Do I make too much money to file CH.7?

[michele71]

Ok i will try to make this short and sweet. Right now i am in about 136k to CC with house we are looking total 353k. I decided to file for Ch. 7. The reason is that after i pay all bills i only have 800/mo left and i have to buy groceries, gas, elec, garbage, cable, car insurance, diapers with this..no money for entertainment, nothing I am barely making it I got in way over my head after my car needed repairs I am starting to fall behind and am using CC to pay utilities and stuff...only making min pays.

I am a disabled vet and hubby works we make 6700/mo our CC/car note=5933.My money is exempt from BK right?

I mean when the trustee sees what is in our acct since we stopped paying bills my money is exempted right??
I am scared they will make us go Ch 13--unless they just base their decision under my hubbys income and exclude my income because it is exempt. I dont have to claim it on taxes so our returns show an income of 50k/yr.

If you can help that would be great...also how do they find out what your home is worth??

[JRScott]

Okay first off you have not prioritized your money properly. Credit Cards should be payed last out of any money left over, not first.

When paying bills You should pay:

Food
Mortgage/Rent
Gas (for car)
Utilities (elec, heating oil, water sewer, phone, garbage etc)
Car Payment
Car Insurance
Car Maintenance
Health Insurance
Life Insurance
Back Taxes
Student Loans
The very last thing after all secured creditors and living expenses should be the credit cards.

Disability income is generally protected, I think you include it but back it out later.

How much money would you have left over after paying in the order above and before paying on credit cards?

[DaisyMae]

Your credit card payments are not deducted as expenses

on the means test or Schedule J.

[michele71]

schedule J

Looks like if I paid in that order i would be looking at about 1800 NEGATIVE/mo.

If they make you do Ch 13 do they just take away your credit card payments and see what is left without paying them and then take a percentage of what is left after paying necessities and then pay the creditors??

I got in trouble the last 18 months I had a baby and then the debt got worse then I got more credit cards and played the pass the money around game but now i am dependent on them to get by I cant do it anymore I am chasing my tail and at this rate they will never get paid off...

[JRScott]

Lot of folks get that way. That's how most of us end up here.

Is the 1800 negative before or after the credit cards?

If its after the credit cards, how much before you pay them do you have left?

[michele71]

1800 neg after CC pays. without CC payments i would have about 2500 left monthly.

[mmenz22779]

that sounds like a chapter 13 due to your 2500 monthly left.

you can still make over the amount on the means test but qualify for a chapter 7, it comes down to expenses.

so if you dont include the cc then you have positive 2500..

that right there disqualifies you for a chapter 7 and would put you in a chapter 13 paying 2500 a month for 60 months or 150,000 over the course of 5 years.

If you are forced in a chapter 13 you can count deductions to your 401k and your 401k loans payments that would help you out some. as for qualifing for a chapter 7 you need to find a way to get that 2500 to a negitive. Ignore the credit cards, but you also have to do it in a way not to raise any flags.

can you get your income down, or pay for child care, taxes ect..

you can do a online means test at legalconsumer.com they are a real good site and is easy to use. Lots of people on this board recommend that site.

if you are not going to keep your house a chapter 13 may be ok, but if you are only doing a 13 to get rid of your credit card debt (presently you dont qualify for a 13 as you have way too much income left) then you are kinda stuck.

want to get drastic and get into a 7 then you need to bring your income down and your expenses up. (not credit card but living expenses)

My gut tells me you need to take the means test. They have deductions already there and you use those deductions if they are higher than your real ones. If your real ones are higher then you use those.


after you do the means test then post on here what it says.
Chances are high you do qualify for a 7 as your most likely not including all your expenses.

if you have 2 cars that are paid off that is a 1000 exemption right there.

BK has changed and the means test is the only to tell what you qualify for.

[JRScott]

Okay as the previous person said if you have 2500 left before paying credit cards then most likely you are a Ch 13 not a Ch 7. However go over all your expenses and make sure you haven't left anything out.

Clothing
Property Taxes
Car Tag
Driver's License
Food
Phone
Haircuts
Laundry
etc

[michele71]

yeah the best i can do is get it down to 825 left over a month. Looks like ch13--geez. So my va disability pay counts to pay back debts when it comes to income....dont think i can do much else. looks like the best thing to do is probably just try to catch up on the bills i let go this month and not even worry about it. i dont want my husbands pay garnished i dont want them to know about our financial issues. do you know if i went ch 13 if they would garnish my va pay instead of his paycheck or is that not possible because of the laws against garnishing this type of pay?

i have a few credit accounts just in my name i suppose i could just not pay them since i am judgement proof. i could take my name off joint acct and just have my va pay put directly into a separate acct.

i am out of options.

any other ideas?? garnishment is not an option for hubbys check.

[AngelinaCatHub]

Michele; you have been given the best advice on earth, not legalized by an paper on the wall. Yes, stop those CC payments as well as use of them. Try for 7 if you can in any way. That is the best for a new start.

The important thing, is you must make a decission and then when committed to it, you shall sleep better at night. We post back to you as WE ALL have been where you are now or even worse. Things will get better. 'Hub