Are We Eligible for Ch 7?

[bumblefuss]

I'd love to get some feedback on this, if anyone has any.

Ok, first, I have consulted with an attorney and that attorney's recommendation was to file ch 7. This was in mid Dec., and my income, and living expenses have increased (new job, got an apartment)

Basics:
1. Wife and I are filing together.
2. We have no children.
3. We are both employed (more on that later).
4. We have to keep both vehicles in order to keep our jobs. My wife owns hers (more on that later), I owe 15,000 on mine.
5. No real assets to speak of, unless you count dishes, a few dvds, a camera, a computer, and a tv. Nothing extravagent (expensive jewelry, land, anything actually valuable).
6. There are no judgements or liens against either of us (knock on wood).
7. Not behind on my car payment, student loans are in forbearance until April 06.

Income
*Past 6 month Avg - 1,083/month (14,079/yr)
*Income going forward - 3,512/month (42,144/yr) - doesn't increase to this until 02/06
*Median for our area - 47,321

Expenses
Actual
Rent - 510
Car - 342
Car Insurance - 170/month
Food - 250/month
Entertainment - 45/month (est.)
Cell Phone - 70/month
Home Phone - 30/month
Cable - 65/month (est.)
Internet - 40/month
Gas - 140/month
Student Loans - 115/month
Electric - 100/month (est.)
Water - 30/month (est.)
(I feel like I'm forgetting something. . .)

Bankruptcy Allowable Living Expenses
(from http://www.usdoj.gov/ust/eo/bapcpa/2..._charts_TX.htm and http://www.usdoj.gov/ust/eo/bapcpa/2..._standards.htm)

*762/month (mortgage and non-mortgage)
*615-770/month (food, housekeeping supplies, Apparel & services, Personal care products & services, Miscellaneous) - low figure based on past 6 month avg income, high figure based on future income

Any insight would be greatly appreciated. Oh, and if I missed anything important, I'll be happy to add a new post to include it.

[BassBoy]

Expenses
Actual
Rent - 510
Car - 342
Car Insurance - 170/month
Food - 250/month
Entertainment - 45/month (est.)
Cell Phone - 70/month
Home Phone - 30/month
Cable - 65/month (est.)
Internet - 40/month
Gas - 140/month
Student Loans - 115/month
Electric - 100/month (est.)
Water - 30/month (est.)
(I feel like I'm forgetting something. . .)

Hmmm, life insurance, renters insurance, sewer bill (you pay water though?), trash pick-up, household cleaning supplies (i.e. dish soap, laundry supplies, bathroom and kitchen cleaners and ect.)

[lrprn]

Bankruptcy Allowable Living Expenses
(from http://www.usdoj.gov/ust/eo/bapcpa/2..._charts_TX.htm and http://www.usdoj.gov/ust/eo/bapcpa/2..._standards.htm)

Saw the TX in your allowable living expenses link - are you filing in Texas?

If you are filing in Texas, given that your last six months of income is considerably below the median income for Texas for a 2-person family ($47,321), filing now rather than after your income begins to rise makes sense. Make 3-4 free consultation appointments with bankruptcy lawyers in your area - they will be the most familiar with what will work best in your bk district.

And you've left a fair amount off your living expenses list - check the categories on this online expense calculator - http://www.ca-bankruptcy-attorneys.c...alculator.html . Also go back through your checking account and credit card statements for the last year to pick up things that aren't paid by the month - property and car taxes, homeowner's association fees, professional fees, etc. Estimate values of your household goods at garage sale/eBay prices.

Keep posting questions as you continue through the process - we'll help you sort things out if we can. Keep in mind that an experienced bankruptcy lawyer is always the best source of reliable information for your particular situation. Hope this helps!

[SinkingFast]

Personally, I'd bump up your Entertainment expense. Generally speaking, our Court here does not question $100/mo. Our paralegal said eating dinner out one evening at a nice restaurant falls into Entertainment. So maybe you wanna think back over the last couple of months and recall what all you've done.

Don't forget about dry cleaning. You have a computer,......... What about paper, ink cartridges, paper clips, staples, anti virus and firewall software annual subscriptions.

Call your utilities and ask them to run over your actual useage. If you weren't there for a whole year, ask about the previous tenants' useage. We got our gas bill set up on budget based on what the previous tenants used. Electric wouldn't do it, but they did give me the figures from the previous year so we could figure an average. I knew roughly how much water we use every month, on average. I called our water and sewer companies so I could get really close on the rates charges.

As you spend money now, save receipts. Stash them in your wallet or purse. Collect them up together at home. Go thru the receipts once a week or so and divide out the monies spent on food, cleaning products, toiletries, personal care, and such.

Don't cheat yourself on your budget. You don't win a prize when filing Ch 7.

[BKTango]

Above posters are correct you are missing an awful lot in your expenses, where's things like personal hygiene care, clothing, stamps, bank checks....include what you spend (in reasonable amounts) on everything. Your income would be looked at for the past 6 months, so the lawyer is correct if you were to file right now.

[bumblefuss]

We are filing in Texas.

The link to the online expense calculator is definitely appreciated. I just lumped a lot of the "smaller" things (toothpaste, detergent, etc.) into the grocery category. I'll have a much better idea when I go to the store tonight and start writing down actual prices.

Something like antivirus subscription would never have even occurred to me, so many thanks for that note. I'll be going back over what I've spent over the last year or so to find similar expenses I may have missed.

Proerty taxes won't apply, since I'll be living in an apt and the area I'm in doesn't charge such taxes on vehicles.

To me, it looks like the biggest unknown is utilities. We've been staying with family for the last few months until we could get our own place.

I could use what we paid during the prior year (electric along averaged 200/month), but we'll be in a smaller place, different climate, and fewer people in the house messing with the thermostat, so it may be an overestimate.

Overestimating anything worries me a lot, but from what I've read on the forums, whatever we come up with may be tweaked by the attorney anyway.

Couple of side notes - I mentioend the washer and dryer. . .We haven't bought them yet, but we'll definitely need them. I wonder if that's acceptable, or if it's too extravagant an expense?

The income tax return will be decent, but it's all planned to go for the filing and the washer and dryer.

Oh, and our credit card and other dischargeable debt (medical, prior rent from last apartment, etc.) is around 40,000 or so.