Still scheming for a 7...

[leftyf]

Please poke holes in my latest plan to file 7 instead of a 13:

1) Quit job for a few months or find a lower paying job to get my income under median. I like my job, but don't love it...even after 20 years.
2) Take a partial distribution on retirement funds to live on if necessary for a few months...I hope. Roll the rest over into IRA.
3) Hope I can get back on track after 7 is over...risky, but not that unlikely.

I've been talking it over with the wife and we're considering this course of action...any advice? Will a retirement distribution and roll-over somehow destroy my bankruptcy exemption for these funds?
Thanks,
Lefty

[keepmine]

I'm not sure I'd quit my job and raid my retirement accounts just to qualify for a Chapter 7.
Lots of things to consider one being, would the lower paying job provide healthcare benefits?
Sometimes there is no alternative but a 13. What sort of payback to unsecured creditors are you looking at?

[HHM]

Dumb....

That plan creates way to much future uncertainty that may negate any benefits of a chapter 7.

[leftyf]

HHM...what do you really think? lol. Keepmine, I'm at about $80K income for family of 5 with $90K of debt. Preliminary calcs look like I'll have a payment of around $900/month...seems to be undoable. This is NOT an attorney calculation, so maybe things will get better once I have the payment calced by my attorney....thanks for the input.
Lefty

[JRScott]

Please poke holes in my latest plan to file 7 instead of a 13:

1) Quit job for a few months or find a lower paying job to get my income under median. I like my job, but don't love it...even after 20 years.
2) Take a partial distribution on retirement funds to live on if necessary for a few months...I hope. Roll the rest over into IRA.
3) Hope I can get back on track after 7 is over...risky, but not that unlikely.

I've been talking it over with the wife and we're considering this course of action...any advice? Will a retirement distribution and roll-over somehow destroy my bankruptcy exemption for these funds?
Thanks,
Lefty

I certainly wouldn't do #2. The reason is that it'll increase your tax burden at the end of the year. You'll have to pay the penalty for early withdrawal as well as normal taxes as though it was income. Very bad idea (Keep in mind also that so long as the money is in the retirement account it is protected in bankruptcy).

#3 concerns me, are you worried that even after a chapter 7 you couldn't make it? If that's the problem then its time to look at what you are paying for housing or vehicles. If they are to much it is time to consider giving up the house or vehicles in the chapter 7. Remember once you file a chapter 7 you cannot refile another one for 8 years. So you need to take the steps necessary to ensure that you do it right the first time.

How much a month is your rent/mortgage?
How much is your car payments?
What other debts are you keeping in a chapter 7?

I wouldn't do #1 either. If you've been at the same firm for 20 years, you are getting closer to retirement age. I've found as we get older it gets harder and harder to find places willing to employ us (they don't figure we'll last long enough to be worth their while in many cases). Better to keep what seniority and benefits you've accumulated over the last 20 years.

[tradewiz50]

HHM...what do you really think? lol. Keepmine, I'm at about $80K income for family of 5 with $90K of debt. Preliminary calcs look like I'll have a payment of around $900/month...seems to be undoable. This is NOT an attorney calculation, so maybe things will get better once I have the payment calced by my attorney....thanks for the input.
Lefty

With your other post asking others on how to hide 7K from your filing, it seems your looking for a acceptance of your actions. Quiting a job to meet a Chapter 7, median income level is just plain old D-U-M-B!

$90K in the hole isn't that much. I bked twice that amount and did it without committing fraud, or by hiding assets to do so.

[magyar123]

Don't quit the full time job - ask for a transfer to a lower paying/part time job. Do not tell your employer the reason why all of a sudden you're interested in a partime job only. Once you file Chapter 7, and discharged, try to get your old job back.

[GoingDown]

It seems like you have significant assets and a large income. In this case, you'd probably be better filing a Chapter 13 bk.

Or just sit back and do nothing and let them garnish wages, etc.

That would still probably be cheaper than what it would cost you to find a lower paying job, etc.

And a lot easier.