707(b)?

[HMT]

I was looking through the Nolo book and now I'm freaked out. I am unemployed by choice as I wanted to go back to school.

I've been unemployed since fall of 2008

If you have zero income because you are a student will the case be dismissed under 707 (b) abuse?

[keepmine]

What exactly is causing you to freak out?
Nothing in the bk code requires you to have a job to file bk. You aren't the first person to go back to school to better themselves and end up in financial difficulty.

[HMT]

this is from Nolo:

"Your Filing Constitutes "Abuse"

The court can dismiss your case if it finds that your filing is abusive -- that is, that your actions demonstrate that you aren't entitled to the remedy offered by Chapter 7. As explained above, if you fail the means test, the court can presume that your bankruptcy filing is abusive and prevent you from using Chapter 7. However, even if you pass the means test, the court might find abuse. For example, if your actual income (as calculated in Schedule I of your bankruptcy paperwork) significantly exceeds your actual expenses (as calculated in Schedule J of your papers), the court might find that you should be limited to Chapter 13, even if you pass the means test.

Even if you clearly can't afford a Chapter 13 repayment plan, the court can still dismiss your Chapter 7 case if it finds, considering all of the circumstances, that your filing is abusive. Here are some examples:

* The court can refuse to grant a Chapter 7 discharge if the debtor fails to explain how he or she got so deeply in debt ( In re Tanglis, 344 B.R. 563 (N.D. Ill. 2006).)
* If the debtor fails to explain what happened to money received from a personal injury settlement or home refinancing, the court can refuse to grant a Chapter 7 discharge. (See In re Bozeman, Bankruptcy No. 99-35862, Adversary No. 013252 (M.D. Ala. 2006), in which the court found that saying "we did stuff" was not a sufficient explanation of where the money went.)
* Voluntary unemployment can be considered abusive, because the debtor could pay back some or all of the debts if employed. ( In re Richie, 353 B.R. 569 (E.D. Wash. 2006)).
* A debtor who couldn't account for how cash advances were spent during the previous year may be denied a Chapter 7 discharge on grounds of abuse. ( In re Yanni, Bankruptcy No. 0510393ElF, Adversary No. 05-428ElF (E.D. Penn. 2006).)"

So I guess the question is; is going back to school considered voluntary unemployment? If so, do I just go out and get a part time job for the next 6 months so the look back shows it, or would this be a non-issue since my look back is already more than six months, so how would they know I even left my job?

[keepmine]

It's impossible to determine what the facts of that case are without reading the entire ruling.
I'd not worry about it. Should {and unlikely} that the trustee asks about why you're in school-just don't say something like, I'm in school so that I have no income to pay debts.
Just say you decided to go back to school in order to get a better job in the future and you just couldn't handle both work and school.
They'll know you're not working because, you have to list your employer/occupation on the forms.

Have you spoken to any bk lawyers yet?

[HMT]

Just say you decided to go back to school in order to get a better job in the future and you just couldn't handle both work and school.

That is the truth which makes it easier to say too!

I haven't spoken with a lawyer since I really can't afford one just yet. That's why I was looking at the Nolo book, considering pro-se if I can get a good grasp on it. It would be a very simple Ch. 7.

I'm just exploring all options...

[HMT]

I think this is the case Nolo's book refers to (it's a PDF)

http://www.google.com/url?sa=t&source=web&cd=2&ved=0CBcQFjAB&url=http%3A%2F%2Fwww.wieb.uscourts.gov%2Findex.php%3Foption%3Dcom_docman%26task%3Ddoc_download%26gid%3D421&ei=ANsSTKS6C8P6lwemxrCjDQ&usg=AFQjCNHUHDn6nYqZotmbx13YZbFTUGHFIA&sig2=V0ggRr2VP-AIy7N3slovIw

Hope that worked.

[nc73]

I think this is the case Nolo's book refers to (it's a PDF)

http://www.google.com/url?sa=t&source=web&cd=2&ved=0CBcQFjAB&url=http%3A%2F%2Fwww.wieb.uscourts.gov%2Findex.php%3Foption%3Dcom_docman%26task%3Ddoc_download%26gid%3D421&ei=ANsSTKS6C8P6lwemxrCjDQ&usg=AFQjCNHUHDn6nYqZotmbx13YZbFTUGHFIA&sig2=V0ggRr2VP-AIy7N3slovIw

Hope that worked.

Just read that...Looks like you won't have much hope. Might be worth a try still..

[HMT]

That's what I was afraid of. Any way to circumvent this? Do I need to have full time employment for the 6 month look back and during the wait to be discharged? Is that what this case is saying? I could maybe do part time with school but full time would be stretching it.

Or are they saying that she's just graduated with advanced degrees and has good earning potential but is being too picky with her employment even though in her look back she had a 3 month period of earnings that, had she kept that job would have put her into a chapter 13 so the trustee looked at it as she knew she would go in a 13 and therefore she left the job and hasn't been actively looking.

Has anyone else been in this situation? What was your experience?

[keepmine]

That case did look familar.It was posted on here a few years back.
I'd just say read it very carefully and see if the facts in that case apply to you.
Are you just about to finish school? If so, have you diligently applied for work? Do you live with someone who is paying your living expenses while you look for a job in your field?
I'd not read a lot into this case. It has some very unique situations.
Starting with, she quit/got fired just as she graduated and was being very picky about possibly relocating. In fact, her lawyer even said he weighed the idea of filing a Chapter 13.

I'd just suggest that you take a good look at the totality of your situation.
Why are you even filing with no job? You have nothing anyone can take-no wages to garnish and likely have no health insurance. I wait until your finances are stable {if possible} You don't want to get sick and run up serious medical debt post bk and have already played the bk card.

Post more about your situation and we'll see if we can help.

[BobMango]

In that case the petitioner had a positive DMI of $790 a month. On top of that she had recently finished school and hadn't made what the court considered a good faith effort to repay their debt.

Your case will be viewed/decided based on the totality of the circumstances, as this case was. The debtors own testimony (combined with that big DMI) sank her, i.e. finishing degree but not finding work, not willing to consider work outside her field, iffy expenses, etc.

I'd say if you don't have a big positive number for your DMI and have not yet graduated from school and won't for some time, you should be ok. This is also a different economy and jobs are not as easy to come by as they were in 2006.

[HMT]

I'm just starting my second year in a 4 year program and I'm living with my mother. I have health insurance as it is a law in this state to have it. I'm getting sued next month, and there are still a ton of creditors calling. I'd also be going into a financial field when I graduate and don't want my credit score to make it impossible to get a job. I understand that even though the BK would be on the report the scores would of had some time to recover.

I would like to file soon and start fresh without the stresses of lawsuits and harassing creditors and their threats. Is it unreasonable to file while you are unemployed and in school? I treated going back to school as a business decision, and a year in treated going bankrupt with the same sort of business decision.

At this point the jobs that are out there are for executives, there really is nothing and when I find and apply for one the interviewer finds it strange and doesn't take me seriously because I would be taking a pay cut and taking a few steps down on the ladder. Another part of the problem is that every job you go out for has at least 50 other applicants.

[keepmine]

You file when the time is right for you.
If you feel you have a basic safety net in place then, file away.Just remember that once you file and are discharged it's 8 years between another chapter 7 filing. Not something you want to do again but, something to consider.

[JackBondLove]

This is also a different economy and jobs are not as easy to come by as they were in 2006.

This is key. I have a hunch that my trustee understood what a cr@p economy we're in, and didn't needle me on having a job.