Should I file Ch.7 or Ch.13?

[SuzieBK]

The other thing to consider, if you have children and one of the parents is a stay-at-home parent, is that you would most likely need to hire a full-time, live-in nanny. So even though one spouse might not be bringing in any/much income, replacing him/her would be pricey.

[limegreen260]

Good question. What we've discussed is enough for the surviving spouse to be able to pay off all of our debts, plus funeral expenses, and a little left over to have a decent nest egg. Not enough for living the high life but enough that the remaining person doesn't have to worry about finances in addition to coping with the loss of a spouse for a year or so.

[hamburgervol]

Checked with my attorney and he said to absolutely get life insurance policies on both of us. He said it was allowable and would not raise a red flag at all as long as the policy amount were reasonable.

In that case 2 policies on both my wife and I would help us pass the Means.

I guess the next question would be what is reasonable? $250,000..$500,000...$1,000,000. My guess is what it would take for you to continue to have a normal life and not suffer any undue financial burden due to a death. My wife wouldn't be able to replace my income with me gone so I would think my policy should be higher.

[limegreen260]

$134 per month wouldn't put much of a dent in my unsecured debt. It would only payoff 15.5% of the total.

I'm not dead set against Ch.13. The failure rates of Ch.13 seems futile though.

As for the term insurance...If I die who's going to take care of my family and pay off my house, especially after BK?

Is Life insurance a luxury in a trustees eyes?

Maybe I'm wrong?

Checked with my attorney and he said to absolutely get life insurance policies on both of us. He said it was allowable and would not raise a red flag at all as long as the policy amount were reasonable.

[hamburgervol]

I get the impression that even if you pass the means test the trustee could still push you to 13 because of presumption of abuse.

$134 per month wouldn't put much of a dent in my unsecured debt. It would only payoff 15.5% of the total.

I'm not dead set against Ch.13. The failure rates of Ch.13 seems futile though.

As for the term insurance...If I die who's going to take care of my family and pay off my house, especially after BK?

Is Life insurance a luxury in a trustees eyes?

Maybe I'm wrong?

[Clouddancer]

I get the impression that even if you pass the means test the trustee could still push you to 13 because of presumption of abuse.

[limegreen260]

Ok so I failed the means. I have been thinking of getting a term life insurance policy on myself that's about $58 per month. Would that be permissible? Also we do not have dental insurance and have thought about checking into that. Would those expenses help us pass the means test? Is there a time period in which such things as purchasing insurances have to be done before you file?

I'm curious about this too.

[keepmine]

If your DI is $134, you should be in good shape to file a 7. I think the threshold amount that is a minimum to fund a 13 is $187.
I'd speak with a few lawyers and see what they say. Most give free or lowcost initial consultations.

[hamburgervol]

per the means test: I says I fail the means test If I did it correctly. The Vehicle Operation Expenses and Vehicle Ownership or Lease Expense was a bit confusing. Line 22= 2 or more Line 23=1

Monthly disposable income $134
60-month disposable income $ 8,044

Ok so I failed the means. I have been thinking of getting a term life insurance policy on myself that's about $58 per month. Would that be permissible? Also we do not have dental insurance and have thought about checking into that. Would those expenses help us pass the means test? Is there a time period in which such things as purchasing insurances have to be done before you file?

[hamburgervol]

www.722redemption.com can answer some of those questions.
The means test is just step 1. You need to fill out schedules I and J to determine monthly disposable income.

http://www.legalconsumer.com/bankruptcy/means-test/index.php

Fill this out and see where you stand.

per the means test: I says I fail the means test If I did it correctly. The Vehicle Operation Expenses and Vehicle Ownership or Lease Expense was a bit confusing. Line 22= 2 or more Line 23=1

Monthly disposable income $134
60-month disposable income $ 8,044

[OhioFiler]

I agree with you but wonder how hard it will be for us to get financing for a replacement vehicle after BK. It would be great is we could do a 722 redemption on in (I know understand 722 redemption).

Looks like the only draw backs in 722 is finding financing for 722 and high interest when you do find financing.

There is a lot of discussion on this site regarding replacing a car after BK. It will most likely be easy for you to finance a car after BK. You'll pay a higher interest rate of course but many people are reporting rates as low as 12%. Not bad really.

You may also be able to save money over a few months and buy a car for cash! This is a preferred method by many. Do some research on Dave Ramsey for reasons why this is a great idea.

Planning the BK is the smartest thing you'll ever do. Look around here for posts from people who dreaded not reading these forums and planning their BK.

Good luck to you!

[hamburgervol]

So the car is worth $10,000 and you value the warranty as worth $10,000. I would suggest getting a less expensive car and buying an extended warranty for considerably less than $10,000.


We need to separate our emotions (we like the car) from the facts (worth $10K vs owe $20K) as part of planning for BK. In the end you'll be much further ahead.

I agree with you but wonder how hard it will be for us to get financing for a replacement vehicle after BK. It would be great is we could do a 722 redemption on in (I know understand 722 redemption).

Looks like the only draw backs in 722 is finding financing for 722 and high interest when you do find financing.

[OhioFiler]

We like the car and it has 10/100,000 warranty. I'm not sure how easy it will be to replace after BK. I'm not sure what a 722 redemption is.

So the car is worth $10,000 and you value the warranty as worth $10,000. I would suggest getting a less expensive car and buying an extended warranty for considerably less than $10,000.


We need to separate our emotions (we like the car) from the facts (worth $10K vs owe $20K) as part of planning for BK. In the end you'll be much further ahead.

[keepmine]

www.722redemption.com can answer some of those questions.
The means test is just step 1. You need to fill out schedules I and J to determine monthly disposable income.

http://www.legalconsumer.com/bankruptcy/means-test/index.php

Fill this out and see where you stand.

[hamburgervol]

You need to determine what the exemptions are for Tennessee residents to understand the effect of a Chapter 7 on your home and vehicles.

I'm not sure why you would want to keep a car worth $10,000 you owe $20,000 unless you will be able to do a 722 redemption.

We like the car and it has 10/100,000 warranty. I'm not sure how easy it will be to replace after BK. I'm not sure what a 722 redemption is.