So many many questions

[pavlikclan]

So this is the skinny. My husband and I have worked with a credit counseling agency over the last year and some months to repay our credit card debt. Earlier this year he lost his job (company closure) putting us behind on our mortgage. His former employer THEN pressed theft charges against him for some bullshit he supposedly stole from the business. So now on top of our payment to our credit counseling place our house our regular monthly bills he has to pay aprox. 2600 in fines and restitution (within 12 months). (I know this 2600 dollars cannot go away even in bankruptcy). We are stretched to the limit as it is. We are currently in a trial period for the making home affordable plan for our house note. I am however, thinking we are going to have to file bankruptcy. I would REALLY like to keep my home in this bankruptcy I have already gone down the road of losing a house during a chapter 7 that was discharged HA exactly 8 years ago this coming Feb.

There are all kinds of issues with this though. A) I need to make a 550 dollar payment on my propane bill on top of this I am supposed to be paying for my propane on a prepay basis so I need to pay for Jan fill as well meaning I have to pay approximately 385 dollars in addition to the 550 I already owe them. B) I owe his criminal attorney 1700 dollars. C) I owe my parents an additional 1700 dollars because they paid the retainer for the above attorney.

So this is what I am pretty sure of. I cannot pay my parents back prior to filing because it would be considered a preferential payment, but what about the attorney, or paying what I owe currently for my heat and prepaying for Jan heat?

How likely is the court to try to take my tax return? We have three children so get child tax credit, and may even possibly be entitled to earned income credit this year because our income has so significantly reduced. (We've gone from 75 k a year down to about 40k ish this year).

Is there ANY possible way to save my house out of this deal. I don't foresee us being able to make the chapter 13 payments AND on top of that paying all of our regular monthly bills AND restitution crap. So the only way to keep the house is to first off get the account current which is approximately 2k and then continue to make payments. There again wouldn't this be considered a preferential payment?

So I am wondering do I file now and pray they don't take my taxes, or do I wait till after and what the hell can I legally pay in the meantime without getting my ass in major trouble??? Oh and as for assets HA. We have three vehicles. The one my husband drives which we had during the first BK 8 years ago that the court was supposed to take and never did cuz it wasn't worth taking then, one that is worth maybe 500 bucks, and one that is wrecked, the alternator is shit it has front end damage and I would assume is worth nothing. No wedding rings (we hawked them) all other assets including 401 k were liquidated over a year ago at this point.

Anyone out there smarter than me know?

b

[newbie2]

If you can wait to file until you have received your income tax refund that is always best. I don't know what your states exemptions are (if you can exempt your refund) but you can spend it on reasonable and necessary things (your heating bill for example and to catch up on your mortgage payments). It doesn't sound as if your vehicles are going to give you any asset issues.

As far as paying the attorney, you should be able to go ahead and do that. (Double check with a BK attorney though) His payment is for services rendered, not a typical unsecured debt that would cause a preferential payment. I doubt though that you could pay your parents back without it raising an issue.

You really need to sit down with an attorney soon and go over all of your options, as you have a couple of variables here that an attorney would be able to help you sort out. Good luck to you.

[pavlikclan]

We are going to go talk with an attorney in January. I am stopping CC payments now because I know we have to file. She has thus far advised us to file AFTER we get our tax return back. She said only 1k is exempt a piece. They can take the rest. Although idk what the hell I am going to DO will all that money if I am not paying for my credit cards and I can't make more than a 600 dollar payment to my husband's restitution account because it will be preferential. We are not people to go out and just waste money on anything. We don't live high on the hog so to speak. The payments in and of themselves I am guessing will be around $250 a month. A new question I know we can have 2k in our account is that when we file or when we go to our meeting of the creditors? I know discharge comes shortly after that. If at all possible I would like to try to hang onto the 1800 in cash until discharge at which time I can use that money AFTER the discharge is done to pay my folks back. They are elderly and gave us seriously their LAST in savings for this. I know we can't actually GIVE them the money until after it is discharged.

Another question of our three vehicles one was gifted to us by my parents last fall. Before we even got it titled or insured my son managed to throw a rock and knock the back window out of it. It is worth MAYBE 1k in it's current condition minus one back window bad shocks bad tires and it dies at random times. lmao. Will the bk trustee frown upon us receiving a car. I am not stupid I would not ever try to hide it from them. When we filed before we had a drag car, a car trailer, a 4 wheeler, and three vehicles and the one they said they were taking they never came and got. Our truck still runs my hubby drives this to work, this car that was gifted to us runs, the other vehicle was involved in a car/deer collision, radiator is bad, alternator is smoked, it is just sitting in our yard unliscenced as well. I don't want them to leave us with that and take one of the others it's junk basically.

Seriously the value of all THREE vehicles is MAYBE $1,500 dollars. We've not ever purchased a new vehicle in the 11 years we've been together. I am hoping we can work something out after the bankruptcy to get something more reliable for my husband to drive to work.

Another question which may be strange. Has anyone undertaken any major schooling after a bk. I am looking at the possibility of going to medical school. I know student loans shouldn't be a problem but what about private student loans?

bah being poor sucks!

[free2breathe]

From what I can see, your exemptions for car, tax refund and musical instruments is a total of $5000, but the tax refund can only be $1000 of that (10k for a couple, 2k for the refund). Some things you can spend your tax refund on are the propane if it's used to heat your home, car insurance in advance, staples for your pantry, etc. No luxury items obviously
Also, it's perfectly reasonable to pay your attorney with part of your tax refund. That will take a chunk.
If she didn't tell you already, keep receipts for what you spend your tax refund on in case the trustee questions it.

[Peeps]

I am looking at the possibility of going to medical school. I know student loans shouldn't be a problem but what about private student loans?

According to the AMA, people are graduating medical school with an average $156k in student loan debt. That's an awfully big chunk of change. And as so many of us have experienced, you're right... the student loans shouldn't be a problem... until they're a problem.

With the exception of some specialists, who amass more like +$500k in debt, a lot of docs these days are saying they'd do it differently if they could start over. I guess it's not just the docs. I've also heard nurses and techs say the same thing. I worked in the medical device industry for quite some time (too many decades to admit to, for someone who keeps turning the same age every year) so honestly I'm not just tossing up some random observations - there are a lot of practitioners being squeezed from every direction and many say it's really hard to get those loans paid off. It seems like such a sad situation for people who wanted nothing more than to help others. If you do decide to go into medicine, I hope there's something lucrative within it that interests you and will serve you well in paying off debt and living a comfortable life. Best of luck to you in whatever you choose to do.

[pavlikclan]

Oh yes I understand the student loan debt of doctors. I am a researcher, I research everything to the point of exhaustion. I figure when I'm done I'll be around 200k in debt. It's a lot a way lot. Unless I decide otherwise though, my area of interest is emergency medicine, possibly with a specialty in pediatric emergency medicine. I know the first few years after college will for lack of a better word BLOW, residents make around 50 k a year regardless of specialty. However, with going into emergency medicine if I apply to work where the state government wants me to I can have SOME of my loans paid back for me. How much depends on where/what you practice. I've seen figures upwards of 100k in student loan repayment. It's been my dream since I was a small child so I figure I have to give it my all and actually try. I am currently in business school and to put it nicely I feel as if I am taking my hard earned money and throwing it out in the road. I know WAY to many MBA's, financial officers, bankers etc who are sitting at home because they can't find a job. Lots of lawyers in that boat as well. One thing's for sure, people aren't ever going to stop getting sick, or dying (my other interest is in the medical examiner area). So I shouldn't have a shortage of 'clients'. Medicine has lots of problems. It's expensive to get the education, malpractice is a HUGE worry particularly for specialists, but it has a few things going for it. I get to live my dream and help people, and I'll never have to worry about job shortage well unless I am a horrible doctor. That would be bad lol.

[Peeps]

Total agreement on the business degree thing. I always figured my MBA was just a way to say "hey, I can hang in there for some really drab topics, therefore I'll be able to stay awake through all your horrible meetings."

On a side note, and purely along the lines of middle-of-the-night opinion, I'm just astounded that so many people have jumped on the idea of getting an MBA, especially those who have recently found themselves sans job. It's not like it's any better out there for MBAs. With the banking/real estate meltdown, there are tons of MBAs scrounging for jobs. It's crazy. (Sorry, if you're just getting your MBA and are reading this with displeasure... but really, it DOES seem nuts right now... the power of an advanced degree can be diluted, unfortunately. Just ask a NASA Engineer) Ugh, don't send me hate mail. Now, tattoo removal: I'll place my bet on it as a big growth industry for the next 20-40 years! When you think about it, it really doesn't speak all that well for us as a nation.

[pavlikclan]

Yeah I do not have my MBA I am still currently working on my Bachelors. When I switch schools I will go Biology/Pre-Med.... I am guessing with med school about a year and half out at least. Lots of people definitely going into those fancy doctor jobs. Plastic surgery and such.....holds no interest for me at all. I am not a materialistic person. I could walk away from my house tomorrow and not give 2 ......well you can finish that sentence. Not into flashy cars, hell I don't even own a flatscreen tv lol. Money and things mean nothing to me....I've been poor my whole life and will probably be a 'poor' doctor as well

[papie]

You've lost one house in bankruptcy.

You're about to lose another.

You're majorly worried about following a childhood dream of being a doctor and care nothing about taking $200k in debt.

This is NOT a personal attack, I just think you need to take this one step at a time. That $200k in student loans won't be dischargable in a bankruptcy. When you get them, you got them for life.

[pavlikclan]

Yes I realize all that. Thank you though. Most people don't know a whole lot of the ins and outs of the student loan industry..........for life only if you let them be. It is very dependent on a lot of things........if I go to med school and become a doctor will mine be for life more than likely yes. If I go to school get a job in the public sector apply for their fancy new IBR program I can pay on those loans at a very low rate for ten years.......default and the government makes them go away. Not that I have any plans to do that. A person working in the private sector can do the very same thing under the IBR program after 25 years but they will probably have to pay taxes on the difference where their public sector counter parts will not. This can all be found online.

As far as my house goes........I will lose it this time ONLY if I OPT to let it go. I don't have to. I will have the money to repay what we are behind prior to filing for the bk. I am not upside down in the property I would assume it still has some equity in it. I think value has gone down something like 3% in our area the last we were told. When we purchased the property it had equity in it and that was in 06. This property had never had a late payment on it until this year when my husband lost two jobs in business management. Company closure. We make enough money to maintain the payment after bk if we choose to keep it. However, maintaining the property itself..............ugghh not for me. Foundation, siding, windows, wiring, and that's the short list. I am not now nor have I ever been into the whole American home ownership dream. I told my husband when we purchased this property we weren't ready. As far as losing the first house. It was never 'mine' to begin with. I married into it 70k in mortgages on a house worth 30k and he who at 25 had approximately 130k in debt 70k secured the rest unsecured. I brought to the bankruptcy approximately 600 dollars in cc debt. However, we were young and it was my understanding at that time if he filed I had to file as well. I was only 23 I had NO idea what I was doing.

One thing I know for sure.....I can spend 100 k going to school to finish my MBA and struggle to find a job for God only knows how many years to come. I can spend 50-100 more than that (saying I have to fund it all in loans which will never happen, I have not taken into account grants, scholarships which I do receive) and be basically certain to have a career for as long as I wish to practice. A career that initially no won't make me a lot of money, but at least I won't be sitting on a mountain of student loans with no job, or a job that I hate for the rest of my life.

[pavlikclan]

Yeah that is basically only a WORST case scenario. I could come out of this in a year and a half with a Biology degree go into teaching or research and end up with only 50k in student loans IF that. That would be a very high estimate as of right now I have only 30 ish as a Junior in college. I could finish the Bio Degree decide I don't want to spend 4 more years in school and 3-6 more in residency and go into Physicians Assistant program and come out with the same amount I would as an MBA and NOT have to worry about getting a job. Not going to college is not a viable option these days. While it is my GOAL to go into a med school program, I have left myself with plenty of other less expensive, less time demanding options as well The only option I REFUSE to accept is not going to college which will in fact ensure that my life is filled with more of the same.