large tax return..kind of long

[whatamess]

WE were planning to file next month. My husbands income dropped from $3,000 month to $1,600 a month in the last two months. We are struggling bad! Our tax return we got back in the begining of Feb was $5,300. We have $2,500 left. My Dh's pay is not able to cover our bills now. We use the tax money to buy clothes for the kids, pay our car insurance, buy food, and pay life insurance policies. Would we be safe to file in April? I really dont want to file this month as it will eat up all the money we have left. We are WAY below the means test...about $35,000 or more. At the current rate my husband is working we will be $55,000 below by years end!
Am I safe? Should I go ahead and use that $2,500 to retain a lawyer? I *could* still pay the bills this month but after that.....impossible. My husband was told yesterday his hour will be cut again. I told him not to bother looking for a new job until we had this mess taken care of...
WAM

[jal1129]

I would suggest going in and having a free consult with an attorney before you spend anymore of that. If you have wildcard exemption in your state you may be able to exempt part of it. But it seems to vary by district/trustee. Some states have wildcard, some states you can exempt EIC etc. To be honest that is a very large return and I would think if you are filing soon the trustee is going to want part, if not all of it. Go talk with an attorney for free about the situation and see what they have to say.

We were able to keep our return but we were able to exempt it with the wildcard and it was also under $2000.

[reallynervous]

I am sorry you have exerienced such a drop in income. I know how quickly that can do you in.

If you know you are going to file and things are so tough for you right now, I would stop paying anything that you will be including in the bankruptcy - any unsecured debt. Are you still paying on those? Try to keep your rent/mortgage payments, utilities, etc current.

The attorney we will be using told us it would be okay to spend our tax return as long as it was for necessary things. We are getting about $4700 back and will use it to pay our attorney fees, property taxes that are overdue, & new tires for our cars as we are using a spare right now on both of them. He said these things would be fine to spend it on. It is important that you keep receipts to show everything you spent the money on.

That is just what we were told. I am no expert, so hopefully some of those with more experience will chime in for you.

Have you met with any attorneys yet for free consults? If not, that would be a good thing for you to start doing. Go to a couple and see what they say.

Good luck to you! Hang in there.
reallynervous

[whatamess]

Thanks so far...

So far Ive used the money to pay insurance premiums, groceries, clothes for my kids who will need them again soon as they are growing like weeds, a few items for school, and so forth. Thats why I have so little money left...I set aside that $2500 for a lawyer. I have not gone for the free consults yet...I have receipts, thats not a issue. Ive use the money to live as we have had only enough to barely cover the cc bills. I see no point in paying them now, am I right? I think it would be months before they would try to garnish wages. I hope anyhow.
Im worried about the averages of income from the last six months though, as that does NOT represent our current income at all.
Im having a bad month indeed....computer blew last week so I am using my mothers now. Fun Fun.
wam

[SinkingFast]

Really and Jal both gave you accurate responses,............... Depending on the Court in your area.

Some Courts don't take the EIC portion of the refund. Some Courts, you'll have to cover whatever you can with an Exemption. Some Courts, it's OK to spend the refund as long as you paid for necessities and you can document that.

It's really gonna depend on your Trustees and what they typically do about Income Tax Refunds in your area. The only way to know that is to talk to some attnys. Schedule at least 3, maybe 4 free Consults. See what attnys in your area have to say.

Also, if you're paying Unsecureds that you intend to Discharge,.......... If you haven't charged anything recently, maybe think about quitting paying them. Stretch your $$$'s that you do have further. Put some extra time between getting your refund and filing. Trustees are most interested in Refunds during Spring and Fall months. If you can hold off until summer to file, your refund probably won't be an issue then.

[whatamess]

Okay....my last chargeon one card was in october. One had a balance transfer last July. I opened up a card, transfered a balance at 0% and have never used that card otherwise. Its been more than a year for the rest. I do remember last time i was a few days late on BOA they called me five times a day, even on the weekends and late at night. That was only for two weeks late. I am in NJ BTW. I know there is no way in the world I can wait more than another two months at most. I wonder if the money from the return Ive used is GONE, how do they expect to get it back? Sell a kidney?
I wonder how long it would be before BOA & Chase would turn to legal matters? I just feel I am throwing money we need down the toilet. My husband still needs dental work, my kids need spring clothes and all thier pants are to small, my dog is overdue at the vet one year.....let alone the fact we eat pasta, rice and produce and cheap food now. I did splurge and buy some chickens on special!
Anyone in NJ have a clue about the courts in this overly expensive state???

WAM

[jal1129]

I do know what your going thru. My DH was in an accident and has not been able to work and has had zero income for almost 6 months now. Not to mention not being able to drive and me having to take off of work everyday to take him to physical & occupational therapy, drs etc. Plus gas for all this and some of his drs are 2 hours away.

I had BOA and Chase and had'nt paid either in 6 months and never was sued. If you call a lawyer for an appointment today you could probably get it by the end of the week and get your questions answered.

[whatamess]

Thanks...I am going to start looking in the phone book today. I guess only a lawyer could help at this point. I am very nervous about the return.
I was in an accident two years ago, had to do one year of therapy for back injury thats is still haunting me. I still have crushing headaches and pinched nerves. I still have unpaid medical bills from that my insurance refused to pay. It must be awful for you with your husband. Good luck with everything, its sounds like you have had a really rough time.

I guess I'm okay to stop paying BOA & chase. The other card I have is a Discover card. Ive paid them for this month. I want to be sure to keep up my car loan, we only have one car now. Its our lifeline. Weve quit all afterschool activites, moved into my mothers home, have one car, and feel weve already slimmed down our life enough. Its time to get out of this mess and back on to living!
WAM