A lot of questions before I take the next step...

[way2startliving]

I am 85% sure I'm going to file BK.... I am a SAHM but am taking on-line courses which will take me a year to finish... DH brings home $55K now and it may go to $65K by the end of the year. We live in Brooklyn, NY and I am planning on filing solo. We just moved and I needed to charge a new couch (the old one was my SIL we all lived together and she got married, we moved out... I charged $1100 for it from JCPenny's so I know I will now need to wait like 90 days before filing.... But figuring my budget, I will have to stop paying my CC payments around the first of Sept... all funds will be exhausted by then and either there has to be more income or no payments. Day care for 2 under 3 is to expensive and doesn't justify (IMHO) to work and leave my children with someone I don't know and for me filing BK is a better option. Here is some info on our situation...

CC Debt ~ $24K unsecured in my name alone
Unsecured Loan ~ $10K in both of our names ~ However we expect to be given $7K from people we have lent money to which will be paid back over 1 year period and my mom will borrow us $3K (she just received back pay from disability) so that will be paid off.

I have a 2001 Honda Accord ~ In my name only

No house and no other assets.

I am looking to file Chapter 7 on the 24K and for DH to continue to keep his credit good for a car or house or anything we may need going forward. NOT Credit Cards, but credit for the big purchases in life... KWIM?

Here is my questions:

1) We have a joint Checking and Savings Account (his check is direct deposited) with Chase Bank... I also have a CC with them in my name alone.. now once I stop making payments are they able to go into the checking account and take the payment or close/freeze the funds in the account? Should I switch bank accounts or remove my name from the account? We have never written a bad check or went into the negative...

2) My DH will receive about $4K in profit sharing which we will receive at the end of Dec and plan on paying back my mom what she will lend us and paying for a lawyer to file at that time. How will the $4 look at the time of BK... How will they know we received it, do they look at the BANK STATEMENTS??? If so for how many months? I know my DH's income is included, but I'm not sure how it effects me as for my debt. Like can the trustees not agree with how he spends his money and I have to pay back all my debt?

3) Also, if I file in Dec, we will then get our taxes at the end of Jan first of Feb 09... what will we need or be able to do with the money of the tax return?

4) How many years of taxes do you have to show them? Do they ever question your itemized deductions? My DH was working from home on the side and purchased some equipment and things, we have our taxes filed by a friend who owns a tax office... so I didn't think or know at the time that I should have kept the receipts, will that cause a problem?

5) Will I still be able to keep my car? The value is about $6K right now... If not, would I be able to sale it and get a van in DH name and if so does it matter how close to BK I do this... I know it is not legal to put the car in family members name, ect so I don't want to have problems, but we are seriously thinking of selling the car and getting an used van so still no monthly payment?

6) Lastly, with the loan in both of our names... I can contact the bank and ask to remove my name or I can leave it in both names... does it matter which I do? Also, if I leave my name I am worried about showing preference between the creditors... at that point would it matter since DH name is on it and he is not filing BK?

Okay, I think that is all for now.. Thanks in advance for any advise and help on this. I have gained so much knowledge by reading this forum, but afraid all this knowledge may not be good b/c now I'm obsessed over if I'm going be dismissed or not..

Thanks,
Amanda

[deafbroke]

I am 85% sure I'm going to file BK.... I am a SAHM but am taking on-line courses which will take me a year to finish... DH brings home $55K now and it may go to $65K by the end of the year. We live in Brooklyn, NY and I am planning on filing solo. We just moved and I needed to charge a new couch (the old one was my SIL we all lived together and she got married, we moved out... I charged $1100 for it from JCPenny's so I know I will now need to wait like 90 days before filing.... But figuring my budget, I will have to stop paying my CC payments around the first of Sept... all funds will be exhausted by then and either there has to be more income or no payments. Day care for 2 under 3 is to expensive and doesn't justify (IMHO) to work and leave my children with someone I don't know and for me filing BK is a better option. Here is some info on our situation...

CC Debt ~ $24K unsecured in my name alone
Unsecured Loan ~ $10K in both of our names ~ However we expect to be given $7K from people we have lent money to which will be paid back over 1 year period and my mom will borrow us $3K (she just received back pay from disability) so that will be paid off.

I have a 2001 Honda Accord ~ In my name only

No house and no other assets.

I am looking to file Chapter 7 on the 24K and for DH to continue to keep his credit good for a car or house or anything we may need going forward. NOT Credit Cards, but credit for the big purchases in life... KWIM?

Here is my questions:

1) We have a joint Checking and Savings Account (his check is direct deposited) with Chase Bank... I also have a CC with them in my name alone.. now once I stop making payments are they able to go into the checking account and take the payment or close/freeze the funds in the account? Should I switch bank accounts or remove my name from the account? We have never written a bad check or went into the negative...
No. The CC is seperate from checking account. They can close CC. They will need to go to court to access checking account for funds. I would still move it to make it harder for them.
2) My DH will receive about $4K in profit sharing which we will receive at the end of Dec and plan on paying back my mom what she will lend us and paying for a lawyer to file at that time. How will the $4 look at the time of BK... How will they know we received it, do they look at the BANK STATEMENTS??? If so for how many months? I know my DH's income is included, but I'm not sure how it effects me as for my debt. Like can the trustees not agree with how he spends his money and I have to pay back all my debt?

The trustee will view any payment to parents as preferential payments and will take make them surrender the money ot be distributed to creditors. UNLESS your attorney can exempt the 4K bonus. I would just list the CC's and unsecured loans and not borrow any from parents. No questions that way.
3) Also, if I file in Dec, we will then get our taxes at the end of Jan first of Feb 09... what will we need or be able to do with the money of the tax return?
Depends. If you have room to exempt the returns you're fine. If not the trustee will take them and distribute them to creditors.
4) How many years of taxes do you have to show them? Do they ever question your itemized deductions? My DH was working from home on the side and purchased some equipment and things, we have our taxes filed by a friend who owns a tax office... so I didn't think or know at the time that I should have kept the receipts, will that cause a problem? I needed last years filing. If the US Trustee gets involved, he may ask for filings further back.

5) Will I still be able to keep my car? The value is about $6K right now... If not, would I be able to sale it and get a van in DH name and if so does it matter how close to BK I do this... I know it is not legal to put the car in family members name, ect so I don't want to have problems, but we are seriously thinking of selling the car and getting an used van so still no monthly payment?
How much so you owe on Honda? If the difference between what you owe and what it is worth is above the exemption limit the trustee can take it from you and sell it. If you sell it to get another care, make sure you get one that you still owe about what it is worth or more. If there is no equity in the car the trustee will not take it. Buying a ar and putting it in family members name will definately raise a red flag. Don't do it. The sale of the honda will be easy for trustee to find and question. Don't hide it.
6) Lastly, with the loan in both of our names... I can contact the bank and ask to remove my name or I can leave it in both names... does it matter which I do? Also, if I leave my name I am worried about showing preference between the creditors... at that point would it matter since DH name is on it and he is not filing BK?
You probably won't be able to remove either name on the loan.


Okay, I think that is all for now.. Thanks in advance for any advise and help on this. I have gained so much knowledge by reading this forum, but afraid all this knowledge may not be good b/c now I'm obsessed over if I'm going be dismissed or not..

Thanks,
Amanda

DB

[Help!]

I agree w/ deafbroke, with a few added bits of advice:

1) Banks can be sneaky. They continued to take out automatic payments from our checking account even though we de-authorized them. Move your money just in case.

2) Keep in mind the $4K bonus will be counted as income on the means test. You sound like you're close to the median, so you may want to time your filing so the bonus occurs after your 341 hearing (you could be asked for pay stubs in between - we were).

3) Keep in mind the tax return $ will also be counted as income on the means test, regardless of how you spend it. Again, timing your filing will be important.

4) Two years of tax returns in our case. UST was involved (if you can file below the median income you can likely avoid this).

5) If you sell the car and own it outright, the proceeds from the sale will also count against you as income on the means test. Better in my opinion to exempt it if you can and not have the added complication of changes with vehicles.

6) Very difficult to remove someone from a joint account when there's a balance. Also, if you are in a community property state, the discharge of a debt that's only in your name could still leave creditors pursuing your husband. Filing for BK separately to try to protect spouse's credit is complicated - not something I would even consider without a very good lawyer.

[AngelinaCat]

Hi Amanda:

First of all, RELAX and try not to stress too much. Some of these questions, I don't know the answer to, but others will chime in. A lot will depend on if NY is a community property state or not. I don't know at this point. All I can tell you what was asked of us:

1. I have read here that if you have your checking/savings account AND a CC from the same banking institution, that that institution can and probably will cross-collateralize the accounts. That is, they can go in your checking/savings account and take the money owed on the CC. Lajazz947 had that happen. So it would be to your advantage to totally move your checking /savings account to another bank or CU.

2. Our attorney asked us for the previous six months of banks statements and pay stubs, or pay advices. As she dragged our case one, she kept asking for these all over again. We ended up giving her about a year and a half worth of stuff before we filed.

3. We had to submit the last three years of our tax returns--keep in mind we filed jointly. We also had to provide a copy of 2007 tax return once it was completed. We filed on Dec. 28, 2007. If we had not filed then, we would have had to wait about 8 months into Aug. 2008 to file, as we get a stipend from a trust in January of each year. We would have to wait that out.
On any tax refund or stimulus, your lawyer can advise. We owe tax, so a refund is just a dream for us, and the Stimulus check was applied to the amount we owe for the 2007 taxes. But I did hear the Trustee caution the folks ahead of us at the 341 not to spend their Stimulus Check w/o notifying him.

4. Pretty much answered in #3.

5. Keeping or selling the car I can't advise on at this time.

6. The loan is something to talk to an attorney about. Get appointments with at least three for initial consultations. Most give free consultations.

And try to relax. If you have not purchased the Ch7 book from nolopress.com, now would be a good time to do so. You can get an online or print version from them for about half what it costs at a retail bookstore.

Good luck.

[way2startliving]

Thanks so much... for NYC it is a non community property state... so it seems I'm good to go...

Thanks again.