Question about Taxes in bankruptcy

[reb512]

Hello all. I came across this site and I must say it's been a really good site to get information. I have two questions I'd like to ask. The first one is I have claimed my little brother on my tax returns for the last 3 years because my mom and I moved into together because she is disabled. She gave me permission to do so, and frequently borrows money from me for gas, and food for my little brother. I never ask her to pay it back and she allows me to claim him since I give her money on his care. However, I do not have any receipts for such because I didn't think I would ever need it. Now I'm thinking about filing CH 13 so I can keep my car, will the trustee look at my tax returns and question that? do I have to claim that I live in a household of 3 when I file, other than the car my mom and I have no other creditors together. Second question is I recently taken out a 401k loan to pay my state tax debt that I occured a few years ago. will the trust look down on that as well? any help you guys can give will be very welcomes. thank again.

[reb512]

bump

[HHM]

If the only debt you have is a car, there is absolutely, positively no way you should be filing BK.

Dump the car and get something you can afford.

[reb512]

No, I have approximately 20,000 in other debts, some credit cards, a work loan, and some other debts in collection.

[CindyLou]

As far as claiming your brother.....that's well within reason. If he lives with you and you support him then that's not a problem. As far as needed receipts, as long as he's on your tax returns that will be enough to verify that he is your dependant...I would think so anyway.

As far as your mother.....does she make an income? If so does she contribute to the household as far as paying expenses? I believe they will count her income, however they will then back out any money that is not contributed to the household.

Question: are you behind on your car? how much is it worth? how much to you owe? How long have you had it?

[reb512]

Yea he's on my returns and usually what I get back I help put back into his care, I lend her money for school expenses, gas, rent, my moms bills, and such. Plus, she's always borrowing money from during the year for things he needs. I also I contribute money to the household expenses since I live there.

She is disabled, she currently gets SSI, she doesn't work so I think that would not count as her contributing, but I'm not sure. I could be wrong.

On my car I'm about 1 month behind, I've had it since sept 05, but I'm really trying hard to get caught up I don't want it repossessed and have no way to work. I have other creditors calling me harassing me for payment, which I understand I do owe them money, I would certainly want to pay them back, but it just seems I can never get out of the hole to do so. A Chapter 13 is sounding promising to me, I want to at least pay a little back, but I'm worried my payment will be hefty and for a very long time.

[AngelinaCatHub]

reb512:

That is what bk is for. Not an easy way out, for sure, but if you wish to keep the car up, pay that first. You don't seem too bad off, but that is up to you to judge. At this time as all who reads will probably agree, it is time to consult an atty.

You may not even have to do a reaffirmation on the car if you keep it up and inform them. If you have to, that is what I did. (of course, I'm not out of this yet).

You may even be able to take your Mother as part of your situation as well as brother.

Bk is made for folks who have made mistakes or had serious complications. I sure did not want to harm those who loaned me money either. I had no choice. Stick in there, dude. 'Hub

[keepmine]

Don't file a 13 if you could qualify for a Chapter 7.
Stop paying all debt you wish to discharge and use that to get caught up on the car.

[JRScott]

What's your annual income?
What is the car payment?

As far as bk listing if they live in your household and you pay 50% or more of the bills I do believe you can count them but this is something you need to ask a lawyer.

As Keep says stop paying the unsecured debt and get the car up to date, if you do decide you need bk that car has to be up to date when you file.

[reb512]

I make a little less than $30,000 a year

my car payment is around $350 a month (I've had bad credit for sometime) and HSBC auto finance is killing me. I also have a orchard credit card through them, but it's maxed out, but a good payment history, I almost kind of want to pay it off before I file so I could keep it open to rebuild, I don't know if that would be a smart move.

well I'm sure since I loan out money to my mom for her and my brothers care I'm sure I contribute a good percentage of money yearly, not sure how much though. maybe 3 to 4 thousand a year.

I'm really considering a 7 if my car is caught up, so I can keep my car. and possibly put the orchard card to a 0 balance. I hear that if you are current than you don't have to add it to your bankruptcy is that true?

[keepmine]

First of all, odds are, HSBC will close that card anyway once they find out about the bk. Very seldom are cards with a zero balance kept open by creditors post bk. You'll just waste your money by paying it to zero.

Next thing you need to do is stablize your finances. Is your mother eligible for foodstamps? Is your mother and brother on medicade programs? Is it possible for your mother to get child support for your brother? You're access to credit is going to be curtailed for awhile. You need to get used to living on cash.

BK only solves part of the problem. The underlying issues that created the bk hace to be addressed as well or, in a year you're back in the same boat.