More Questions

[Tonyababyrn]

I have a previous post--and most of my questions were answered. Here a few more--and I reposted the background--taking out the questions that were answered. Thanks to all that responded earlier--it has helped alot.

Background:

Having to file bankruptcy in the next few months.

Background info:

Husband--federal employee--steady income--due to retire in 10 yrs--monthly take home pay is $3000

Wife (me)--RN--but off full time work since March, worked pt time off and on till July. No work since mid July--bad back/eyes.

Had a full time job for last 8yrs and when left in Jan--got retirement payment of $7000(my share after penaltys)

18 yr old daughter in college
2 other children--13 and 8


Live in Louisiana

Mortgage--originally $168,000 predatory lending at 10.75% ARM, which payment just increase from $1568 to $1951. Stupid decision, wanted a house and someone approve us!! Balance now--$167,000. Behind 5 months. Starting foreclosure--got letter from lawyer stating he was contacted by bank.

Lots of medical bills due to my health issues and several surgerys in last year.

Credit cards--$15,000

3 vehicles--1 financed at $490/mo, balance $16000, other 2 paid off, 1 is husbands truck to go to work, other is non working 97 honda suv.

No assets of any worth--we have tvs, dvd players, surround sound, computers (kids each have one), firearms.

Questions--

Chapter 7 or 13--we decided to let the house go back to the bank and keep the truck. We can pay our back taxes off in installments to the state.

We don't pass the median income limits due to the retirement money I recieved in July. Should we file now since our income has decreased by half or wait-surely they take into account that we don't bring home that much now.

If we know that we are letting the house go back--do we just put the national standards in the blanks for housing, even if we don't know what our rent will be (haven't found a house yet)?

Something else that has come up--my husband is supposed to be getting a check for back pay at work--a build up of pay that was not paid since he started work back in 1991. It could be several thousand dollars.We have no idea when this money is supposed to come--but supposed to be after the first of the year.

If we do CH7 now and we get this money after the case is closed--can the trustee take it--since we know it is coming? What about tax refunds?

Since we are in Lousiana--are there any links that may answer these questions? They do law differently down here!!

Sorry for all the questions?? I have been reading the posts for days and seem more confused.

Thanks so much for the assistance!!

[lrprn]

See my answers below, Tonya....

Questions--

Chapter 7 or 13--we decided to let the house go back to the bank and keep the truck. We can pay our back taxes off in installments to the state.

You don't get to decide Ch 7 or 13 - how your incomes compared to your expenses on the Means Test is what determines which you can file.

We don't pass the median income limits due to the retirement money I recieved in July. Should we file now since our income has decreased by half or wait-surely they take into account that we don't bring home that much now.

The only thing the bankruptcy court cares about is your income for the past six months, period. If you can wait to file until six months has passed since you received your retirement money, things will go MUCH better for you on the forms and you should be able to file Ch 7.

If we know that we are letting the house go back--do we just put the national standards in the blanks for housing, even if we don't know what our rent will be (haven't found a house yet)?

Even though you are letting the house go back, you should use your current mortgage and value figures on your forms. This will maximize your expenses and if you are a borderline case, it may prevent you getting pushed into a Ch 13.

Something else that has come up--my husband is supposed to be getting a check for back pay at work--a build up of pay that was not paid since he started work back in 1991. It could be several thousand dollars.We have no idea when this money is supposed to come--but supposed to be after the first of the year.

If you know already that it is coming, be sure and declare it on your forms. Leaving it off is fraud. Unfortunately due to the amount your trustee may take it for your creditors....ask your lawyer about this.

If we do CH7 now and we get this money after the case is closed--can the trustee take it--since we know it is coming? What about tax refunds?

If the money comes within six months after closing, it's possible the trustee may come after it for your creditors. Again, ask your lawyer.

Since we are in Lousiana--are there any links that may answer these questions? They do law differently down here!!

Here are a few bankruptcy links specific to Louisiana - hope they are helpful:

http://www.louisianabankruptcylaw.com/

http://research.lawyers.com/Louisiana/Bankruptcy-in-Louisiana.html

http://www.bankruptcyinformation.com/LA.htm

http://www.bankruptcyaction.com/laexemptions.htm

http://www.laeb.uscourts.gov/

http://www.lamb.uscourts.gov/

Sorry for all the questions?? I have been reading the posts for days and seem more confused.

Thanks so much for the assistance!!

Hang in there - we all had lots of questions as we first started on the bk journey. Keep asking whatever you want - we'll answer what we can.

[cherir]

I can help you with a few of your questions:

First, if you file for bk anytime soon, you can expect it to take many months, and you won't be discharged by the first of the year, when you possibly expect that additional money. Basic timeline is: file bk(which can take several weeks - paperwork and corrections), 341 meeting within 4 to 6 weeks, if no problems discharge within about 60 days after that.

Second, you MUST disclose any money you expect to be coming to you, so you would have to disclose that money is on the way. Could the trustee take it? YES. Would he? Who knows.

Third, it matters not how much money you make today. The new rules go off of what they consider currrent monthly income, calculated by taking the average income for the last 6 months. For this stupid new law, many people are forced to "time" their bk to let some higher income months drop off. If you waited, let's say 6 months, and did your last 6 months average income, would you be under the mean? If so, your attorney may advise you to wait to file.

Even if you are still over the mean income, once your lawyer does the "means test" paperwork, you may still qualify for chapter 7. We did. If your income has dropped by almost half, you very likely may still qualify. Lawyers and trustees alike are confused by this new law and are making decisions as they go. Even if you are a borderline case, might be worth trying - worst thing is they will convert you to a chapter 13.

Ask your lawyer, but I wouldn't be moving out of the house until you had to. You may only qualify with THAT mortgage payment. If you find a house to rent for much cheaper, may throw all your numbers off and you no longer qualify. It varies by state, but who knows how long you will be able to stay in the house until you are evicted. Again, check with your lawyer.

My advice - if you are anywhere near a "complicated case", definitely use a lawyer. I can't tell you the peace of mind we have had knowing someone is fighting this/taking care of things for us. We paid our last $1500, but it has been so worth it.