I need advice & help!!

[dweebolina]

Ok, here it goes, sorry for the length!!! My husband & I filed Chapter 7 in December 2005. We had no choice as we moved (employment transfer) and couldn't carry two mortages anymore after 6-7 months along with our other bills. Needless to say, we were more than financially strapped and broke beyond belief so prior to filing (1 month prior) we withdrew my 401K (BIG MISTAKE 9K worth!!!) and paid some bills, bought food,did some very much needed repairs, etc. Well, we just filed our income taxes and get the most money we have ever gotten (7K) which we know will go to the trustee (bless his heart) and with that 401K withdrawl our attorney said that puts us in a different bracket for the means test even though our adjusted gross income was still below 50,000. Well, our problem is (besides stupidity & trying NOT to file) is that my husbands income is going to change dramatically (he will go on comissions plus a very, very small base pay) and we will not be able to afford a chapter 13 if it comes down to it.

My husbands base pay will only cover our health insurance, taxes, his company car charge, his 401K, and life insurance for us and after they take out all of this we will be lucky to have 100 left from his check, so needless to say we are very very worried. I work full time and don't even make 1300 and out of that I pay 400 per month in daycare!! Between us, we still don't have a pot to piss in and know we have screwed up but didn't know what else to do as we did not want to file BK. Does anyone have any insight or suggestions besides we're screwed??? We need help desperately but don't know what to expect!!!

[StaciMM]

You say that your husband's income will change dramatically... What is this based on, and what is the time frame?

[copper2]

The Dark Night

Hi dweebolina, many of us have been in the place you are standing -you are going to make it through and you are going to come out on the other side. I myself tried to delay filing for a year and a half with the same dwindling income scenario. The only thing I can share is that it was with good intention, and in retrospect I lost that period of my life spending every waking moment and every action trying to "avoid bankruptcy." In my case it didn't matter - largely because of the nature of compounding interest. All I managed to do was tread water. And, you're not alone, my friends have shared that their commission structures are changing like yours. I myself have been told to expect a pay cut in August 2006, the first time ever. It is a devastating thing to consider doing, but think of your family unit as a "company" and what a company would do. It will be less emotional. This is a financial decision. Keep in mind, the writers of the Bankruptcy Reform ANTICIPATED AND EXPECTED a rash of filings in 10/2005 before the New Law, again shortly after the New Year in 2006, and yet a third wave to come in the spring of 2006! You can read about this on the internet. Good luck to you,

[dweebolina]

StaciMM

My husband was on a salary for one year and then will go to commission plus base at the beginning of April of this year. We haven't had our 341 yet, it is rescheduled for 3-23-05. Also, our income tax return was higher than normal due to paying intrest on two homes this year and we sent 3 years prior to the attorney and the trustee so I hope...........

[StaciMM]

This won't be easy, but the best advice I can think of right now is to try not to stress just yet. You probably won't know if the income will be an issue until the 341. Life insurance & health insurance coming out of his check should not be argued as frivolous, and though I don't know the details I understand that 401k is even allowed under post 10/17/05 filings.

[keepmine]