Needing to file a 7

[Needing Help]

Question... how do I file a 7, rather than a 13? Basically, I have very little to my name, wife has left... want to relocate so I can be closer to her & my little girl. The problem... I currently make almost $200,000.

Can I quit? If so, how long would I have to wait to file? Would there be objections?

I cannot bear the thought of a 5 year plan, living that far away, and that broke.

Please help. For my survival, I need this whole thing over with as soon as possible. (Failed business... all assets attached to the SBA loan)

[JRScott]

Well moving to want to be near your daughter is a good idea. However it will not be a fast process. You'd need to wait until your income on a 6 month lookback was below the states minumums. So you are looking at at least 6 months, keep in mind if you are moving between states you'd have to use your current states exemptions for up to two years.

It is also important to get another job after the move, so that you have paystubs for the last 6 months before filing.

[keepmine]

Think long and hard before you give up a $200K job-unless you can get a similar job in the new local. Remember, you have a daughter to support. You can do far more for her on $200K than if you're making a lot less than that.

[Needing Help]

Is there ANY law that would NOT allow me to file a chapter 7 if I gave up my highly paid career... relocated to another state to be closer to family... made WAY less than I do now... and waited the 6 months to file?

ANY red flags at all I should be looking for?

[lrprn]

There has been one case I'm aware of where an individual didn't work while finishing up her graduate degree, then filed Ch 7 at the end to wipe out her $100K unsecured (not student loans) debt. The US trustee objected and the case ended up in bankruptcy court where the court judge ruled that she was going to make a good income with the new masters degree and so should not be able to wipe out all of her debt without paying anything. See http://www.wieb.uscourts.gov/index.p...wnload&gid=421 for the specific details

I'm not saying that this will happen in your case. You could very well slide through and no one but you will ever be the wiser. But do understand that if your trustee asks during your 341 meeting, "Why did you file bankruptcy?", you better be able to prove that you were truly in debt over your head and had no other means of paying the debt off. The trustee isn't going to accept that "I filed because I found a way to game the system" as an acceptable reason for filing Ch 7

[keepmine]

No specific law says you must continue in a particular career.
The only possible way wou;d be "the totality of the circumstances". If asked, don't blurt out you quit a high paying job in order to qualify for a Chapter 7. You need a sob story about moving to stay close to your child and the current job was all you could find-so forth and so on.
I'd wait longer than 6 months to file-shoot for as close to a year as you can.

[tallberry]

Another thing to think about is the trustee will want your tax returns for the last 2 years minimum...so they will know what you have made in years past. Be prepared to explain why your income fell so dramatically, as I'm sure it will come up at some point.

[Needing Help]

Ya... I figure I will have to explain, but the explanation is the truth. I am not willing to stay where I am, despite the fact that I have a huge income. I would much rather work in a smaller place, with a smaller salary, and be closer to my wife and daughter to try and work things out, while trying to work past this mess of a life.

I just want to feel fairly sure that after leaving my job, that a chapter 7 would be fine, and not declined simply because I left a $200,000 salary. That would be a disaster.

Does anyone have experience in this?

[keepmine]

Frankly, you are not going to find many people who willingly gave up a $200K job.
Time to step back a little. You say you have few assets-how much debt are you seeking to discharge?

[Needing Help]

Unfortunately, it is a TON of debt. We had a business that failed.. that was the start of the demise of my marriage. Total debt is about $350,000.... most of which is a large business loan.

Being in my mid 30s, I am re-evaluating my life. Yes, my income is big, but you know what, it's nothing without my wife and child. She (my wife) will not come back to this state.

Hell... I would go back to bartending if it meant this whole stage of my life is over, and I can have my family back.

[danaf]

After reading your responses to other posters - I say go for it! Just make sure you get a job where you're going and if you are going to file a 7, make sure it's under the median for 1 since your wife & child aren't in your household. And hopefully that will change.

It will take some time for the creditors to catch up with you. Just make sure you are mindful about this aspect and maybe let your family and friends know about what you are doing so they don't inadvertantly give out information they shouldn't.

Can't fault a man for loving his family and willing to give up a 200k job for wanting to salvage it. My heart goes out to you and I totally respect the decision given your debt situation. If you had, say 50k debt, my response would have been to stay where you are, pay the debt, and get a good lawyer to get you great visitation rights. But that's not your situation.

Just please study the posts on this board as they will help you in the bk process.

[keepmine]

Yeah, $350K is nothing to play with.
BTW, since the majority of your debt is business, you are exempt from means testing.

[Needing Help]

Hi Keepmine... Thanks for the note. That is actually the 2nd time I've heard that today. Can you, or anyone out there, explain this a little more. Are you saying that it's possible to file a chapter 7, even with a $200K income, if most of the debt is business debt? How much (%) would need to be business related? How do they determine that?

[keepmine]

The code just says the majority of the debt can't be consumer debt.
It's not a slamdunk. You really need to see a few experienced bk lawyers. If you show a huge disposable income, the totality of the circumstances could well put you in a Chapter 13.

[TX Bluebonnet]

Hi Keepmine... Thanks for the note. That is actually the 2nd time I've heard that today. Can you, or anyone out there, explain this a little more. Are you saying that it's possible to file a chapter 7, even with a $200K income, if most of the debt is business debt? How much (%) would need to be business related? How do they determine that?

I only just recently heard about non-consumer debt myself and am now wondering if that applies to my situation. I've consulted with 3 attorney's and not one of them ever said anything about non-consumer debt. The only reason I can imagine as to why none of them did was because I consulted with attorneys that maybe only practiced consumer debt? But even so, shouldn't they at least know about it and guide me accordingly?!? In any case, after much searching, I found some info in the "Chapter 7 Handbooks & Reference Materials" for trustees. This handbook can be found on the US Dept of Justice website (www.usdoj.gov). Go to http://www.usdoj.gov/ust/eo/private_...er07/index.htm and click on the blue "Handbook, July 2002" link (near the top next to the January 11, 2005 date) to view the handbook online, or click on the PDF or WPD links in the adjacent columns to download the handbook. Once you're viewing either the online or downloaded version, search for "non-consumer" by using the browser's or program's find feature.

Actually, there's quite a bit of good bankruptcy information on the usdoj website and in that chapter 7 trustee manual.