Will we qualify for CH 7 with means test? please help

[momxx5]

I have been spending many sick sleepless nights trying to face up to the fact that bankruptcy is probably in our future. Even the consumer credit counselor suggested it.

Earnings: previous 6 months take home 7,200/month
month of Jan & Feb 6,600/mo due to reduce income


DH, me and 5 children under age 15.

expenses:
mtg. 1,200
equity line 400
van(lease) 450
truck(lease) 500

cc debt 90,000 unsecured

We want to keep house and cars. Using our last yrs tax return we made WAY too much money, however DH has taken a large paycut and bonus/compensation is not guaranteed & in fact told not to expect anything - which last yr was 1/3 of income.

I cannot for the life of me figure out the means test. Is it possible to pass the means test for chap 7?

Are all living expenses included? medical expenses, food/month, etc

Thanks in advance for any help

[jennordhavn]

What state are you in? You need to look up the median income for you state and family size. That is the first step in determining whether you qualify for a Ch. 7. If you make more than the median, you can still qualify if you pass the means test. There is an online means test at www.legalconsumer.com.

Also, since your DHs income has been recently reduced, if you wait a few months, that will decrease your average monthly income since you only include the last 6 months. So if you are over the median, you can wait it out a few months in order to more easily qualify for a Ch. 7.

[momxx5]

Thanks for your response.

We are in NC.

I have stopped paying all cc's simply because there is absolutely no money.

I am afraid that some will go to court if we wait much longer. About 25% cc in collections.

I really do not see any assets that we have.

[jennordhavn]

It looks like the median income for a family of 7 in NC is $57,221. This is gross income. It looks like your family may make too much to qualify for a Ch. 7 but as I said, sometimes you can still pass the means test even if you are over median.

You should probably consult a BK attorney and get more information.

Good luck.

[OhioFiler]

It looks like the median income for a family of 7 in NC is $57,221. This is gross income. It looks like your family may make too much to qualify for a Ch. 7 but as I said, sometimes you can still pass the means test even if you are over median.

You should probably consult a BK attorney and get more information.

Good luck.

I think it's $88,321 which is over $7,300 per month.

[keepmine]

however DH has taken a large paycut and bonus/compensation is not guaranteed & in fact told not to expect anything - which last yr was 1/3 of income.


I'd suggest a few appointments with bk lawyers. Most give free or lowcost iniyial consultations.
The means test uses the most recent 6 months of income. You may just need to delay filing until your income is closer to rhe median.

[Trixie007]

It looks like even without the paycut you are 150/mo under the median...

[OhioFiler]

It looks like even without the paycut you are 150/mo under the median...

She's claiming $7,200 NET income so the gross could be quite a bit higher.

[jennordhavn]

I think it's $88,321 which is over $7,300 per month.

Oops, sorry. I must have looked at an outdated chart. I thought that seemed really low for 7 people......lol.

[Tbornetun]

Just because you don't pass the intial income portion of the means test does not mean that you may not pass after entering in all of your expenses. You need to complete the full means test to determine if you are eligible.

[momxx5]

Thanks again to everyone who relied.

I am a bit confused (or a lot) about the median income. When I go to the site posted on the other thread it shows NC median income around 67,000 for a family of 4, adding 6,900 per additional member.
So if I am reading it right the med. income for us would be 88,000. Does that seem right?

Also, if we have to wait to file how do we stop any cc debt from going into further collections or judgements?

Many of the companies are calling and offering settlements. I think it would whack out our taxes for next year having like over 50,000 forgiven debt. I really don't see how settling will help except would allow us to not claim BK.

(I am having a hard time coming to grips with BK, I know it drops off the credit report after 10yrs but you still have to answer "yes" anytime asked for the rest of our lives)

[keepmine]

Also, if we have to wait to file how do we stop any cc debt from going into further collections or judgements?


You have no control over that one.
Debts that created the judgement are discharged in bk and then post bk, your lawyer can get the actual judgment vacated.

[momxx5]

I'm not sure if any of this is relevant(sp?) but March month is looking pretty sad.

DH gets paid monthly...on the last day of the month.

Payday is today. I paid all the "important" bills and we are now current on the basics.

Mortgage
Equity
van
car
electric
gas
cable internet
cell
car ins.

Catching up on all of the above has left us with about $1,000 for the month of March for our family of 7.
Do based on these facts do you think that chap 7 is probable?


Also, I have 3 kids needing money for field trips and 2 birthdays this month.

[eddiep]

I hear you, sleepless nights seem to be a prerequisit to filing bankruptcy! But take care of yourself, get some sleep! I can't advise you to file, that is your choice. But it doesn't sound like you have a choice. If you think about it, carrying around $90k in debt that you can not pay is not going to help your credit score either.

I know you are also concerned about how to hold off the wolves until you file. I worry about that too. I stopped paying cc in October 2008 and will file in April 2009. I have hired an attorney and I have given all the cc his name and number. That seems to be holding them off, for now anyhow. I feel much more comfortable since hiring a lawyer and gathering information here. The attorney I hired deals only in bankruptcy and I feel confident that he knows the ins and outs of our local bk court. Talk to a lawyer and get some sleep.

[cityish]

Also, I have 3 kids needing money for field trips and 2 birthdays this month.

I have a suggestion about the field trips. I am a teacher and FYI it may be that the teachers at your school have access to a "grade level fund" that they can dip into to cover the cost of admission tickets for kids who otherwise could not afford to attend.

I realize you may or may not be comfortable having this conversation with your child's teacher but I'm putting it out there just in case.

For example, at my school we usually inflate the cost of the field trip per child by a few cents or a dollar or whatever, to cover the cost of unforeseen expenses or for kids who otherwise can't afford to go. Any monies that are left over go into the grade level fund for class supplies or future field trips. Just a suggestion. Hang in there!