New to the board with a lot of questions.

[TITUS00]

I have been lurking for a short while and have discovered that this site is very helpful in in allowing me to understand many of the issues associated with Chapter 7 bankruptcy. Here is my story.

I live in New Jersey. I am recently unemployed and collecting unemployment. I have 26K in my checking account. I owe 48K in CC debt. My house which is jointly owned with both and my wife's and my name on the deed, but only my name on the mortgage was appraised at about 300K by a real estate agent. I owe $269K including a first and second mortgage. I have a car that is worth about 21K and I owe about 26K. My mortgage payment is $2425, car payment is $595. I have a few questions.

I pay all of the household bills from my personal checking account which is in my name. My wife gives me $1600 a month towards paying these bills. Will this $1600 a month be considered income as far as a means test is concerned?

Will my wife's bank account statements need to be presented in a Chapter 7 case if she is not filing?

If I am filing a Chapter 7 by myself do I only get the standard Federal Exemptions for real property which is $20500 or since my wife's name is on the deed can I double the federal exemption?

Factoring in the cost of a trustee actually selling my house, with a $20500 exemption would I be able to keep the house?

I am in the process of starting a business and hopefully if things work out I will not need to file a Chapter 7, however if things do not go as planned I will continue making the minimum payments on my credit cards until my funds run out. Is this a good plan? When should I consider filing? How much cash should I have left in my checking account when I file?

At what point should I stop making payments on the car?

At what point should i stop making credit card payments?

What other issues should I be thinking about?

[backtoschool]

Your wife's payments to you will be considered for your means test. Whether they want to see your wife's bank statements will be a matter of how much debt you have and whether you are over the median income, etc.. (ie, whether the us trustee gets interested in your case)

If your wife is not also filing for bankruptcy you cannot double the federal exemption.

You have 9800 or so of general exemptions you can take in addition to the homestead exemption, plus a 925 wild card, but you have to include all of your other possessions in that amount. The cash in your account right now is unexempt and at risk. With $48,000 of debt and $26,000 in cash, the trustee would throw you into a chap 13.

You could put that money into a Roth ira which would make it exempt, but then you would want to wait at least six months to file.

Right now your equity in your house is too much to cover by exemptions too, even if you put the cash in an ira. I really think that you are a strong case for a chapter 13 right now given the numbers, even though you are unemployed, because of the equity in your house and the cash.

Your car is underwater, so you can either reaffirm the underwater payment, or turn it in in a bankruptcy, it is not going to count against your exemptions.

[JRScott]

How long can you live on the money in the bank?

Being unemployed is a scary time in anyone's life. You can never tell when that next unexpected thing might appear. My advice don't file yet. Use the money you have in the bank to live off of while you look for a new job.

I'd stop using the credit cards immediately, I might continue to pay for 3 months if you can afford to but then I'd stop paying on them.

In figuring equity in the home. You would take the value of the mortgage from the value of the property. Assuming a positive number you'd divide that by the number of owners on the deed. So really you'd only have to exempt 1/2 of the total equity as your wife owns the other half. At the same time consider a current up to date appraisal with the market as it has been your home may not be worth what you think.

Yes what she puts into the household is considered in the means test.

You'd want to have the least possible left, probably less than a couple hundred dollars.

[2manybills]

Bankruptcy planning is most important in this situation. You'll want to check out the exemptions for New Jersey to see how much of your money in the bank will be exempt. Also, you won't want to transfer funds around or show large payments to any one to move money around.

I agree to stop paying your bills, and use your money to pay the mortgage, etc. You might start meeting with some reputable BK's attorneys for a free consultation and becoming familiar with the local courts and rules in your area.

Welcome and good luck to you.

[backtoschool]

I am assuming that you are using the federal exemptions, since New Jersey's exemptions are so bad.

It would be better to spend the money in the bank gradually on expenses than to put it into an ira, although putting it into an ira will protect it. Putting it into an ira will also raise a red flag to the trustee, and even though the money is exempt, the trustee will start looking around to see if you are transferring or hiding any other assets, etc...

If you look at my past posts and my history, I was in a very similar situation to you about 7-8 months ago. I was in nyc and unemployed, with assets and a formerly high income. I decided to wait and spend my money on living expenses, and file chapter 7. (I also moved to another state).

You will definitely want to meet with a lawyer and figure out the best way to spend that money and plan for your bankruptcy. Filing right away would leave some of your assets unprotected so you are probably looking at several months out at least (I would say six months).

[TITUS00]

I agree that filing now is not a good idea. I do not want to file a CH 13. Last month I took out about 14K in 0% interest cash advances to help tide myself over until my business becomes profitable or I get a new job. I believe in the worst case scenario I can stay afloat for at least 6 months, probably more. I do not think I should stop paying any CC's right now.

I see how the $1600 I receive from my wife will be considered income and that amount plus unemployment insurance will go against all the household bills on my means test.

My car I am not sure about what I will do. I can make payments now, but if I file a CH 7 I might have to give it up.

I think the best thing for me to do is sit tight for 6 months and then re-evaluate.

How does that sound?

[jadams]

$14,000 in Cash Advances is a concern if you file BK.

Put as much time between the advances and the filing as you can. The older they are, the less likely someone will object and cause a problem.

[ForumReader]

I agree that filing now is not a good idea. I do not want to file a CH 13. Last month I took out about 14K in 0% interest cash advances to help tide myself over until my business becomes profitable or I get a new job. I believe in the worst case scenario I can stay afloat for at least 6 months, probably more. I do not think I should stop paying any CC's right now.

I see how the $1600 I receive from my wife will be considered income and that amount plus unemployment insurance will go against all the household bills on my means test.

My car I am not sure about what I will do. I can make payments now, but if I file a CH 7 I might have to give it up.

I think the best thing for me to do is sit tight for 6 months and then re-evaluate.

How does that sound?

Even though I am still a newbie to this forum and after reading your thread, I have to agree to the earlier poster that you should not file right now and like you said, to re-evaluate 6 months from now. That sounds like a wise move.

[TITUS00]

I am hoping that I never have to file. If I do file it will most probably be at least 6 months down the road maybe more.

[NewLifeAhead]

I agree that filing now is not a good idea. I do not want to file a CH 13. Last month I took out about 14K in 0% interest cash advances to help tide myself over until my business becomes profitable or I get a new job. I believe in the worst case scenario I can stay afloat for at least 6 months, probably more. I do not think I should stop paying any CC's right now.

I see how the $1600 I receive from my wife will be considered income and that amount plus unemployment insurance will go against all the household bills on my means test.

My car I am not sure about what I will do. I can make payments now, but if I file a CH 7 I might have to give it up.

I think the best thing for me to do is sit tight for 6 months and then re-evaluate.

How does that sound?

Hi TITUS00... Welcome to the forum. With taking those advances this past month, you will have to hold off filing in any case. Taking 14k in cash advances and then filing bk a month later will not be good. Even though you had no intention of filing then, it would 'appear' like you intentionally took it and then filed.

Good luck with your decisions and circumstances. Please update us done the road on how you make out.

[backtoschool]

I agree that filing now is not a good idea. I do not want to file a CH 13. Last month I took out about 14K in 0% interest cash advances to help tide myself over until my business becomes profitable or I get a new job. I believe in the worst case scenario I can stay afloat for at least 6 months, probably more. I do not think I should stop paying any CC's right now.

I see how the $1600 I receive from my wife will be considered income and that amount plus unemployment insurance will go against all the household bills on my means test.

My car I am not sure about what I will do. I can make payments now, but if I file a CH 7 I might have to give it up.

I think the best thing for me to do is sit tight for 6 months and then re-evaluate.

How does that sound?

I think waiting six months and spending those advances and some of your cash on living expenses is the way to go. (I say this from personal experience as stated above...)

Keep the car while you can afford it, as it is a legitimate expense that you can spend some of your cash on.

Spend some of the advances on any medical needs like new eyeglasses, dental work, etc. in the next six months if you need anything.

Also, any legal fees for setting up your new business could be a good way to use some of the money.

NYC and New Jersey are NOT cheap places to live, so that money really will get used up in six months of regular living.

Oh, and welcome to the forum! There are many who are going through what you are. I know I am one such person.

[TITUS00]

I definitely do not plan on filing a CH 7 in the near future. If I had I would have not taken those advances. I believe JRScott is correct in his evaluation of figuring equity in my house.
JRScott, did you come to that conclusion based on my residence being in New Jersey? I do not know if I mentioned this but if I do file it will be solo. I want to leave my wife out of it.

[TITUS00]

I thank everyone for giving me a cordial welcome to the board and for your responses.

[JRScott]

I definitely do not plan on filing a CH 7 in the near future. If I had I would have not taken those advances. I believe JRScott is correct in his evaluation of figuring equity in my house.
JRScott, did you come to that conclusion based on my residence being in New Jersey? I do not know if I mentioned this but if I do file it will be solo. I want to leave my wife out of it.

Equity is pretty standard among all the states, it is how you'd figure it in any state.

However your PM mentioned tenancy by entirety. If NJ has that go and make sure your deed is recorded as such and then pretty much equity becomes meaningless as the trustee can't take it if only you file and not your wife.

On the other matter with a 14k cash advance don't plan on a bk for at least a year, I mean you can reevaluate in 6 months and see if you need to but don't file at least until a year has passed from getting those and if possible make minimum payments on them for at least 3 months after getting them.

[TITUS00]

Is waiting a full year after the cash advances I took the general BK Forum consensus? If so, is it to too late to pay back the advances?