sorry to beat a dead horse but

[monkatom]

I did the means test just to make sure I can file a 7 before paying an attorney and using teh IRS amounts it shows I am (1043) in the hole a month. I think the IRS amounts were a little high in some areas so will the trustee object to this? I think if I do an I and J it will be a little more realistic? any help would be appreciated.
Thanks

[monkatom]

BTW we are in CA and discharging hopefully 121K in CC debt. I realize we should probably walk away from teh house as this eats up a alrge portion of our earnings but wife will not budge. Looking at actual costs I am probably about 200 short a month and could hopefully make that up with ot, etc?

[HHM]

Practical question #1

If you had a successful chapter 7 and discharged all your unsecured debt, could you reasonably pay your bills and at least put some money into savings every month.

If the answer is NO, you need evaluate your current living expenses and make adjustments.

As for the Means test, the numbers are the numbers, the means test only exists to see if your case is abusive (i.e. filing chapter 7 when you could conceivably payback some money to creditors). You need to now fill out Schedules I and J of the BK petition and determine what you actually spend in a given month.

[monkatom]

I think if we change our exemptions as we get an 11K tax return and change my wifes pay to 12 checks instead of 10 we can deinetely do it. By my calculations if after the BK we cut corners etc, we can probably bank about 100 a month and I should get a raise in July that will help a lot. I did some new calculations and if we file in Feb then that reduces our negative means test to 584 as my wife does not get checks in July or august.
Thanks

[kl030505]

I do not mean to be rude at all, I'm simply hoping you'll get a real fresh start...

My husband didn't want to budge on the house either, but it was yet another foolish $$ decision that was based mostly on pride and little else. Once I really projected out what we needed to spend to stay and how much we'd have left over vs. if we rented somewhere and what we had left, the difference was astonishing. He kept saying, "But, I'll get bonuses and a raise" etc etc. This was part of our problem to begin with - we counted on $$ that didn't exist yet, spent as though it already did and then low and behold it never materialized and even worse, he lost his job. I absolutely refuse to do that EVER again. We will budget based on a little LESS than we will actually make so that there is always a little cushion. I finally got through to him and we are surrendering the house. I feel SO much better about it - even though he still feels horrible. I figure, his pride can take a few hits, our financial future is precarious enough as is.

I'm telling you all this because if you have $121K of unsecured debt, you and your wife are used to spending outside of your means. It's going to be hard to cut back to the bare minimum - especially if one or both of you are holding on to thinking that "there will be a refund" or "I'll get a raise". $100/month to save is not a lot at all for a family of four. You should have a goal of approximately 6 months worth of expenses saved up for an emergency fund - for us, that is around $30K. If you are only saving $100/month, then it would take you the rest of your working lives to save up for an emergency fund. Forget about extra purchases, education for your kids, etc. Now, not everyone has the luxury of a 6 month e-fund, we can't all help our kids with college etc, but an income of over $100K for a family of four is more than enough to make you comfortable and give you an opportunity to save a decent amount as long as you live below your means. It's hard to make that lifestyle and mindset adjustment - believe me - I understand that, but if BK is going to be a true fresh start for you, you have to get there now, otherwise I fear you'll be right back here in 7 years.

I'm no expert trust me. I have a ton of consumer debt, we made some very foolish decisions and we only recently are both working to the point where we are making a reasonable income, and we've been living in a budget for a few months now and I'm finally confident we will have a great fresh start after we are discharged because I know the budget I devised is realistic and workable for us. It sounds to me like the post bk budget you are setting up is going to be a struggle every month - that's not the kind of fresh start you want. I think you need to talk with your wife and both think long and hard about your future and whether or not keeping the house is really worth it. If it is, I'm sure you can find a way to make it work by giving up a lot of other things, but you may find it's not worth it.

Best of luck.

[325Falcon]

Great post Kl !!

I believe how well we handle our post BK finances will determine how we feel about our decision to file BK. If I can make it for another 20 years with little to no BAD debt I should be able to stop working at 65 instead of working till I am 120 years old!!

Living without credit has been an eye opener and a great feeling.

[ameliabedilia]

I agree- wonderful post!
Monkatom, does your wife visit the boards at all? Maybe she needs to hear it from others. I know my husband can sometimes be significantly more receptive if it's coming from someone besides his wife or mother .
A far as your house. I cannot stress enough what a gift it could be to get out of a house that is too expensive, and depending on your area maybe not even worth what you paid. Housing prices will probably be the same in two years that they are today.
Let me tell you about my living situation right now- My husbands new job offers corporate housing for the first year, for free, or a very nice apartment for $500 a month. The apartment is a huge spacious place with lots of room. The corporate housing is a two bedroom extended stay hotel suite. It has two small bedrooms, a very tiny kitchen, no yard or balcony, and it is probably about 500 square feet. We chose to live here for the year free of charge. We are squished, but we got rid of TONS of stuff to make it work. My kids have always lived in homes with yards, in neighborhoods with kids and bikes. They are not thrilled (they are 8 and 4). BUT, I already have a college fund set up for each of them, we now have $3000 in savings in two months, it has been wonderful knowing that this sacrifice is worth it for them for the long term. I know for a fact that I am now better off financially then many of our friends with the big houses. I do believe when they are not completely saddled with debt when they finish college and also now when they see me being so much less stressed out because I don't worry every month that they will appreciate that their parents finally made a sound financial decision, even if it meant giving things up.

Also, may I propose a sticky about tax refunds? Too many of us here are getting way too much back each month. Some of us might not have gotten ourselves in so much trouble if we had enough each month instead of loaning it to the feds for free.


Definitely change your exemptions!