Rush to file before birth of 1st baby.

[optimistic1]

Ok, here are some hypothetical questions, maybe a stupid idea, please dont insult me. I have scheduled 4 consultations with bankruptcy attorneys, and plan on using on to setup my case for us.

Right now, when I calculate on the means test my disposable income using the IRS standards, I have approximately $170 in Disposable income. Which I can totally afford to pay in a 5 year plan.

Question # 1
But, when I change my household size to three people (the baby), and child care costs, I need to instead list my actual expenses and determine the disposable income that way. Correct? Because with three in the household, based on my calculations, we would then be below state median.

Question #2
Should I wait to file until the baby is born, or should I just file now and setup the plan. What would the Trustee do when he sees my yearly expense report and tax returns and all of the sudden there is one more person in the household? Im hoping that the State Median Income isnt for some reason, lower than what it is now. Because if it is, we would be over the Median Income, and then we would have to use the Standards again, which if thats the case, my disposable income becomes negative $510. when I factor in child care costs, and increased irs allowances.

Question #3, worst case scenario.

If that does happen, cant I just adjust my taxes to bring my disposable income level up? And couldnt I just simply the other IRS standards to pay for child care costs and not list it, that would bring the costs up dramatically. I would just tell the trustee that we have my mother watching the baby, but actually we would be paying it out of the Food and Clothing Standards, or Utility Standards.


I desperately need to file, and cant qualify for a CH 7, I discharged in 2004, if I cant get help through the 13, I am going to lose everything. I would have to give up my first house, and maybe the car to pay these companies back their money.

Thanks for the advice everyone!

[rrockinggramma]

so in 2009, you will be past the 4 year discharge rule?

If you are so close to the edge, then you need to sit down and breathe and THINK carefully about what is really important to you to save.

You may have to give up some aspects of yourlifestyle to make this change permanent. (I also am a multiple filer so no offense intended here)

So look around you and decide what you can live with and what is ok to live without.

[NowImDownInIt]

I don't know what to say on the multiple bk thing, but I will say that you definitely should wait until the baby is born. The trustee will understand another person in the household. Babies happen. LOL.. I filed on July 12 of this year and found out that I am pregnant on July 24th... next year I am going to have a lot of stress with filing an amendment and such... better you wait (if you possibly can) and factor the costs of the new baby in.

[optimistic1]

I don't know what to say on the multiple bk thing, but I will say that you definitely should wait until the baby is born. The trustee will understand another person in the household. Babies happen. LOL.. I filed on July 12 of this year and found out that I am pregnant on July 24th... next year I am going to have a lot of stress with filing an amendment and such... better you wait (if you possibly can) and factor the costs of the new baby in.

So, you have to file an amendment when you increase household size, in our cases a new baby?

I can see how the baby will help, but I can see how it can hurt, if I end up, 9 months from, being over the State Median Income, then, I will have to use the IRS and Census Data to use as exemptions, which, If i do, and factor in the cost of the daycare alone, I end up having negative disposable income, which would then make me ineligible to file, but right now, without the costs of daycare factored in, I am eligible to file with +$176 leftover. So I am very confused an nervous about the outcome, and what the attorneys might say to me. These attorneys are not on the same page with one another I have noticed, some of them are not educated at all in bankruptcy law, but sell it like they are.

[NowImDownInIt]

If you file right now, you have that $176 for a payment but you're still going to have that baby and you are still eventually going to have the negative disposable and you are going to fail in your chapter 13.. that's 3 - 5 years of getting by with negative money. Not a great idea if you ask me. Think long and hard about even filing if that is what you are going to be looking at next year, because if it is the state median income will really mean nothing. You can qualify for a chapter 13 while being above median, but the question is if you will have a plan that you can make it through for 5 years.

[optimistic1]

I can make it through it the 3 or 5 year no problem, $176 is nothing compared to the $800 I was paying on all these credit cards that would have been drawn out over 30 years. I dont see your point in telling me that I will fail, please explain, other than saying I will fail. Chapter 13 is the way to go, I can handle it. Im just confused with all the semantics of these numbers and tests. Remember, the scenario I am depicting is disposable income, based on the means test, not in real life! The IRS Standards are farely liberal, I dont see myself spending that much money on clothing and food, it's just not a realistic number. We spend much less than that, so I will be ok. The problem is I am hoping that the state median income continues to rise, as it has over the last 3 years.

[NowImDownInIt]

Do you have any other children? I am not trying to be a downer, I'm really not. I just know that it all adds WAY up... and I know from my experience these past 6 months that having a toddler and having medical expenses for my pregnancy and all the other stuff that pops up in life is HARD. The first year of a child's life is the MOST expensive and getting through that in a 13 with negative disposable (even on paper) is going to be really tough. Child care, formula (if not breastfeeding), diapers, baby food, doctor's visits, gear... all of that adds up... the diapers and baby food and formula factor into the grocery portion of your plan... How big is your family? What's your plan?

[optimistic1]

just the wife and i, diapers should cost only about $50 a month, we are planning on breastfeeding, so if we need formula it shouldnt be that much. We have a very good insurance plan, nothing out of pocket only $15 copay per visit. Clothing and gear, we will be getting alot of it from my parents, and the rest as hand me downs from family members. We as a couple make it on only $300/month for food, we are savvy shoppers and eat lots of fruits and veggies and shop at Costco for bulk items. So I can add $200 to that and still be under the IRS allowance, not including clothing to it, but even then, we would be under. Child care for us is only going to cost $300-400 a month through a family friend.

Worst case scenario, if we cant get the 13, then my wife will file a 7 without me, we live in a community property state, the creditors might seek payment from me, but i have had several attorneys tell me they wont, so I dont know, this is alot to digest, im trying not to stress out, but i cant help it.


And like I said, the only reason we would have negative disposable income, is because of these generous IRS allowances the means test gives you, only if you are OVER the state median income, if the baby was born tommorow, we would actually be under the state median income, which we would then use the Schedules I and J to determine disposable income, which in that scenario, we would be on the plus side, to then have a possible confirmable plan, even if the creditors receive 0%.

[NowImDownInIt]

I just really think that you are underestimating the costs that you are looking at. It looks good on paper but you really have no idea until you actually have the child.

[optimistic1]

I cant say your wrong, but honestly we already reserved a spot for the child with the daycare provider, the cost is fixed.

Diapers, average use daily, 12 X 30 days = 360 diapers, cost for newborn diapers is $38 for 267 diapers, so I would need to make up the remaining 100, at a cost of about $15.00. Plus add in wipes and baby powder and other supplies add another $40 to the mix. Im still at about only $100, plus daycare and maybe formula, I would be spending an extra 600-700 per month.
Total for diapers is around $50, how could I underestimate that? Or the daycare costs?

We already looked at the baby store for clothing, the clothes are gently used and cost about $3.00 for tops and bottoms. Honestly that is really cheap.

The baby shower should supply us with about 3 months worth of items, my parents will help me buy a new crib and other items, so I wouldnt even have to worry about those.

[MOMof3]

Can you file the 13 and then convert to the 7 when the baby is born? Not sure if you are including arrears in a mortgage or car, etc...? We filed a 13 while I was pregnant & we were able to include all the costs of the baby in our plan to make our plan payment lower, but we had to file a 13 to save our home--but it sounds like you don't want the trustee to push you out of 13--maybe for the same reasons. I don't think the trustee will "notice" the baby on the taxes, etc... they will just be happy if you continue to pay--you don't HAVE to file a modification, so if you can make it work with the generous allowances, etc.. then the trustee isn't going to care that you've added more expense--they will only care if you fail to pay once your 13 is confirmed OR if you start having MORE disposable income (that they can tell from your taxes).

[optimistic1]

ok well then, that sounds somewhat re-assuring, I am comfortable paying anything less than what I budgeted for, which was about $243 a month, I could go less than that by adjusting some numbers.

We are only applying for Ch. 13, because we have way too much unsecured debt, we are current on the mortgage and the car, and we cant file a 7 cause I would need to be on it, and I cant, I filed a 7 in 2004, and if my wife files alone, the creditors will come after me for payments, we live in a community property state.

I just want to be able to file soon to get the automatic stay, these creditors are already calling everyday, its getting annoying. And we dont want to wait several months to file, giving them time to sue us and garnish our checks.