quitting for bk?

[hurtininaz]

I was laid off from my career job in February and took a much lower paying job that I hated and quit in June. I didn't quit to file bankruptcy - My husband was told he was be given a contract that was yanked the week before the start date. I quit thinking that I would be available to help him with the work. There are all kinds of valid reasons to quit - amazingly, I was approved for unemployment insurance today! I haven't had my 341 yet but I don't anticipate having problems.

[socal1105]

In this economy, I personally would be very scared of quitting a job in order to qualify for a BK--especially in California. I have been unemployed except for a very small PT job for almost two years. I was passed over for a FT job due to age. In this area of Florida there are very few prospects.

Why can't you use the extra money you have and pay down your debts instead of trying to BK? Just my opinion.

Hello AngelinaCat... I'm sorry for the confusion, but I will not be quitting for the sake of the BK. I was anticipating quitting my job for other personal reasons by January/February 2010. However, due to my circumstances now, I am now considering quitting just a few months earlier. So it's not a risk I'm taking just so I can file BK.

As for the judgment, it was a civil judgment that I absolutely do not owe. My brother owed money to the judgment owner and since my brother moved out of the country 3 years ago, he came after me even though I had absolutely nothing to do with it, only because he knew I was the responsible one in the family with a good job. And since I had absolutely nothing to do with this debt and he had absolutely no case against me, and so he got a judgment the only way he could... by NOT serving me and getting a default judgment awarded. He then waited exactly 360 days from the time he was awarded the default judgment before he finally levied my bank account and that's when I first learned about the judgment. Unfortunately, here in CA, it's practically impossible to overturn a default judgment after 6 months. He knew all the loopholes and waited almost a year to make any attempts at collecting money so I wouldn't know about it. Now I'm stuck with a $27k judgment that I will be more than happy to file BK to discharge. I know it's hard to believe, but here's my first post a month ago with a more detail explanation as to what happened http://www.bkforum.com/showthread.php?t=42783 .

I hope that explains my situation... its tough to have to file BK for no fault of my own, but only because of somebody else's greed... wish me luck.

[747LUVR]

My wife quit a few months after we met with our law firm, but we were ready and in a position to. Plus after the baby arrives, we get another exemption. woo hoo. But in all reality, it doesnt matter especially in this economy, where jobs are being lost left and right....

[socal1105]

They will average the income. Since there is such a huge discrepancy between my former income and my unemployment insurance income, I wanted to be unemployed for a full six months. It also depends on the amount of debt you have. If you are a formally high income filer that has over $100k of unsecured debt you want to discharge (like me) the more red flags there are, the more there is a chance the US trustee will get involved. I thought it prudent to be unemployed for six months before filing. Also, I had to wait six months anyway to get residency in the state I moved to in January.

In your case, since the debt load is so low, the UST won't be getting involved. Waiting 3 months will probably be fine in your situation.

Good to hear... thank you for your input

[backtoschool]

so if I file in December, wouldn't they just take the 6 month "average" income? So if I quit today and lets say my monthly income is $10k (I wish), wouldn't they just take ($10k x 3 months employed) + ($0 x 3 months unemployed) = $5,000 average income? Or are you saying they take whatever income you had during the past 6 months, so they're going to qualify me based on $10k instead of $5k? I hope that makes sense...

They will average the income. Since there is such a huge discrepancy between my former income and my unemployment insurance income, I wanted to be unemployed for a full six months. It also depends on the amount of debt you have. If you are a formally high income filer that has over $100k of unsecured debt you want to discharge (like me) the more red flags there are, the more there is a chance the US trustee will get involved. I thought it prudent to be unemployed for six months before filing. Also, I had to wait six months anyway to get residency in the state I moved to in January.

In your case, since the debt load is so low, the UST won't be getting involved. Waiting 3 months will probably be fine in your situation.

[socal1105]

You have to play the game by the rules. 6 months back.

If you file in July, they take the income from January to June. Doesn't matter if you quit, got laid off, or whatever the case may be.

so if I file in December, wouldn't they just take the 6 month "average" income? So if I quit today and lets say my monthly income is $10k (I wish), wouldn't they just take ($10k x 3 months employed) + ($0 x 3 months unemployed) = $5,000 average income? Or are you saying they take whatever income you had during the past 6 months, so they're going to qualify me based on $10k instead of $5k? I hope that makes sense...

[backtoschool]

I've never heard of anyone asked for an explanation of "hardship" or about employment as part of their bk. YMMV.

Me either, but since the lookback period is six months, I personally felt it was safer to be unemployed for at least six months.

[debtmonster]

Why can't you use the extra money you have and pay down your debts instead of trying to BK? Just my opinion.

That's like beating a dead horse.

That only works if you have a small amount of debt. If you owe over $50-60k, you're better off filing. In my case, I discharged $315,000.

[AngelinaCat]

In this economy, I personally would be very scared of quitting a job in order to qualify for a BK--especially in California. I have been unemployed except for a very small PT job for almost two years. I was passed over for a FT job due to age. In this area of Florida there are very few prospects.

Why can't you use the extra money you have and pay down your debts instead of trying to BK? Just my opinion.

[debtmonster]

There is NOTHING on the petition relating to employment, whatsoever. What are you talking about?

Exactly. If you want to quit and have no income to live on, that's totally up to you.

You have to play the game by the rules. 6 months back.

If you file in July, they take the income from January to June. Doesn't matter if you quit, got laid off, or whatever the case may be. There's no law saying you're not allowed to file BK.

People quit their jobs for all kinds of reasons, not necessarily to qualify for a Chapter 7.

I quit my job because I had a huge fight with H.R. I couldn't stand it, so I bailed. Plus the fact that I was driving 93 miles one way to work each and every day. That's almost 1,000 miles per week on my car. I couldn't find any similar paying jobs closer to me since I lived way out in the sticks.

The UST didn't ask me any personal questions. When you're a no-asset case, it's super easy. If you want to keep expensive things, then it can get complicated.

When I filed, I basically told them all to come and get it!

Remember, you can always buy it again. It's not the end of the world. Don't sweat it. I have never stressed one bit over this entire ordeal. The only stress I had was fighting with my wife for not having money to pay bills or food.

Learn to budget your money. Check on www.mint.com.
If you own a Mac, look for this software called Money Well to help you manage a budget.

[bkmaggster]

If your petition "shows" that you were "fired" when in actuality you quit - that's called a LIE. If you LIE on your petition, you are attempting to defraud your creditors.

There is NOTHING on the petition relating to employment, whatsoever. What are you talking about?

[bkmaggster]

I got laid off in January and decided to go back to school instead of looking for a full time job. That gave me six months to get my formerly high income down. But I think it is easier to explain "hardship" if you have more than a couple of months unemployed. Just my opinion....

I've never heard of anyone asked for an explanation of "hardship" or about employment as part of their bk. YMMV.

[kornellred]

If your petition "shows" that you were "fired" when in actuality you quit - that's called a LIE. If you LIE on your petition, you are attempting to defraud your creditors. Not too much good came come of that. I have no idea whether there is any question relating to reasons why you do not have a job in the bankruptcy paperwork - there probably is not - and it's no ones business but your own in the first place.

The best advice is to refrain from filing until the 6 month look-back period is exceeded. Then, you have reality on your side when you file. No income = no disposable income. It's as simple as that. If, at that time, anyone is curious as to why you are no longer employed at your current job, you can tell them that the envronment was not conducive to your well-being.

[bkmaggster]

that's exactly what I was thinking... so the Trustee didn't question why you quit? I assume the Trustee wouldn't like people quitting just to get a BK

Trustee didn't say a word about it. There's really no way they could prove it, and I don't think there is anything in the BK code saying you have to be employed.

I wasn't working a "real" job anymore at that point anyway, just a part-time retail job to help with bills. It was way more stress than it was worth.

[socal1105]

I got laid off in January and decided to go back to school instead of looking for a full time job. That gave me six months to get my formerly high income down. But I think it is easier to explain "hardship" if you have more than a couple of months unemployed. Just my opinion....

I thought 3 months of unemployment would suffice, but maybe waiting 4 or 5 months would be better... thanks for your suggestion