questions after consultation today

[brainless twit]

After a lot of discussion, my husband and I went for a BK consultation this morning and we've decided to file. There are a few things bothering me, so I thought I would ask all you experts out there for your opinions/experiences.

First - our car. We owe $3000, it's worth around $2000. The attorney asked us to consider letting the bank have it since we owe more than it's worth and it's needed a lot of repairs lately. He works with a finance company who would loan us the money for another car PLUS the money to file ($1300). There is no way we can come up with the $1300 on our own. Plus, I'm scared if we reaffirm the car it will break down in six months, then we'll need a new one post-BK and may not be able to get it. I know the interest will be high, but it will be high no matter what once we file.

So is this okay? Can we take out a loan this week, then file next week and reaffirm the new loan? Somehow it seems like that would be fraudulent, even though we wouldn't be borrowing the money and then filing on it. I would think that borrowing a large sum of money would be like charging up credit cards just before filing, except we wouldn't be asking for the new debt to be discharged. Has anyone done something like this?

Second thing - jobs. I recently finished grad school, and if I take a full-time job we won't qualify for BK7. Obviously, I'm going to hold off on the job search for now. My student loans come due in 2 months, though, and I'm scared that it will throw off our ability to pay everything even after BK. Is the court going to care whether we fit into some kind of debt-to-income ratio after discharge, or do they get involved in that? Are they going to expect us to conform to a certain budget?

I've got too many thoughts and I hope this makes sense. I would appreciate any thoughts.

[BassBoy]

You can let the car if you feel that it could be a real headache with repairs and such. On the other hand, owning the title is better.

I'm not a big fan of taking on any laon/debt so soon before filing. My opinion is if you take on a loan without any intentions to repay it or file BK on the debt (even if you reaffrim), it's loan fraud.

I believe your income is 6 months you file. Although, once you're discharged, it's a year that the Trustee can reopen your case if you've had a substantial increase in income.

Anyone else got more to add?

[SinkingFast]

Maybe the attny is talking about 722 Redemption or some similar program. Several past posters here have gone that route. Bought a different, newer car at the time of filing. I know your attny has to recommend you. You can't contact them on your own. Maybe that's what your attny is talking about.

BUT, I don't like the fact that he/she's wanting you to finance your filing fee on the car loan. That sounds unscrupulous to me.

If you are able to file just prior to the start of your Student Loan Payments, they should go automatically into Forebearance for the duration of your BK. Typically a Ch 7 Automatic Stay lasts 90-120 days or so. And if your Student Loans are put on hold for BK, that's generally an Administrative Forebearance and isn't counted against you for another time when you may need a little help getting over a financial hump.

[brainless twit]

BUT, I don't like the fact that he/she's wanting you to finance your filing fee on the car loan. That sounds unscrupulous to me.

What other options are there? I don't mean this in a smart aleck way; I genuinely want to know. We have no family that could loan us that kind of money, nothing of any value to sell other than things we need, and even without paying our cc minimums, we have exactly enough money to pay bills and buy groceries. I don't see any other way to file unless we borrow the money along with our car.

Is there some secret way to do this that I don't know about?

[saucey]

You can let the car if you feel that it could be a real headache with repairs and such. On the other hand, owning the title is better.

I'm not a big fan of taking on any laon/debt so soon before filing. My opinion is if you take on a loan without any intentions to repay it or file BK on the debt (even if you reaffrim), it's loan fraud.

I believe your income is 6 months you file. Although, once you're discharged, it's a year that the Trustee can reopen your case if you've had a substantial increase in income.

Anyone else got more to add?

do you mean that the trustee can watch you up to a year after discharge?

[SinkingFast]

What other options are there? I don't mean this in a smart aleck way; I genuinely want to know. We have no family that could loan us that kind of money, nothing of any value to sell other than things we need, and even without paying our cc minimums, we have exactly enough money to pay bills and buy groceries. I don't see any other way to file unless we borrow the money along with our car.

Is there some secret way to do this that I don't know about?

No offense taken. It's the same struggle many of us have made/are making.

I know some posters that were here before me. They are still working on their attny's fee.

Many attny's take payments. You pay what you can when you can. When you've paid enough, the attny files your BK.

Timing is the tricky issue. How long can you go without paying debts before the Creditors move to pursue you legally. And there's no hard and fast answer to that question.

We're at 9 months of missed payments. 3 accts have moved to collections. One of the collectors has sent an ominous sounding letter that eludes to imminent legal action.

I read one poster here who said they were sued at 5 months while many others went well in excess of a year not paying payments before they filed BK.

We paid our attny's and filing fees off proceeds from selling a truck. We owed the IRS over $8K for taxes for last year with no way to pay. We sold the truck to pay that. Took the extended warranty plan to the local Chrysler Dealer and cashed it in. That's how we got our money.

Other folks here have been holding garage sales, selling stuff on eBay, you name it.

We are the same as you. Every penny that comes in goes out on rent, utilities, gasoline, food, etc. I don't know how we coulda kept the truck, paid the payments, and kept up the insurance anyway.

[SinkingFast]

do you mean that the trustee can watch you up to a year after discharge?

The Trustee is entitled to sieze any windfalls you may have within 180 days of filing. Old, rich, Uncle Fred dies and leaves you his millions within 6 months of you filing, the Trustee can come after the money, up to the amount you owed your Creditors total. Win the Power Ball Lottery grand prize, same thing.

The Trustee also has the right to reopen your BK for up to a year after your BK is Discharged and Closed if the Trustee suspects fraud.

http://www4.law.cornell.edu/uscode/h...7----000-.html

Read Sections d and e at the link above.

[razorguns]

The Trustee is entitled to sieze any windfalls you may have within 180 days of filing. Old, rich, Uncle Fred dies and leaves you his millions within 6 months of you filing, the Trustee can come after the money, up to the amount you owed your Creditors total. Win the Power Ball Lottery grand prize, same thing.

The Trustee also has the right to reopen your BK for up to a year after your BK is Discharged and Closed if the Trustee suspects fraud.

http://www4.law.cornell.edu/uscode/h...7----000-.html

Read Sections d and e at the link above.

not so fast:

"and knowingly and fraudulently failed to report"

so you'd have to have won the lottery, and FAILED to report it. Which of course is impossible since you'd never ahead of time you'd win.

and it's after a "hearing"

Those acts are there primarily to guard against people committing fraud. Not like the trustee is going to elecontronically poll every bank in the country, on a weekly basis, to see if you have a checking accoutn and how much is in there.

The trustee can't even pull up your tax records and u have to do it for him.

They're not as computer high-tech as u think. Most of the bk process is based upon your honesty.

r

[brainless twit]

So can I assume, then, that if I interview for a job AFTER discharge and accept it, that wouldn't be considered fraudulent because I had no way to know I would get that job when I filed? It would be one thing if we filed next week knowing that I would start working next month, but as of right now I have no prospects. It seems strange that I would have to spend 6 months after discharge working part time or low-pay jobs just to keep us under the median income.

I just don't want to be pushed into a Chapter 13 if I take a job. As of right now, there is no way we could make payments (we make < $30k a year), but if I took full time work we would make around $60k. Unfortunately, full time work in my field is hard to come across right now for a new graduate; otherwise we wouldn't be in this mess.

This is so confusing! I'm really grateful for all the help.

Edited to add: The loan our attorney mentioned to us is a 722 redemption/replacement loan. They would give us a monthly payment maximum rather than a certain amount we can borrow, and the $1300 for the BK would be rolled into it. I still don't know that I'm thrilled with it, but then again, what part of BK is exciting? (Except maybe knowing the phone will stop ringing and we get a chance to start over.)

[BassBoy]

So can I assume, then, that if I interview for a job AFTER discharge and accept it, that wouldn't be considered fraudulent because I had no way to know I would get that job when I filed?

Yes.

[SinkingFast]

not so fast:

"and knowingly and fraudulently failed to report"

so you'd have to have won the lottery, and FAILED to report it. Which of course is impossible since you'd never ahead of time you'd win.

and it's after a "hearing"

Those acts are there primarily to guard against people committing fraud. Not like the trustee is going to elecontronically poll every bank in the country, on a weekly basis, to see if you have a checking accoutn and how much is in there.

The trustee can't even pull up your tax records and u have to do it for him.

They're not as computer high-tech as u think. Most of the bk process is based upon your honesty.

r

The one year, fraud thing is in a totally seperate part of the Code than the 180 days part. The link I posted is to the one year part.

If at some later date, the Trustee suspects that you committed Fraud either thru testimony or hiding assets or whatever, the Trustee can reopen your BK. Up to one year after the BK is discharged and closed.

If you win the Lottery within 180 days of filing, the Trustee can sieze those monies and distribute them to your Creditors. And that's a totally seperate part of the Code which I'll look up and post for you later..