Have to file CH 13, but our numbers have NO disposable income! Please help!

[justbroke]

Yeah, I meant to mention "non-consumer" and never got back to that point.

[despritfreya]

You have $150k in personal guarantees and you rent. Are you telling us that your other debt (since you do not have a mortgage) is in excess of $150k? If not, then your income is irrelevant as you would be a non-consumer chapter 7. Remember, if you ran up that personal credit card for business related items, it is not a "consumer" debt.

People, do not forget. . . If your non-consumer debt exceeds the total of your consumer debt (incurred for family or household purposes), you do not have to "qualify" for a 7.

Based upon your post your consumer debt DOES NOT exceed your business type debt and you CAN file a 7 regardless of your husband's income. Take that back to the attny and see what he says.

Des.

[justbroke]

An attorney informed me over the phone that due to my husband's salaried income (higher than average) and because we need to Bk the personally guaranteed debts from business which are up to $150,000, that we have to file Ch 13, and don't qualify for Ch 7.

Let me get back to this point later...

Anyway, my question is, what do we do if our income and budget can not show any disposable income? I think if I fudge numbers a bit, I can maybe show $100 disposable, but really, the numbers don't lie!

If you have no DMI, then you qualify for a Chapter 7! Do not let any attorney tell you that you don't qualify for Chapter 7 simply because you are over the median. It is all about the numbers (and DMI).

As for the business, there is no need to file a specific chapter of bankruptcy just to discharge a personal guarantee on business debt. The simple fact is that a Chapter 7 will discharge your personal responsibility for business debt just as well as a Chapter 9, 11, 12, or 13.

Getting a discharge in a Chapter 7 is all about what your income, less "allowed" expenses, looks like after you make the calculations. I would have shopped at least 5 attorneys if I were over-the-median income and wanting to file a Chapter 7. Since you don't own your home it may be a little tighter on qualification, but you won't know until you run the numbers through the Means Test.

[KristieCA]

Please post ANY advice, we are desperate!

Because we were personal guarantors for a failed business through our Corporation, we have creditors galore coming after us. An attorney informed me over the phone that due to my husband's salaried income (higher than average) and because we need to Bk the personally guaranteed debts from business which are up to $150,000, that we have to file Ch 13, and don't qualify for Ch 7. The debt collectors are ready to take action against us, as they have obtained a judgement and can levy any time if they choose, and we can not risk having our bank accts frozen. We also can not afford to retain an attorney to fight them or to reduce the debt. We are in a corner. I check our bank acct everyday to make sure we still have money there to clear for checks out against it.

Our budget is very tight, and we live paycheck to paycheck to just pay bills, even though my husband makes good money "on paper", the cost of just living is high here in our city of southern CA- we rent a modest home, drive gas guzzlers and have 3 hungry and growing children who are not dressed to the hilt or get to shop very often-it's just difficult to pay everything each month. I often have to write a check for groceries in hopes that it doesnt clear before we get paid in 2 days. We never eat out, Starbucks is sometimes a treat on a weekend. But NO splurging or even vacations for years! We also have no assetts, no savings, no real estate and thing to hide. We still have 2 yrs left on our car payments, and about $13,000 in our own credit debt that will be wiped out too. We have been making minimum payments of $15 and $25 a month on these FOR YEARS! (

Anyway, my question is, what do we do if our income and budget can not show any disposable income? I think if I fudge numbers a bit, I can maybe show $100 disposable, but really, the numbers don't lie!

Help us figure out the best plan for us, and if a BK will be possible for us.
We need a fresh start for us and for our children!
Thank you!,
Kristie in CA