Do I qualify and does this make sense?

[IOEveryone]

In 2006 I lost my job making $140k a year. Bought a business across the country and it went under in a year. Spoke to a BK attorney and they said the debt was too fresh and I would run into too many roadblocks. Had to move to a new state to take a job making $112k. Was just let go after being there a year.

In May, 2009, I stopped paying on my mortgage and HELOC. The home is going through a short sale and if all is approved, should close by 9/10 which is the day before the foreclosure date.

Today, I owe approximately $90k left from business debt (line of credit and credit card each from two institutions for a total of 4 debts). If I land a job soon, I will make somewhere between $100k - $140k and will just grit and bear the monthly payments (unless someone has a better suggestion!!!).

If I don't get a job in 6 months, I'm certain I could qualify for a Chapter 7. Here are the sticking points / details:

1. If the home goes into foreclosure, then the HELOC will come after me ($60k). If that's the case, I may just become unemployed for 6 months to help myself qualify. Does that make sense?

2. My wife now works making $52k a year (only been there maybe 2 months). If I declare bankruptcy, she'll need to as well, right?

3. When I hit six months of no income (other than unemployment which I've nexver collected before and notifications say they're reviewing my case and to give theme 8 weeks) do I then get an attorney to file? What happens (hypothetically) if I then take a job 6 months and 1 day?

4. I'm still paying my C.C. companies on time about $1700 per month. Before all of this mess, I made good money for years (sometimes over $200k in a year) and all debts are between 6.9% - 9.99%. Any advice on contacting them, explaining the situation and the negotiating some new terms (principle only, or ???). Everywhere I read I'm told I have to stop paying them in order to get some solid dialogue started. If I do stop paying, get a job and then have sky rocketed interest rates, then I've just screwed myself royally.

Does this make sense? Any thoughts, suggestions or clarity? I don't want to declare bankruptcy if I don't have to. Don't want to keep paying $1700+ for the rest of my life when I have young children and othere plans for life.

Thanks.

[keepmine]

First of all, the means test is just part 1.
You still have to fill out schedules I and J to see if you have enough disposable income to fund a Chapter 13. Right now, with your loss of income you may well not have the income to fund a Chapter 13. We've had more than a few over the median filers discharge Chapter 7's.
Unless your wife cosigned the loans she should have no liability.

Most bk lawyers will give a free or lowcost initial consultation. Speak with a few and see what they suggest timing wise.
While the 6 month lookback is how median income for means testing is determined-schedules I and J are forward looking. If you wait until the last 6 months income falls off and then file the next day and get a high paying job before your 341 meeting it could be an issue. Many trustees will ask if you are currently employed and what your salary is.If it's high enough, you may encounter a trustee who will make a "totality of the circumstances" argument and try and convert you to a 13.

[IOEveryone]

Hhhmmm...

Thanks Keepmine.

I'm a little confused, however. Most of my questions stem from what my first (other state) bk attorney informed me of (or did not as the case may be). He shared that they would use the previous 6 months of my income and because of that figure, I would fail miserably for a Ch. 7. "Come back and see me in 6 months." Would you advise that I see someone again immediately and although the last 5 of 6 months showed decent earnings, because of my new circumstances, I could file?

Also, originally, I've always carried debt under my name and not my wifes just in case (God forbid) we ever ran into this situation. Because of the economy, my business loans all had to be personally guaranteed. So, we now rent and other than a 2004 SUV that is titled under my name (her new car is a lease so no equity), they have nothing to go after and she's untouchable? In my conversation with the attorney (over 1.5 years ago), he indicated that as a married couple, she'll have to as well. Maybe I misunderstood.

Also, now that I'm unemployed, any experience in working with debtors? Have you or read a thread in this forum about someone making any long term repayment plan with a reduction in principal or interest rates?

Like what your handle indicates, I'm trying to keep what's mine in the future to the legal extent possible.

Thanks.

[keepmine]

Nothing wrong with pre-planning. I'd start interviewing lawyers now.

There are a world of threads on here dealing with debt settlement.However, you need money to settle accounts. Please tell me you're not considering tapping a 401K or IRA. Those assets are exempt in bk. Your creditors could never get them.

[tcreegan]

questions

Hello IOeveryone,

1. Yes
2. No
3. Yes, depends
4. Good luck, probably, yes

Does this make sense? Any thoughts, suggestions or clarity?

90K from business + 60K HELOC = 150K debts
Lost house, no mention of other assets

I would say a BK makes sense if you can't get a job anytime soon. Even if you do, a Ch 13 mighty make sense.

You can file separately from your wife. If you are in a community prop. state you could actually get some joint acct.s discharged.

Consensus on the forum is that getting the job 6 months 1 day could be a problem but rarely is a problem. If you know you are getting the job, and deliberately file around it, that it is fraud. But not knowing, filing, then finding a job is not fraud.

If you want to negotiate w/ the cc people, be very careful; use your attorney, settlements have been in the 40% range and are dropping lower.

Good luck with all this,

Tom in Colo