Opinions all? BK 7 or 13?

[tkd]

Hi I am new here and have read so many posts that it seems to be getting more confusing than anything else.

Family of 5 living in Central Ohio.

Net Income of spouse 2334.00
Mine is from SS Disability 1739.00 (which I can lose at anytime)
More net from Child Support 160.00
Total Net : 4233.00

Expenses:
Rent: 500.00
Elec: 110.00
Nat. Gas: 80.00
Water & Sewer: 40.00
Phones-home: 35.00
Cells(mine&kids): 60.00
Husbands Cell (job requirement): 90.00
Direct Tv: 55.00
Internet: 30.00
Garbage Coll.: 27.00
Household Items non-food: 46.42 -- too low?
Tobacco: 200.00
Food: 700.00
Clothing: 375.00 (75 per person per month)
Laundry/Cleaning Supplies: 57.00
Medical/Dental Exp. 200.00 (I am a recovering AML cancer patient with regular doctor visits and prescriptions)
Transportation & upkeep 2 veh: 301.50
Recreation, Clubs, Ent., Newspapers: 237.20 (includes eating out 200.00 per month for family less than once a week, kids clubs through school, and newspapers)
PET care: 50.00
Personal Hygiene Items: 156.00
Kids Allowance: 96.00
Work Lunch Allowance (husband works anywhere from 40 - 55 per week): 160.00
Auto Ins. and Renter's Ins. combined: 110.00
Arrearage Payment on local taxes: 50.00
Kid's school fee, pictures, lunches, etc. 120.00
Gifts: 100.00
Church contributions: 200.00
Total Exp. - 4186
Total Extra - 47

We have approximately 50,000 in debt and the majority is medical bills, only about 5,000 in CC debt and everything is unsecured.

Have a lawyers appointment on Tuesday -

Thanks in advance,
tkd

[originalhealer]

Well, I don't know a great deal about family budgets, but the following categories seem kind of high to me: food, clothing, personal hygiene, eating out.

75 per person per month for clothing? Maybe this is what parents spend on children who are still growing, I don't know b/c I'm single with no children, but in the last year I have bought one pair of shoes and three T-shirts. 75.00 per month per person seems high.

You will probably get pushed into a Ch 13.

[hhou812hh]

HHM left a good post with links some of us added to answer the expense question. If your expenses are as close to the IRS allowed as possible and you have more then $100 in disposable income then you will be pushed into a ch13. Today it's pretty much the "honor system" of what you tell the court, but the new law will demand you live by the IRS tables.

Look for:
"Sticky: A comment about expense questions "

[hhou812hh]

Pardon me for asking but where are you paying $500 in rent? Grant it I'm in an expensive part of the country but my rent is $1450 and that's the average for here. Actually according to the IRS tables the average for my region is $1700. I haven't paid $500 since 1989 on a studio. Just seems low compared to what I'm used to.

[HHM]

75$ for clothing, per person, per month seems a tad high, how did you arrive at that number. But everything else seems in line. The thing about expenses, you need to be able to back it up if you had too.

Thus, you should probably go with a chapter 7, but that depends on the type of debts you have. If its just credit card and medical bills, you're better off attempting a chapter 7.

Good luck, I think it will work out for you.

[Whittio]

Are you allowed to use kids allowance as an expense? I would worry that the trustee wouldn't allow that, and would kick you over the $100 limit?

I don't know about exemptions and such, but I too have a family of 5, and just looking at your expenses with my family in mind, I would say you have ways of cutting back on your expenses. As mentioned before, clothing seems VERY high. I just bought my kids a huge bag of clothes, my 6 year old got 4 complete outfits (tops/bottoms) my middle daughter got 2 pair of shorts and my oldest daughter got one pair of capri's and one pair of pants, all that for $28. That was at Mervyn's and I hit the sales. I also bought 4 pairs of shoes for $99.86. Mine were the most expensive for $40, and I paid $26 for another pair, and $10 and $14 for the other two for Sketchers and L.A. Gears (no walmart shoes here). I haven't taken my kids shopping for clothes/shoes for at least 4 months (just prior to sending them to camp I bought about $50 worth of clothes).. sorry that got so long, my point is, at $75 a month, that's $450 in 6 months, and I just spent less then $150 in about that same amount of time?.. perhaps your husband has to have suits or something?

Also, cell phones for kids, is that a necessity these days? and an allowed expense? It really does boil down to a personal choice, but I see people complaining about not having enough money to live on, but yet their kids have cell phones! Your cost for your cell and your kids phones doesn't seem outrageous, but just wonder if that's a valid exemption or not?

Could the trustee look at these expenses and say things like, "OK, if you cut back on going out to eat and canceled your kids phones, and stopped buying so many clothes, then you could afford your debts".. I don't know if they do that or not?

I also think your rent is incredibly low! Especially given the fact you have a family of 5, I don't suppose you would be in a studio or 1 bedroom apartment. A home around here that would be sufficient for a family of 5 would run you at LEAST $1600.. (we thought about renting our house out to move to TN where cost of living is less).

Also, you're recovering from cancer, the medical bills you're going to include in BK, are these for your current Dr.'s? My mom just got a bill from her Dr. for $60 and I said, "hey, lets include it in the BK" but we felt since she is still a patient of this Dr., it's best to leave her account in good standing. :s

[Whittio]

HOLY SMOKES.. I just re-read your post, and you spend $75 per month PER PERSON. I read that as $75 per month! oh my, I DO think that's going to get questioned.

[tkd]

As far as the rent goes - we have had the same landlord for close to 10 years and it is in central Ohio in a town so small that we call it a village. Even at todays standards, they probably couldn't get more than another $100 per month if they rented to someone else. older home - 3 bedroom and 1 bathroom with a one car garage.

For the clothes - We just did school shopping the past few months and everything is outrageous. I just estimated the 75 per person per month. After taking a closer look, maybe 200 to 250 is a better estimate, but then that frees up extra income.

I know that I did not include any school supplies purchases on the list of expenses. that was close to 200 by itself for 3 kids.

Thanks for your observations!
tkd

[tkd]

Are you allowed to use kids allowance as an expense? I would worry that the trustee wouldn't allow that, and would kick you over the $100 limit?

I'm not sure either - but it is a valid expense. Three kids like to get some money and as I am disabled, I cannot do a lot of the household chores.

my point is, at $75 a month, that's $450 in 6 months, and I just spent less then $150 in about that same amount of time?.. perhaps your husband has to have suits or something?

No, he doesn't we could probably cut that back a bit. Although he does have work expenses for tools that he does not get reimbursed for until we file taxes.

Also, cell phones for kids, is that a necessity these days? and an allowed expense? It really does boil down to a personal choice, but I see people complaining about not having enough money to live on, but yet their kids have cell phones! Your cost for your cell and your kids phones doesn't seem outrageous, but just wonder if that's a valid exemption or not?

I have a 16 yr old daughter that has one that she only uses for emergencies as it is prepaid. She has a few friends that do not have home phones and I have no way of contacting her. As for mine, I am a cancer patient with an older car (1996), I drive this back and forth to my doctor visits that are over an hour away a few times a month. The engine blew on this car back in November and it was replaced by our church, so now we make sure whoever drives it has a cell phone.

Could the trustee look at these expenses and say things like, "OK, if you cut back on going out to eat and canceled your kids phones, and stopped buying so many clothes, then you could afford your debts".. I don't know if they do that or not?

Yeah, I am worried about that. I have one medical bill that is over 20,000 that I attempted to start making payment arrangements with 2 weeks ago and they have denied my payment arrangements and are looking at sueing us. That is the main reason for the Ch. 7.

I also think your rent is incredibly low! Especially given the fact you have a family of 5, I don't suppose you would be in a studio or 1 bedroom apartment. A home around here that would be sufficient for a family of 5 would run you at LEAST $1600.. (we thought about renting our house out to move to TN where cost of living is less). Answered this in other post.

Also, you're recovering from cancer, the medical bills you're going to include in BK, are these for your current Dr.'s? My mom just got a bill from her Dr. for $60 and I said, "hey, lets include it in the BK" but we felt since she is still a patient of this Dr., it's best to leave her account in good standing. :s

Only one is from current hospital and I just talked to them yesterday. I was told to go ahead and file and that it would not affect my care in anyway, that I would still be a welcome patient at this hospital. All the cancer doctors are current.

Thanks!

[Lightning]

$200 a month for tobacco? A "quit smoking" program would not only help your heath but your wallet. That's a huge expense. Don't be surprised if it's not allowed.

Clothing is also ridiculous, as others have pointed out. Even if your husband needs suits, have him visit Wal-Mart. Clark Howard shops there for his professional wardrobe. Kids don't need much in the way of new clothes. They outgrow them so fast. Shop garage sales and Goodwill.

Recreation, clubs, and entertainment won't fly either. When you're broke, you don't get the luxury of taking 5 people out to eat several times a month. The newspaper isn't a necessity either.

$160 a month for your husband's lunch on top of $700 a month for food? He spends $8 a day on lunch? Make a sandwich and pack some fruit.

I don't know what "school fees" are, but pictures are taken once a year, and that can't possibly cost that much. What are they eating for lunch that costs that much again on top of the huge grocery bill? You're spending $700 a month on food for breakfast and dinner. That's pretty high.

[accentone]

Look at the IRS collection standards. For your income, it show 171+ you're allowed for clothing.

Is tobacco even allowed as an expense?

Recreation--again, I have a family of five. One dinner out at a moderate restaurant is at least sixty bucks. We love going out to eat, but have had to cut that way back. Kids are feeling it. We're down to maybe once a month instead of once a week.

Good luck! And go to the irs/gov website to find your allowances.

[Whittio]

My advice to you is, look up the IRS exemptions as mentioned before. I am willing to bet that you exceed almost every category. You WILL be questioned on them. Just because you spent $250 in clothes this past month or two, doesn't mean you can claim that as an exemption every month! I have only spent about $250 - $300 in 6 months time for my family. (I forgot I had to buy clothes for my grandma's funeral a few weeks back, but found things for under $12 each!)

What you need to do is, call the hospital and ask for their accounting manager. Let them know that you can NOT afford these bills, and ask if they have any programs you qualify for. Due to your high income, you might not, but it's worth a shot. If your CC debt is only $5000, then you can work on that yourself, if you didn't have the medical bills.

I was sick for 3+ months this year. My Dr/hospital bills were extremely conservative (I waited till I was near death before I went to the DR. LITERALLY!) but my bills were over $3500 I couldn't afford that. I called the billing and asked if I could go on a payment plan. Most of the time, they'll put you on like $20 or $40 a month with 0 interest.

I was able to get an 88% reduction on my bill. I only paid 12% of the balance, and I get that 88% reduction for a full year. Now keep in mind, we only make $40k a year and have a family of 5, so we don't make as much as you do, but still, they should be able to reduce it maybe as much as 50-60%?? I would start there, as I really doubt you're going to qualify for a chapt 7 with your listed expenses.

[tkd]

My advice to you is, look up the IRS exemptions as mentioned before. I am willing to bet that you exceed almost every category. You WILL be questioned on them. Just because you spent $250 in clothes this past month or two, doesn't mean you can claim that as an exemption every month! I have only spent about $250 - $300 in 6 months time for my family. (I forgot I had to buy clothes for my grandma's funeral a few weeks back, but found things for under $12 each!)

What you need to do is, call the hospital and ask for their accounting manager. Let them know that you can NOT afford these bills, and ask if they have any programs you qualify for. Due to your high income, you might not, but it's worth a shot. If your CC debt is only $5000, then you can work on that yourself, if you didn't have the medical bills.

I was sick for 3+ months this year. My Dr/hospital bills were extremely conservative (I waited till I was near death before I went to the DR. LITERALLY!) but my bills were over $3500 I couldn't afford that. I called the billing and asked if I could go on a payment plan. Most of the time, they'll put you on like $20 or $40 a month with 0 interest.

I was able to get an 88% reduction on my bill. I only paid 12% of the balance, and I get that 88% reduction for a full year. Now keep in mind, we only make $40k a year and have a family of 5, so we don't make as much as you do, but still, they should be able to reduce it maybe as much as 50-60%?? I would start there, as I really doubt you're going to qualify for a chapt 7 with your listed expenses.

We had originally planned to start paying off all of our back debts as my husband has just become employed in the last 2 months. While I was in the process of arranging payments for this, I did talk to their accounting manager and I was told no reduction in debt and the minimum payment they will accept without suing me is $560. We would really prefer not to file.

Does anyone know if I send the original creditor a check and they actually cash it, (and I do this monthly), if they could still sue me? I am sure that the financial director of the hospital doesn't open every single payment.

Thanks for everyone's input!
tkd

[Whittio]

That's insane. Did they send your account to collections?? I would think they would work with you instead of getting NOTHING if you file BK!! idiots!

[rukiddingme]

rukiddingme

This has got to be my last entry in this forum for a while b/c I just go crazy here. The internet I can see, you are at least trying to do research and get information. The tobacco, allowances, eating out, clothes and direct tv..come on. Live within your means or change your means. I have cancer in my family too and it can be done. In my house of 4 there is no eating out except once a month. Husband and I take lunches to work. I plan meals in advance...there is a lot to sacrafice that you are not sacraficing. I walked away from a $70k year job b/c of my daughters cancer. We are struggling, really struggling but bk will not be an option unless I have cut everything out but food and shelter. You have not.