability: $37.50
Car1 Payment: $586.22
Car2 Payment: $310.11
Rent: $665
Gas (long commute, drive alot): $450
Car upkeep, lots of miles on my car a year: $100/month
Unsecured Non-Priority debt: $41,700 ($18,500 debt to my employer paid back via payroll deductions, close to $1000 per month. $6,700 in credit card debt. $16,500 in unsecured debt from upside down in vehicles).

Heres the deal.

I pass the means test if I use the IRS standards for Housing and utilities. If I switch and put in what I ACTUALLY spend... I fail. The problem is... I don't want to live with my brother forever. I'm 23 years old, and there is no way I can afford to get my own place.

I am way too upside down on my vehicles, so I cannot get out from underneath them.

What do you guys think?

[LSUTiger32]

I think Scott realized that he wasn't going to get the answer he wanted and left. I hope things work out for him.