Experts whats your opinion; would this raise suspicion?

[pamkev]

I don't think it will come up. In bankruptcy, time seems to heal everything. The longer it has been, the more things are not so bad. It's just a fact of the process. Many people have come down a similar path as you. They have had tens of thousands in the bank (liquid), nice 401K, and tens of thousands in available revolving credit. Then something happens and we believe that we can just "get by" for a "little while" on the credit and savings. After the "little while" (several months) go by, we then start to get desperate and withdrawing fro the 401K. Next thing you know, maybe 12 months later, you realize that this is never going to work!

That's the reality of it. It just is what it is at this point. You just start bankruptcy pre-planning at this point and relax in knowing that a fresh start could be as close as 6 months from filing a Chapter 7. Even if you end up in a Chapter 13, you can relax in knowing that the hounding creditor calls and "threats" of lawsuits, and actual lawsuits, are stopped (stayed).

Agree with you. I'm on a totally different message boards think a mouse park and some person happen to ask about bankruptcy some posters have been kind and gentle others have told them to raid there 401 K because BK will ruin their lives. I sent pm to the person and told them about this forum hope they come here soon.

[lvmcse]

I don't think it will come up. In bankruptcy, time seems to heal everything. The longer it has been, the more things are not so bad. It's just a fact of the process. Many people have come down a similar path as you. They have had tens of thousands in the bank (liquid), nice 401K, and tens of thousands in available revolving credit. Then something happens and we believe that we can just "get by" for a "little while" on the credit and savings. After the "little while" (several months) go by, we then start to get desperate and withdrawing fro the 401K. Next thing you know, maybe 12 months later, you realize that this is never going to work!

That's the reality of it. It just is what it is at this point. You just start bankruptcy pre-planning at this point and relax in knowing that a fresh start could be as close as 6 months from filing a Chapter 7. Even if you end up in a Chapter 13, you can relax in knowing that the hounding creditor calls and "threats" of lawsuits, and actual lawsuits, are stopped (stayed).

Thank you JustBroke. You advice is so kind. In my lifetime, I never thought I would go down this route. So much has happen in the last 3 years. Sometimes I just like to hide under a rock Also we plan to rent a house soon. We currently rent a apartment. With my dog barking, I need to move. If I rented sometime higher would the BK courts say something if I should file?

[lvmcse]

Amen to that, between my daughter and son they were killing us. The son not so much as of now but has in the past which like you also assisted in crushing our debts and really wiped out our savings. Then it just snow balled from there lack of hubbys work, medical issues, etc just never recovered and should have filed years ago. Pam

Hi Pam! Your a GREAT MOM! I don't know if you get this but many people say I should drop my son. I would love to do that but I am a Dad. I do not abandon my child no matter how old he is. Granted I'm taking a hit now.....a big hit! That's life.......

[pamkev]

Hi Pam! Your a GREAT MOM! I don't know if you get this but many people say I should drop my son. I would love to do that but I am a Dad. I do not abandon my child no matter how old he is. Granted I'm taking a hit now.....a big hit! That's life.......

Oh yeah I was told that. I don't know what the issues were with you son but mine was drugs and all that comes with that. I don't know how many rehabs we sent him to (that's where the saving went and some cc debt also) it was either we keep our money and watch him slowly kill himself or spend our money and give him a chance. He has now been clean and sober for years now, does he still make stupid choices yep but not one's that will kill him. Pam

PS I was told by a wise older couple while going though the times with my son that you want to ask yourself did you do everything you could to help him and if the answer was yes then you will have no regrets if you ever got that dreaded call to tell you he was gone. They spoke from experience

[btbeme]

I think you are clear; however, like a lot of people with a few "warts" in their file, you should plan for two important steps. First, consult with a handful or more well informed BK attorneys in your area. They should know the proclivities of your Trustees on these few questionable areas that you have. Second, I would predict that you should expect a couple months wait before you file for your eventual attorney to get all the ducks in a row. While I don't see anything on the surface that would necessarily torpedo your filing, I would expect that YOU would feel much more comfortable having your knowledgable attorney fully informed about all details of your filing before it happens. That can take a little time to answer all their questions and provide material backup for your answers.

While the info that you post does not present any obvious "red flags", there may be enough small items to add up to a handful of Trustee questions - which you and your attorney should hopefully be able to answer in stereo if asked in a 341 hearing. In you situation, as far as I can see, you would be clear, but I would expect some questions. That being said, the longer time period between the activities that you yourself question and your eventual filing, the better - less to explain.

If I were you, I'd find a decent atty, turn off the phone, and wait a few months (while paying nobody nuthin'), making sure the CA exemptions cover what you have left. Then file, wait your 90 days or so, and rest easy.

Keep us dialed in - I would be interested in knowing how it goes.

[lvmcse]

I think you are clear; however, like a lot of people with a few "warts" in their file, you should plan for two important steps. First, consult with a handful or more well informed BK attorneys in your area. They should know the proclivities of your Trustees on these few questionable areas that you have. Second, I would predict that you should expect a couple months wait before you file for your eventual attorney to get all the ducks in a row. While I don't see anything on the surface that would necessarily torpedo your filing, I would expect that YOU would feel much more comfortable having your knowledgable attorney fully informed about all details of your filing before it happens. That can take a little time to answer all their questions and provide material backup for your answers.

While the info that you post does not present any obvious "red flags", there may be enough small items to add up to a handful of Trustee questions - which you and your attorney should hopefully be able to answer in stereo if asked in a 341 hearing. In you situation, as far as I can see, you would be clear, but I would expect some questions. That being said, the longer time period between the activities that you yourself question and your eventual filing, the better - less to explain.

If I were you, I'd find a decent atty, turn off the phone, and wait a few months (while paying nobody nuthin'), making sure the CA exemptions cover what you have left. Then file, wait your 90 days or so, and rest easy.

Keep us dialed in - I would be interested in knowing how it goes.

Yes I will. Thank you.

[EmmaT]

From Wikipedia:
"A student loan is designed to help students pay for university tuition, books, and living expenses. It may differ from other types of loans in that the interest rate may be substantially lower and the repayment schedule may be deferred while the student is still in education. It also differs in many countries in the strict laws regulating re-negotiating and bankruptcy."

Using a credit card to pay school related expenses is NOT the same as taking out a "student loan". You can put $200,000 on your credit cards to send your kid to Harvard and they can't keep you from discharging it in BK. It's still unsecured cc debt. It's the Sally Mae loans guaranteed by the Federal Government that cannot be discharged.

[justbroke]

Using a credit card to pay school related expenses is NOT the same as taking out a "student loan". You can put $200,000 on your credit cards to send your kid to Harvard and they can't keep you from discharging it in BK. It's still unsecured cc debt. It's the Sally Mae loans guaranteed by the Federal Government that cannot be discharged.

First, I would never use Wikipedia for the legal Bankruptcy definition of a student loan. The Bankruptcy Code specifically defines it as an "educational benefit", and not a "student loan" for this reason. (11 USC 523)

A credit card company COULD argue that any extension of credit to a school is an "educational benefit" and that it is non-dischargeable per the code. This is the same reasoning why credit card companies have successfully argued that paying taxes with your credit card, also renders the debt non-dischargeable.

This is why you need a competent bankruptcy attorney in your area who is familiar with the case law and local Trustees in your area.

[lvmcse]

First, I would never use Wikipedia for the legal Bankruptcy definition of a student loan. The Bankruptcy Code specifically defines it as an "educational benefit", and not a "student loan" for this reason. (11 USC 523)

A credit card company COULD argue that any extension of credit to a school is an "educational benefit" and that it is non-dischargeable per the code. This is the same reasoning why credit card companies have successfully argued that paying taxes with your credit card, also renders the debt non-dischargeable.

This is why you need a competent bankruptcy attorney in your area who is familiar with the case law and local Trustees in your area.

Wow. This is valuable information. Again Thankyou. What is your opinion on this:

With all my expenses, (rent, transportation costs, insurance, secured debt: car payment, unsecured debt cc payments) I am coming up short at the end of the month. My question is Am I bankrupt? Been reading different things on this blog which say DMI does not include cc payments. Thanks again JustBroke.

[pamkev]

Wow. This is valuable information. Again Thankyou. What is your opinion on this:

With all my expenses, (rent, transportation costs, insurance, secured debt: car payment, unsecured debt cc payments) I am coming up short at the end of the month. My question is Am I bankrupt? Been reading different things on this blog which say DMI does not include cc payments. Thanks again JustBroke.

If you don't make cc payments can you make it with the rest of the bills

[justbroke]

As for whether a creditor (credit card company) would go through the adversary proceeding (AP) process to get the debt to be declared non-dischargeable, is something I can't tell you. However, many of them just don't care and won't pursue it and just let it discharge.

With all my expenses, (rent, transportation costs, insurance, secured debt: car payment, unsecured debt cc payments) I am coming up short at the end of the month. My question is Am I bankrupt? Been reading different things on this blog which say DMI does not include cc payments. Thanks again JustBroke.

If your liabilities (debt) exceeds your assets (money, equity) then you are "insolvent" or bankrupt.

For the purposes of insolvency, you get to include your credit card payments. For the purposes of bankruptcy and determining whether you can file Chapter 7 or need to use Chapter 11/13, you need to calculate DMI to determine what you could afford if the unsecured and surrendered secured debt were discharged.

[lvmcse]

As for whether a creditor (credit card company) would go through the adversary proceeding (AP) process to get the debt to be declared non-dischargeable, is something I can't tell you. However, many of them just don't care and won't pursue it and just let it discharge.

If your liabilities (debt) exceeds your assets (money, equity) then you are "insolvent" or bankrupt.

For the purposes of insolvency, you get to include your credit card payments. For the purposes of bankruptcy and determining whether you can file Chapter 7 or need to use Chapter 11/13, you need to calculate DMI to determine what you could afford if the unsecured and surrendered secured debt were discharged.

Again JustBroke thanks. It appears your a pro at this. When you say DMI, is my min credit cards included in this calculation? Trying to locate a formula to see if I qualify to chapter 7. I did the means test. It said I qualify. After reading other posts, the means test is not the only thing they look at. Without my cc payments, of course I will have DMI. With them, I'm in a big hole. What's your suggestion?

[lotsahats]

How long has it been since you made a school-related expense? If it's been a while, they might not look too far back. And you said you only charged about $4K in school expenses. That amount might not even be worth an AP. (Of course, I could be wrong--I'm not an expert like JustBroke. Actually, you should take anything I say with a huge grain of salt.)

[ValleYum]

Your minimum credit card payments can not be counted in the DMI calculation.

Have you looked at Schedules I and J? You said your Means Test shows that you are eligible for a Chapter 7 - Yay!! - but Schedules I & J are where DMI is determined.

Here is the link to Schedule I (Income): http://www.uscourts.gov/uscourts/Rul...006I_1207f.pdf

Here is the link to Schedule J (Expenses): http://www.uscourts.gov/uscourts/Rul...006J_1207f.pdf

A good local bankruptcy attorney will be able to tell you what expenses will be acceptable by the trustees in your area.

At the bottom of Schedule J there is a "Statement of Monthly Net Income" where you subtract the expenses on Schedule J from the income on Schedule I. The "Monthly Net Income" that you compute on Schedule J is your DMI.

[lvmcse]

Your minimum credit card payments can not be counted in the DMI calculation.

Have you looked at Schedules I and J? You said your Means Test shows that you are eligible for a Chapter 7 - Yay!! - but Schedules I & J are where DMI is determined.

Here is the link to Schedule I (Income): http://www.uscourts.gov/uscourts/Rul...006I_1207f.pdf

Here is the link to Schedule J (Expenses): http://www.uscourts.gov/uscourts/Rul...006J_1207f.pdf

A good local bankruptcy attorney will be able to tell you what expenses will be acceptable by the trustees in your area.

At the bottom of Schedule J there is a "Statement of Monthly Net Income" where you subtract the expenses on Schedule J from the income on Schedule I. The "Monthly Net Income" that you compute on Schedule J is your DMI.

First of all, I cannot say THANKYOU enough. You guys and gals are great!! I noticed that the means test included on this blog uses maxium levels. For instance, utilities 400. When I use the sheet, my utilities are around 275.00. I adjusted rent to refect levels. My question is that when I used the forms you included I do see a small surplus. Is it possible to pass the means test but fail these Itemized deductions?