Can I file?

[mommyto3]

I know the new laws are very difficult to get around, and I am still learning and figuring out the best way to go about this.I'm trying to figure out if I can file for chapter 7 and if there was anything I should be aware of that could happen in my situation.

DH and i are filing together. We are in TX, we are a family of 5. I WAH, and before taxes and any deductions, together on a good year we make abut $55K.

After taxes, and after they take out for child support for my stepdd,we bring in 2840/mo.

-I have 1 vehicle, I pay $440/mo (I know..ouch, and it's only a little trailblazer!) for it,DHh drives company truck.
-We own 1 home which is only about 7 months old, so there is very little equity if any at all in it:1150/month
-We have about $12K in store/cc debt,a mobile home that was defaulted but it has gone back to the company,and a vehicle that was also defaulted and gone back., so about 50K total.

I found this on another site that shows exemptions for my state:



When we got the house about 7 months ago, we did buy home furnishings, and whatnot, it went on the ccs and we did have every intention of paying it off (but got in over our heads of course or I wouldn't be here). from the paragraph above, it looks like ALL clothing and home furnishings would be exempt, correct?
I mean, we apparently are below the median income for a fam of 5 in TX, the means test allows us $1319/month for allowance.
So, 2840 after taxes and child support minus 1150 for the house minus 1319 for allowances minus 440 for my car.
That is -$69. Am I do my math correctly? I just can't believe that we could easily file chapter 7 while everyone else is finding it very difficult. I feel like there is something i am missing or we are just very poor! LOL Sheesh.Andn also, the exempt items are doubled since we are filing jointely,correct?

any help would be appreciated!!

[StaciMM]

You do come in below the income guidelines for a family of 5. How are your actual living expenses? The guidelines are maximum's, you go by real #'s if they are below. (You are also allowed a transportation expense, by the way, for gas/maintenanc/etc.)

Based on your #'s you're probably ok to file. Consulting w/ an attorney-a few actually-would be a good first step.

The new laws have more restrictions, but really shouldn't prevent an average income (or lower) family from filing. There will be more steps and paperwork, but nothing in what you've posted indicates any problems.

[mommyto3]

Thanks for responding!

Well, these are our actual expenses monthly:
House:1150 (which includes tax and insurance)
Car:440
Car Insurance:110
Water:60
Phone:55 (need for my job)
DSL:35 (need for my job)
Directv:60
Clothes for all 5 of us averages to:125/month
Groceries:500
Electric bill (highest in summer):average 200
Gas for vehicle:about $150/month
Diapers for 2:30

As you can see, we do come out in the negative, which is why we are stuck in the cc usage hole of no end. We are getting a lot more frugal which is not easy with 3 small kids. So,not counting the car and house, it equals out to about 1325. 1319 or 1325, they can take their pick. LOL. I will be contacting an attourney soon, and Dh's CASH Christmas bonus will come in handy to pay for it.

[mommyto3]

I also wanted to add that although DH and I have no health insurance, my children do have state insurance. I don't have to pay any premiums, but I do have to pay co-pays, not exceeding $565/yr. do they give me some allowance for that or willthey tell me to get real and ditch the Directv?

[StaciMM]

I had a link saved listing the allowances for each category, but it seems its no longer valid. (THey may be updating the #'s since a new year is about to role in.)

I would think you'll be ok w/ the #'s you've given. You are about $5,000-10,000 under the median income, so no issue there. From what I recall, the standard vehicle #'s are up to $475 payment for 1 vehicle (don't know how it would go if the payment was higher, I imagine it would at least raise some eyebrows) and $300ish for maintenance/gas/insurance. I'm sure you're fine w/ $500/mo on groceries, and the misc. cateogory is probably around $200/mo and would cover DirectTV & DSL.

Have you lived in TX for the past 2 years? If not, where did you live before that? (To determine what exemptions you use for filing.)

[mommyto3]

Oh yes, I have lived in Texas for many years. It's refreshing to have someone else look at my numbers and come out with the same as I do. I am currently checking out attorneys around here to see what they think also. thanks!

[bkfiler]

do you have:

a pet?
go to movies?
buy cleaning supplies?
use toilet paper? (hehe )
wash your hair?
need medications?
buy over the counter cold/flu/feminine medications?
have life insurance?
have health insurance?
owe back taxes?
have a large pacer bill due? (ok thats for me only )
etc...

adding these things up for all the actual expenses shows you how you got into trouble in the first place sometimes

[StaciMM]

TX has fairly generous exemptions-from what I saw, up to $30,000/$60,000 value for joint filers.

BKFiler-promise me you'll confess the real #'s when you get your Pacer bill-should be about this time next month.

[mommyto3]

a pet?
buy cleaning supplies?
use toilet paper? (hehe )
wash your hair?
buy over the counter cold/flu/feminine medications?
Yes, all of these things I counted with the groceries part. I spend $100/wk on just groceries, the rest goes toward these things.

have life insurance?No, but will be getting some within this next year.

have health insurance?unfortunately no, his company has none and it's WAY to expensive on our own.It's sad. The kids are covered under state ins, but the 2 of us are just praying really hard. I know, not the best of ideas.

owe back taxes?Nope,thank goodness

have a large pacer bill due? (ok thats for me only )
etc... No, but i am sure I will once i have to watch it carefully for my own case! LOL

go to movies?Nope, that's what the redbox is for. LOL

adding these things up for all the actual expenses shows you how you got into trouble in the first place sometimes [/QUOTE]

Our biggest problem was right after I had my 3rd baby in May 2005, I was transitioning from one sucky WAH job (that just plummeted to the ground in the matter of a coupleof weeks), to my current one. So, with a new baby (and a 2 year old and 4 year old) at home, it took a while to get done training for the job and get going. So we really depended on the CCs. I know...you have all been there done that.

Thanks so much for all of your help!

[Lightning]

So you WAH and spend $440 a month for a car? You must WAFH a lot as well. Talk to your employer (if you WAH for someone else) or re-evaluate your business plan (if you WAH for yourself). If you're not earning enough to cover your expenses or make a decent profit, WAH is not a good move.

[StaciMM]

This is an area where I'll debate you, Lightning! (For the record, I generally agree w/ the logic behind what you say-not this time.)

If someone w/ small children has an opportunity to work from home, and it means no day care bill, then its a situation that is hard to beat. Daycare for 2 in diapers is at least $275/week, and that's if you can find a place who will give you a multi-child discount. Rates are high, because state requirements limit the # of children that a person or center can care for. For the 3rd child, it would be another $60-100 weekly. (Could go higher, the low figure there is assuming after school care only.) That is roughly $1450/mo in expenses-counting minimums. Could easily be more.

Then there is the cost of working. Gas to & from work, meals, clothing/dry cleaning, etc. Even if you were only making $1000/mo working from home, someone w/ 3 young children would need to make an additional $2000 to break even. All to pay someone else to spend time w/ your kids.

This is an area I know well, by the way. My DH was a SAHD for a long time-working part time. (Based on field & experience, I earn more.) He made about $250 per week part time. With his education/experience, he would not have been able to get a $3000 job.

And by the way, $440 is not THAT extreme for a vehicle payment. The IRS guidelines allow $475 for 1 vehicle.

So you WAH and spend $440 a month for a car? You must WAFH a lot as well. Talk to your employer (if you WAH for someone else) or re-evaluate your business plan (if you WAH for yourself). If you're not earning enough to cover your expenses or make a decent profit, WAH is not a good move.

[Lightning]

Read my post again, Staci.

Spending $440 for a car, $55 for a phone, and $35 for a DSL line is irrelevant if you're making a profit. Why would someone say "ouch" after stating a $440 a month car payment if this great WAH job paid so much?

Whether you WAH or WAH, you have to come out ahead. Since the OP is filing BK, I can only assume they're not FR.

[StaciMM]

It still says the same thing...

So you WAH and spend $440 a month for a car? You must WAFH a lot as well. Talk to your employer (if you WAH for someone else) or re-evaluate your business plan (if you WAH for yourself). If you're not earning enough to cover your expenses or make a decent profit, WAH is not a good move.

What would you suggest? Cut out the phone & DSL, which are needed for work. Save $90/mo but lose more than that, I'm sure, w/ lost income potential as those were required for the WAH position. Get a job outside the home, pay daycare and extra expenses. Now, instead of being slightly short each month (~2/day in the negative as the budget stands-that can be handled by using coupons, keeping to a limited list of grocery items, etc.) you're $500-1000 short each month.

Great idea!

And no one said the WAH job paid anything excessive. In the real world, you can only cut out so much.

[Lightning]

Let's try this again, Staci.

EARN
MORE
THAN
YOU
SPEND

Get it?

[StaciMM]

In a perfect world-sure.

But the world isn't perfect. Its easy to have that for an ideal, but if you're going to give advice it has to be something realistic that can be accomplished. Can you go out tomorrow and come home with a job that pays $24,000-36,000 more per year than the one you have now?