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    Any advice?

    I've been debating bankruptcy for awhile. In trying to put it off, I may have gotten myself into more of a problem. I just had a car repossessed. The bank offered to settle the debt for $1500. I agreed. I owed over $14,000. Will the $12,500 that was charged off count as income? Or will it show that I was favoring a debt? I'm right at the median income, so will it put me over? I can't pass the means test, I actually don't have a lot of expenses so I need to stay below the median.

    Also, I'm a teacher. I want to quit my job and move out of state. I can't quit until June since I'm under contract for the school year. So I can't move yet and I have 2 big dogs so I can't rent. I want to include my house in the bankruptcy. Can I file now and add the house later. I have to file soon since I only get paid for 10 months and I won't pass the income limit if some of the summer months aren't included.

    #2
    There is no tax liability for debts discharged in bk. If you get a 1099C, IRS form 982 will take care of any potential tax issues.
    Why would you agree to a settlement if, you're going to file BK anyway? That's money wasted. If you haven't paid anything yet, don't send a check.
    Just stop making your mortgage payment now. You'll have 6 months or more before you have to move.
    When you file, you list all of your creditors in the filing. AS long as you don't reaffirm the house, you have no liability for any deficiency balance.
    Have you spoken with any lawyers yet? Most give free or lowcost initial consultations. Interview a few and see what they say. Don't get rushed or bluffed into making a bad decision regarding a settlement.
    Also, staying below the median is no guarantee that you qualify for a Chapter 7. You also need to have insufficent disposable income to fund a Chapter 13.

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