Desperate - Quit Job to Plan Bankruptcy?

[whatcolor]

Has anyone here deliberately quit their job knowing full well it probably force you into bankruptcy? My situation is that I am completely stressed on my job and really feel as if I mentally can't do it anymore. I have not had any luck finding a new job that pays the same salary. I may be able to find a less stressful job paying considerably less and perhaps file a chapter 13 or just quit all together and try to meet the chapter 7 means with my spouses income. The stress of having $96k in debt including a $16k car loan is also mounting. I can only make the minimums and think that I am really robbing Peter to pay Paul just to keep up. No savings to speak of and ANY mishap - (and I just had a $1300.00 car repair today - and guess what - had to use the balance of a student loan to pay) will send me into a tail spin. I have sought help from CCC to no avail. I do not think that that I will be able to pay this off and think that I should just stop paying the credit cards and start the slow descent to hell right now (credit card companies calling, credit score shot...etc). I do want to keep my house which has absolutely no equity but can possibly let the car go. We would be cutting it close on chap 7 means b/c spouse makes decent income, but not enough to pay mortgage and both car notes and definitely not my credit cards. I am really afraid to go down the bankruptcy road, but at the same time just don't know how long I can continue to work and live under huge stress. I am really having a moral dilemma with this and am ashamed to be even thinking of bankruptcy, but am at the end of the rope. I really do not know which stress will be worse - going to the job or being harassed by creditors and facing the uncertainty of the whole bankruptcy thing. If there is anyone is the same boat or have been please give me some advice. I do plan to talk to a lawyer soon, but just wanted to hear from anyone with a similar experience.

[keepinitreal]

There are people on this site who were over the median income but still successfully filed Chapter 7 and were discharged. Call some bankruptcy attorneys and set up free consultations. Good luck!

[dakota112]

I earned six figures also but was glad to let the job go and wait out the 6 months and file. It takes a good deal of planning but it is better than being in ch 13 hell for 5 years! That is just too much to bear. Plus who knows what the economy will be like a year or 2 from now while you tread water in a 13. Plan, file 7 and start over and smarter. You will survive.

[dmu]

I am planning a bk. I met with a lawyer in June and initially wanted to file in August. After meeting with the lawyer, I kept thinking I wish I'd done things differently to get the most I could out of bk. Unfortunately we'd made a little too much to make Chp 7 a slam dunk and we had become current on all our bills (though it's a losing battle in the end). At the same time, I have a brand new baby and a husband that's working all day, 6 days per week. Then my husband tells me that he wants to go back to school before his GI bill expires. So we start looking for alternative employment for him so he can work and go to school. Unfortunately, I was busy with the baby and he was working too much to have time to properly look for another gig. My husband prayed that we'd receive a breakthrough.

I thought the breakthrough would come via a more flexible job for my husband. However, the breakthrough came via thought. I thought to myself, you have too much income to qualify for Chp. 7, your husband hates his job he wants to go back to school, and he hardly gets to see his new child because of all his hours. How do you solve this? The answer....have husband quit!!!

So now we're working on a 6 mth plan to file bk. This will probably be my husband's last month working for his current employer. He will trade in his job for school and the monthly stipend that the GI bill provides. This will fulfill my husband's wishes as well as reduce our income for the 6 mth look back. After my lease is refinanced we'll stop paying on our cc's and our current residence. The savings will replace my husband's income and we can move into one of our rental properties so there's no harm in letting the house go.

I've also asked my husband to change his benefits since we've had a qualifying life event. He can go back and max out his flexible spending account and get the lasik that he's been wanting for years. This is the upside of the "use it or lose it" feature of flexible spending accounts. We all know that if we leave any money in the FSA at the end of the year then we're SOL..it's lost. However, if you use all the FSA money and then separate from your employer (either voluntarily or involuntarily), you don't have to pay any of that money back even though you're no longer employed by that company and are not being charged the payroll deductions related to the FSA. As one insurance rep told me, the money in your FSA is yours "free and clear" even if you use it and don't hang around to pay it all back.

I've said all this to say that like many of you, I've gone through the emotional roller coaster. I spent two days crying and feeling ashamed because for the first time in my life, I couldn't pay all my bills. After several unproductive and adversarial phone calls with my creditors, my shame turned empowerment as I started to think of myself as a business and make decisions accordingly. I encourage all of us to shake off any shame that we may be feeling and think of how to maximize whatever situation we found ourselves in...no matter how bleak it may seem.

[dakota112]

To hell with shame. You all must do what is best for you and your family period. No one else is going to do this for you. Your family if available can be of great help as they were for us but in the end focus on survival and self preservation. In time you will move on and recover from this mess and heaql as I am currently doing with my family. It isn't easy but we have our health, are eating well and live in a clean and safe apt and I look forward to a better life. I feel sorry for all the people who must yet go through this but they will plan and move and get through. It is just a long ordeal so you and family must be strong and not blame each other. Good luck.

[yellowstone]

be aware that there's more to BK than just the means test and your income. with respect to planning, you have to tread a fine line between being pro-active and the kinds of things that will get your case dismissed or your discharge denied for abuse.

BAPCPA created all sorts of perverse incentives to plan your bankruptcy, but the courts and the trustees are on the lookout for planning that crosses the line. what is the line? nobody knows. as they say, it all depends on what the judge had for breakfast that morning.

my advice is that you need to be aware that passing the means test is not enough. you also need to have filed in good faith, and quitting a job could be considered bad faith. in fact, it probably would be if the court found you quit your job just to qualify for ch. 7. to the extent you have valid, non-bk reasons for quitting, you will need to document them and just testifying that you are stressed out will probably not be sufficient. if you file 6 months immediately after quitting, i would expect a lot of scrutiny. if you file 2 years after quitting, there will be less.

i recognize that there may be jobs that one might say the hell with it, especially in situations where you are asked to do the work of 2 people and/or in situations where there are more than profits on the line - i.e. teachers, social workers, etc... Or where you feel that all of the extra income is going to creditors who you can theoretically cut loose in a ch 7. however, the courts expect you to keep your nose to the grindstone, even to the extent that if you worked overtime pre-petition, the courts will expect that overtime to continue post-petition to fund a 13.

[Flamingo]

Go see a BK lawyer now before you do anything rash. If you quit your job, there is no guarantee you will be able to obtain one at any time in the near future unless you are in the medical profession with a degree. The robbing Peter to pay Paul is your sign you are in what I call the spiral into the black hole of bankruptcy. Once you start doing that, there really is no way out unless you hit the lottery, receive a large inheritance or someone knocks on your door with a $500,000 check. Best of luck to you.

[keepmine]

be aware that there's more to BK than just the means test and your income. with respect to planning, you have to tread a fine line between being pro-active and the kinds of things that will get your case dismissed or your discharge denied for abuse.

BAPCPA created all sorts of perverse incentives to plan your bankruptcy, but the courts and the trustees are on the lookout for planning that crosses the line. what is the line? nobody knows. as they say, it all depends on what the judge had for breakfast that morning.

my advice is that you need to be aware that passing the means test is not enough. you also need to have filed in good faith, and quitting a job could be considered bad faith. in fact, it probably would be if the court found you quit your job just to qualify for ch. 7. to the extent you have valid, non-bk reasons for quitting, you will need to document them and just testifying that you are stressed out will probably not be sufficient. if you file 6 months immediately after quitting, i would expect a lot of scrutiny. if you file 2 years after quitting, there will be less.

i recognize that there may be jobs that one might say the hell with it, especially in situations where you are asked to do the work of 2 people and/or in situations where there are more than profits on the line - i.e. teachers, social workers, etc... Or where you feel that all of the extra income is going to creditors who you can theoretically cut loose in a ch 7. however, the courts expect you to keep your nose to the grindstone, even to the extent that if you worked overtime pre-petition, the courts will expect that overtime to continue post-petition to fund a 13.

I don't know where you're getting this nonsense but, it's not remotely factual.
The bk code says nothing about requiring you to maintain employment. Nobody is going to require documentaion as to why you quit.
This poster won't be the first person on this site who quit a job or refused OT to qualify for a Chapter 7.
That being said- with an unemployment rate approaching 10% I'd be leary about quitting a high paying job.
Get yourself to a lawyer and get some facts before you quit.

[ssmdem]

This poster won't be the first person on this site who quit a job or refused OT to qualify for a Chapter 7.

My attorney who also works as a trustee actually TOLD us today to turn down any overtime we're offered in the next few months, as our numbers are close to pushing us into a chapter 13.

[BCA2009]

I don't know where you're getting this nonsense but, it's not remotely factual.
The bk code says nothing about requiring you to maintain employment. Nobody is going to require documentaion as to why you quit.
This poster won't be the first person on this site who quit a job or refused OT to qualify for a Chapter 7.
That being said- with an unemployment rate approaching 10% I'd be leary about quitting a high paying job.
Get yourself to a lawyer and get some facts before you quit.

Keepmine is correct. I have no idea where Yellowstone got his info, but it is total BS! No one will ask you why you don't have a job. Complete the forms, pass the means test, if you qualify, you qualify!

[starr4law]

Before you quit your job, please have a qualified bankruptcy attorney do a complete means test for you. Often times, people who think that they make too much money still qualify for a Ch 7 - especially those with more than one mortgage, car payments, etc. There are all kinds of ways to "engineer" passing the means test other than quitting a job that are completely legitimate (although you may have to wait a bit to file). That being said, the Trustee is disinterested in your state of employment - if you quit, you quit. No one is going to ask why. Just remember that the means test is a six month look back not including the month we are in - so if you quit today, it could still be awhile before you qualify (assuming that you do not qualify now).

Good luck!