Having trouble keeping our heads above water.

[rusty95]

I am not talking about your tax return. I am talking about the what counts as a dependent in a bankruptcy expense schedule and means test. If you claim 11 dependents as part of your expenses on your bankruptcy petition then in most districts, those 11 dependents need to be exemptions on your 1040 tax return to be counded as dependents for bankruptcy purposes, not withholding purposes.

You seem quite defensive. I have read your posts and I am not sure you are understanding that there are predetermined amounts allowed for most expense categories when filing for chapter 7.

In any case, it only takes around $150 or so a month in disposable income to push you into a chapter 13.

Nobody is going to claim 11 dependants because they don't exist.
Do you know why people claim more dependants? They do it to bring home more money weekly. You can only do it if you have enough deductions on your tax returns to cover them.
Who is claiming them as an expense. You don't understand the whole concept of doing that.

I have done alot of reading and did the means test. And I am not being defensive.

[backtoschool]

The dependents have nothing to do with anything. It is perfectly legal as long as you claim the right amount at the end of the year.

And if you read the previous posts the 1300 left over goes towards weekly expenses. You see you take the 1300 and divide it by 4 (weeks in a month), that comes out to 325 a week of which we buy gas and food and put money away for things like car insurance and water bill and what ever else comes up. I appreciate the help but please read all of my answers and posts. I went over all of this already.

So lets see my monthly bills are 7912 and we bring home 8800 that actually leaves 888.

I am not talking about your tax return. I am talking about the what counts as a dependent in a bankruptcy expense schedule and means test. If you claim 11 dependents as part of your expenses on your bankruptcy petition then in most districts, those 11 dependents need to be exemptions on your 1040 tax return to be counded as dependents for bankruptcy purposes, not withholding purposes.

You seem quite defensive. I have read your posts and I am not sure you are understanding that there are predetermined amounts allowed for most expense categories when filing for chapter 7.

In any case, it only takes around $150 or so a month in disposable income to push you into a chapter 13.

[mgmadara]

If it was me I would stop paying the mortgages, find a cheaper place to live and file just to get out from under those mortgage payments. Your house is the problem and until you realize that, you won't get much relief.

[rusty95]

With $8,800 a month in income, and a bunch of dependents that were not claimed on your income tax return, and $1,300 a month that can go into a Chapter 13 plan, you are going to have a difficult time being a candidate for chapter 7 in my opinion.

If your house payment is over the IRS allowed amount for your area, then that may be an issue with the trustee as well.

The dependents have nothing to do with anything. It is perfectly legal as long as you claim the right amount at the end of the year.

And if you read the previous posts the 1300 left over goes towards weekly expenses. You see you take the 1300 and divide it by 4 (weeks in a month), that comes out to 325 a week of which we buy gas and food and put money away for things like car insurance and water bill and what ever else comes up. I appreciate the help but please read all of my answers and posts. I went over all of this already.

So lets see my monthly bills are 7912 and we bring home 8800 that actually leaves 888.

[rusty95]

But your house is the problem. There are limits set forth that cannot be exceeded and a trustee has to abide by those. There is some wiggle room but here is the way I see it.

Chapter 13-You will keep the house and then have to afford the payments set forth by the trustee and these payment plans are normally for 60 months. You are then pretty much credit dead and still paying through the nose for your retention of address. There will be no credit cards in emergencies or holidays and you may eventually end up losing it all before you meet all the payments.

Chapter 7-You have to meet an income guideline to even qualify for this. Yes all debt will be discharged but if your home truly has 100K in equity, they may likely take it from you. There are caps on exemptions and my home has WAY less equity and value than yours and we take home a pile less a month now due to the economy and I still have to buy back my assets or they go to auction.

You better obtain the real value of your home and sit down with several attorneys and see what you best option is or you may get a rude awakening at your 341 hearing. Trust me its not pleasant. We were assured our home and vehicles would be safe and they are not.

I feel your pain with wanting to hold on to the home due to the school system. We are in the same boat and even after not paying our credit cards, the cost of living alone and our mortgage with a down size in income has made it hard. I have paid 19 years on my mortgage and have 9 left and I would like to see it through if I can.

If you read the previous posts you will have read I have 531000 in mortgages. Ithe house is valued at 575000 that dosen't leave 100000 in equity. And most mortgage companies do not finance a 100%

[Backlyn]

But your house is the problem. There are limits set forth that cannot be exceeded and a trustee has to abide by those. There is some wiggle room but here is the way I see it.

Chapter 13-You will keep the house and then have to afford the payments set forth by the trustee and these payment plans are normally for 60 months. You are then pretty much credit dead and still paying through the nose for your retention of address. There will be no credit cards in emergencies or holidays and you may eventually end up losing it all before you meet all the payments.

Chapter 7-You have to meet an income guideline to even qualify for this. Yes all debt will be discharged but if your home truly has 100K in equity, they may likely take it from you. There are caps on exemptions and my home has WAY less equity and value than yours and we take home a pile less a month now due to the economy and I still have to buy back my assets or they go to auction.

You better obtain the real value of your home and sit down with several attorneys and see what you best option is or you may get a rude awakening at your 341 hearing. Trust me its not pleasant. We were assured our home and vehicles would be safe and they are not.

I feel your pain with wanting to hold on to the home due to the school system. We are in the same boat and even after not paying our credit cards, the cost of living alone and our mortgage with a down size in income has made it hard. I have paid 19 years on my mortgage and have 9 left and I would like to see it through if I can.

[backtoschool]

With $8,800 a month in income, and a bunch of dependents that were not claimed on your income tax return, and $1,300 a month that can go into a Chapter 13 plan, you are going to have a difficult time being a candidate for chapter 7 in my opinion.

If your house payment is over the IRS allowed amount for your area, then that may be an issue with the trustee as well.

[Klesko]

Option A

Mortgage--- $4365
Second mortgage - $555
Car Lease---$399
Electricity---$285
Oil--------$250
Cable---- $140
cell--- $100
Life insurance --- $208
Train---- $75
Misc----$150
All charge cards---- $1385

Total $7,912
Income $8,800
============
Left over $1,112

Option B

Rent--- $3500
Car Lease---$399
Electricity---$285
Oil--------$250
Cable---- $140
cell--- $100
Life insurance --- $208
Train---- $75
Misc----$150
All charge cards---- $650

Total $5,757
Income $8,800
============
Left over $3,043

Ya, do I even need to explain this?

[rusty95]

Lets see I sell my house for 575,000. I have 525000 in mortgages, after paying the real estate broker a 5% fee for selling it, thats 28,000 that would leave me with 22000 to pay off half of what I owe on my cards. Now I still have 23000 in charge card debts and no house. I also don't have 100,000 in equity because most companies won't finance 100% of the value.To rent a house in my area is about 3500 a month, that dosen't solve the problem.The house isn't the problem.

The problem is my real estate tax went up $5000 since I bought the house, the fuel oil has tripled and so has the electric bill. The charge card rates going up to 29% also didn't help.

[Klesko]

My first mortgage is $4365 that includes the house insurance and real estate tax. I pay over 11,000 a year in taxes. I owe about 485,000 on the house. The second mortgage is 555 a month and I think I owe 46,000 on that. And I am taxed to death in the great state of New York.

Your house is the problem, the cards are only a small part. Before even considering BK you need to figure out the real value of your house. If you truly have 100k in equity then you will more then likely be pushed into a BK13. However even with your house payment you wont be able to afford a BK13 nor would I recommend it in your situation.

You need to sit down and realize that the house is your problem. Until then nothing will change.

[rusty95]

I want to know how you are claiming all those dependents on your paychecks if in fact they do not exist. I do not know what your house value is at but at my 341 hearing the trustee told this other couple that they could certainly downsize the house. I reside in PA and this couple had a home valued at $400K and he didn't think it was going to fly to be able to keep it. They asked me about my home first and I don't have a lavish house but it is my home. We easily qualified for chapter 7 with my husband being a carpenter and having really lousy years of late and we still are over in assets by $9K and have to go to court next week to buy back my SUV which I have my title to. I know how it is to be making good money but have massive debt that it has to go to but when the credit card debt is gone and you are paying a more realistic mortgage, you will have a lot left over as long as you both have your jobs. Just be sure to research every avenue before taking action. I should have tweaked a few things before filing but hindsight is 20/20.

You can claim all you want as long as you claim the correct amount at the end of the year. Why give the government a interest free loan.

[rusty95]

Rusty,

I will sound like a broken record to others who have heard this before, but when was the last time you got a market value report on your home from a reputable, licensed realtor? A $4,400 dollar PITI (half your take home pay) would suggest a whole lot of houseor a crazy mortgage or both, but if you don't know your home's current value, how do you know if it's worth all this pain to keep it?

You are focusing on your credit cards. (Believe me-after having lived on ours for a year and a half, in large part to chase a house payment, I totally identify with the sky-high interest rates. ) But you should also get realistic about what your home is actually worth. Don't know what part of the country you live in, but most have seen values plummet.

If, after finding out the real value of your home in today's market, you find out you have a bunch of equity, your problem could be solved by simply selling the house and renting/buying something cheaper. A great option that allows you to get our from under what's really killing your budget and into something that you can afford plus pay off/down your credit cards and possibly use the $ as a negotiating tool to lower your rates on any balances left.

If, however, you find out you have no equity or very little equity, you have another situation to deal with. Many, many people are finding out that instead of being an investment, their primary home has become a liability. They find out (as we did) that they are little more than renters with a very expensive mortgage and maintenance liabilities, as well. In our case, a home that we bought the traditional way (20% down, no funny stuff, a great fixed interest rate) has decreased in value nearly 50%-yes, half-since the height of our market in 2007, and 35% since we bought it 6 years ago. But our neighbors, who have been here for 10-20 years, all also have suffered the downturn and some of them are actually selling to get their equity.

Bottom line: BK is a very personal decision, but one you shouldn't make until you really know what your assets are.

Selling the house is out of the question. The school system where I live is one of the best in the state. My daughters education is very important to me. I paid more for the house because of it. I paid 489,000 for the house and it is probably worth about 575,000 to 600,000. At the peak houses similiar to mine where going for 700,000. If I didn't have the charge card bills I would have plenty of cash.

[Backlyn]

I want to know how you are claiming all those dependents on your paychecks if in fact they do not exist. I do not know what your house value is at but at my 341 hearing the trustee told this other couple that they could certainly downsize the house. I reside in PA and this couple had a home valued at $400K and he didn't think it was going to fly to be able to keep it. They asked me about my home first and I don't have a lavish house but it is my home. We easily qualified for chapter 7 with my husband being a carpenter and having really lousy years of late and we still are over in assets by $9K and have to go to court next week to buy back my SUV which I have my title to. I know how it is to be making good money but have massive debt that it has to go to but when the credit card debt is gone and you are paying a more realistic mortgage, you will have a lot left over as long as you both have your jobs. Just be sure to research every avenue before taking action. I should have tweaked a few things before filing but hindsight is 20/20.

[BrokeOR]

Rusty,

I will sound like a broken record to others who have heard this before, but when was the last time you got a market value report on your home from a reputable, licensed realtor? A $4,400 dollar PITI (half your take home pay) would suggest a whole lot of houseor a crazy mortgage or both, but if you don't know your home's current value, how do you know if it's worth all this pain to keep it?

You are focusing on your credit cards. (Believe me-after having lived on ours for a year and a half, in large part to chase a house payment, I totally identify with the sky-high interest rates. ) But you should also get realistic about what your home is actually worth. Don't know what part of the country you live in, but most have seen values plummet.

If, after finding out the real value of your home in today's market, you find out you have a bunch of equity, your problem could be solved by simply selling the house and renting/buying something cheaper. A great option that allows you to get our from under what's really killing your budget and into something that you can afford plus pay off/down your credit cards and possibly use the $ as a negotiating tool to lower your rates on any balances left.

If, however, you find out you have no equity or very little equity, you have another situation to deal with. Many, many people are finding out that instead of being an investment, their primary home has become a liability. They find out (as we did) that they are little more than renters with a very expensive mortgage and maintenance liabilities, as well. In our case, a home that we bought the traditional way (20% down, no funny stuff, a great fixed interest rate) has decreased in value nearly 50%-yes, half-since the height of our market in 2007, and 35% since we bought it 6 years ago. But our neighbors, who have been here for 10-20 years, all also have suffered the downturn and some of them are actually selling to get their equity.

Bottom line: BK is a very personal decision, but one you shouldn't make until you really know what your assets are.

[rusty95]

What state are you in? How much is owed on your house 1st and 2nd?

You are paying $4900 a month for mortgage which is 58% of your income, that is insane.

My first mortgage is $4365 that includes the house insurance and real estate tax. I pay over 11,000 a year in taxes. I owe about 485,000 on the house. The second mortgage is 555 a month and I think I owe 46,000 on that. And I am taxed to death in the great state of New York.