Chapter 7 Question--We need help!

[Jessika1012]

Hello--I really need help in determining a few things before I even think of bankruptcy....

Can someone tell me if your tax refunds count in your means testing analysis when calculating your total monthly income from the past 6 months? We received them back in early February, and we are trying our best to pay off debt. We have a lot of it, and I am worried that if we decide to go forward, we will have to count this?

Second, my husband and I were very stupid (we know this now!) in our spending habits. We had no budget and a huge wedding at the end of 2004. We also definitely had a problem in obsessively buying clothing, shoes, and misc. brand name items internationally and in the U.S. off ebay in the past 2 years. We hiked up our CC debt by doing this and would buy and pay through out checking account. We got caught up in using credit card checks to cover the balances to help us pay for the costs that went through our checking account. I am very concerned that this will not help us much because we spent a lot per month with every intent of paying it back in the future through tax returns and a stock cash out. We realize that we made a huge mistake in spending and really want the opportunity to fix it but don't know how to do this. We are in over our heads with 100,000 worth of debt and cannot manage anymore We don't want this to ruin us, and we dwell on this day in and day out.....but who wouldn't! We know we did this and know we have to fix it. It has been three plus months since we have written a check to a credit card, and we are now focusing on paying some of it down. We just don't know how far we are going to make it. Any suggestions or advice would be greatly appreciated. We are in desperate need. How will these credit card checks affect us, and is there a way to get out of this?

Thanks!

[keepmine]

Refunds are not mentioned in the forms dealing with income.

http://www.uscourts.gov/rules/Revised_Rules_and_Forms/BK_Form_B22A.pdf

Were I you, I'd start making some appointments with lawyers and lay out the totality of your situation. For sure, quick using those cards. Likely the more time between the last use and a bk filing the better.

[Jessika1012]

What about stock cash outs?

My husband cashed out his stock in the amount of 3000 to help us pay some of it back, ...do you know if this counts? It was a one time thing...so I would assume it doesn't count as well? Thank you so much. I appreciate your help very much.

we have not been using the cards for three months now...

[StaciMM]

Using the stock to pay debts won't be a problem, though it will need to be indicated in the paperwork if you paid any one creditor $600 or more (total) in the 90 days before filing. The trustee will then make them give it back, to be evenly distributed among creditors.

What you don't want to do is transfer property, give anything away, or sell anything for less than its worth. For any large transactions, keep a paper trail.

Also, start analyzing where your money goes, as you'll need to provide budget info when you meet with attorneys.

[nicolemarang]

You need to decide if bankruptcy is for you! If you are going to file, there is no sense of getting your self strapped for cash by paying down a bunch of debts that your going to bankrupt anyways!! IF you have already cashed and spent your tax return, you are in the clear, they can't ask for that back and it doesn't affect your income because those were taxes that you already paid. Those amounts would already be included in your income!! However, I'm not Sure about any Earned Income or Child Tax Credits, it seems there is no standard for that.

[StaciMM]

The OP has cash advance issues... With those in the recent past, it is best to postpone filing and make an effort to make minimum payments for a while.

You need to decide if bankruptcy is for you! If you are going to file, there is no sense of getting your self strapped for cash by paying down a bunch of debts that your going to bankrupt anyways!! IF you have already cashed and spent your tax return, you are in the clear, they can't ask for that back and it doesn't affect your income because those were taxes that you already paid. Those amounts would already be included in your income!! However, I'm not Sure about any Earned Income or Child Tax Credits, it seems there is no standard for that.