We have to file in Feb/March

[momto4]

Due to an unexpected baby, property taxes going up and other unexpected expenses, we took out a second mortgage. Some months later DH got a job in another state, we put the house on the market, while struggling with the payments. The market changed and our home was worth less then we owed between the first and second mortgage. The first mortgage lender agreed to a short sale but the second would take no less that the $17k that we owed. We even asked them to switch it to a personal loan to just release the lien on the house so that we could sell it, but they wouldn't. So we have since moved and since we couldn't afford rent and mortgage, we stopped paying both mortgages. We paid the second a few more months as they kept telling me they would consider releasing the house if we were current. Finally, I saw that was a lie so I stopped paying that one. The house was taken off the market and is now scheduled for foreclosure. Also, when we moved DH did not get paid for 6 weeks and I was on unemployment so our other bills got behind. After going to a lawyer about what to do with the house, we were advised that bankruptcy was the only way out.

We were advised to wait 6 months from July as that month we only had my last week's pay from my last job. So that put us in within the means test for Chapter 7.

Now I have started looking into our tax refund and think we will get a refund of about $4-5k since I see we can deduct moving expenses and we have 4 kids, 3 in daycare. Of course we can spend it on stuff but I would prefer to replenish savings and buy plane tickets for DDs who will be going back home to my mom's for a couple of weeks this summer.

I have a two part question: A: If I get my refund and then file bankruptcy does it matter what you have spent the money on and B. if I don't want to spend it can I exempt it since we have no equity in our house?

Also, I read that if we have moved to GA within the last two years we would use the exemptions from our previous residence (RI), does this mean I can use the Fed. exemptions if I choose since GA doesn't allow the Fed. but RI does?

Thanks

[SinkingFast]

Welcome to the Forum, Momto4!

We went thru a very similar experience. Hubby lost his job. Unemployed 7 months. New job outa state. We managed to pay rent and mortgage for 5 months before we had to give and call it quits.

Attnys told us, since Hubby came first, he was OK to file. We would have to wait until I'd been in the new State 6 months. I believe the Code says 180 days.

And, Yes, you will have to use your old State's Exemptions. Until or unless you moved 2 years prior to filing. If RI allows for Filers to choose State or Federal, then you can opt to go with the one that will work best for you.

Filing before or after the Foreclosure really makes little difference. You'll discharge the deficiency balance either way. If you wait too long to file after the Foreclosure, it might be possible for one or both of your mortgage Lenders to file a Judgement against you. Depends on RI State Law there. That would add an extra step post-BK to your clean up is all.

Forgot about your tax refund!

Spring and Fall, Trustees are extremely interested in income tax refunds.

Spring, many filers don't have the Exemption to cover the $$$'s of the Refund. Fall, Trustees get a prorated amount of next spring's refund. 9/12ths, 10/12ths, whatever. Depending on when you file.

If you do spend the refund prior to filing, be sure to spend the money on necessities. And save your receipts as proof of where the money went. Doctors, dentists, clothes, food, car repairs, that sort of thing. Necessary for the health and welfare of the Debtor and the Debtor's dependents. Your attny's fee and filing fee are generally acceptable as well.

[Grace]

I doubt the trustee will see plane tickets for your kids to visit grandma a necessary expense. Even if it's allowed, you should consider putting that money in a savings account instead. You will have financial emergencies that you'll need that money for. Why doesn't your mother come visit you? Then she can see the whole family, and it won't cost you anything.

[Spartan]

Check with your lawyer for details. But since you are not going to use homestead exemption, then under Federal exemption rules, the wildcard you can use to protect upto $10,000 in any asset, including cash.

IF that applies, then your tax refunds, plane tickets etc, will be covered using the wildcard exemption.

[momto4]

Check with your lawyer for details. But since you are not going to use homestead exemption, then under Federal exemption rules, the wildcard you can use to protect upto $10,000 in any asset, including cash.

IF that applies, then your tax refunds, plane tickets etc, will be covered using the wildcard exemption.

This is what I was hoping. I will verify with my lawyer.

[momto4]

I doubt the trustee will see plane tickets for your kids to visit grandma a necessary expense. Even if it's allowed, you should consider putting that money in a savings account instead. You will have financial emergencies that you'll need that money for. Why doesn't your mother come visit you? Then she can see the whole family, and it won't cost you anything.

You haven't met my mother, have you?!

Seriously, I was only planning to do it if I find a really cheap flight one way. They will be driven back.

[lrprn]

You haven't met my mother, have you?!

Thanks for the laugh, momto4! (Although I now have to find something to clean the spit drops off my laptop monitor! LOL!)

Seriously, I was only planning to do it if I find a really cheap flight one way. They will be driven back.

Bankruptcy isn't debtor's prison. There is some expectation that normal family activities will continue and some quality of life be maintained during bankruptcy 'within reason'. It's that "within reason" part that can be so hard to define sometimes. However, I believe one-way, lowest-cost plane tickets to visit Grandmother will be as acceptable as driving the kids both ways would be. Frankly with the price of gas expected to go up as the weather warms, the plane tickets could even be cheaper than driving! lol!

[SinkingFast]

We had a death in the family this summer. At the very same time, we had a car go in the shop for body repairs.

Even tho the insurance would reimburse the Rental car expenses, I fretted about the Rental Car agency, funeral flowers and other expenses showing up on our Bank Acct statements. Debit card here. Debit card there that week.

Our attny said I was being WAY too paranoid about the prefiling period. That the Court understands these types of things happen in every day life.

I wouldn't even use my Debit Card at a fast food place for fear of that showing on the Bank Statements. Attny said, the Court knows people eat out. And it's planned for in our Schedule J under the Entertainment expense category.

Check with your attny, of course. But I'd bet the Court understands a visit with Grandma for the kids over summer break.

It's not like you are sending them to some phoo-phoo east coast summer camp. Think the original "Dirty Dancing" movie.