Not Paying Bills & Excess Money

[nioka]

There is a similar posted question from another member but I didn't want to hijack their thread.

I am waiting for foreclosure to file chapter 7. I have now caught up with the needs I had neglected before stopping payments to my creditors.

My income is SS and pension. Without paying mortgage, CC's, and HOA fees I will be accumulating money. Depending on when I am foreclosed upon I will have difficulty in listing my monthly costs and my bank balance at the time I file.

How would I list my monthly living costs if I am not paying the bills?

In Tennessee the exemption is $10k. I have a car that will account for about $4500. The way I understand it I can have the balance in a bank account as I have no other exemptions. I do not have any assets.

Currently I would have an almost "0" balance after I pay my attorney. However as months go by I will be accumulating money. How do I explain I am not paying my bills to a trustee when I have he money to do so?

I have been told to spend the money but that is just not realistic for me.

[keepmine]

You don't need to explain anything. You are allowed a $10K exemption in your state. That's a legal right that you have and nothing wrong with electing to use it.

[nioka]

Keepmine,

Thanks for the post.

One thing that troubles me is how to fill out a monthly expense sheet when I am not paying the bills.

[kjrmom911]

When you say you are not paying the bills I am guessing you mean your mortgage, credit cards and such. You are paying for utilities and such yes? And you will have to find a place to live when your foreclosure is complete so that will be an expense as well. Rent, Food, gas, car maint, insurance, utilities, clothing, medical, are all legitimate expenses. Do you have an attorney?

[Pjmax]

Keepmine,

Thanks for the post.

One thing that troubles me is how to fill out a monthly expense sheet when I am not paying the bills.

Probably, when you get closer to filing, after your foreclosure; you will have a new place and rent, and the expenses that go with that.

Do you have any idea how fast or slow the foreclosures are happening in your condo complex, or your area in general? You could be years away from foreclosure, or even if it's 6 mos. to a year, a lot can happen in the meantime. It's good to be prepared, but maybe worrying about some details now, may not be such a healthy thing.

[Blossoms]

Probably, when you get closer to filing, after your foreclosure; you will have a new place and rent, and the expenses that go with that.

Do you have any idea how fast or slow the foreclosures are happening in your condo complex, or your area in general? You could be years away from foreclosure, or even if it's 6 mos. to a year, a lot can happen in the meantime. It's good to be prepared, but maybe worrying about some details now, may not be such a healthy thing.

Right. My mother's house here in Ohio is in foreclosure. She hasn't made a mortgage payment in 3 years, but is still living in the house. The county she lives in has an enormous backlog of foreclosures going through county court.

[TXskyblue]

I have been told to spend the money but that is just not realistic for me.

If you have more money than your exemption can cover, you NEED to spend it or else the trustee can take it.

You can convert it into exempt categories. If nothing else, you can fund an IRA for $5,500 and it will be exempt I believe. Certainly better than giving it to the trustee.

[nioka]

My case may differ from many as I get Social Security and while it is not a large income without paying mortgage, CC's, and HOA fees it will start accumulating quickly as the months roll by.

Secondly, I am in an HOA and I want to hold out until the HOA or bank forecloses.

When I hear that people are in their homes for years before foreclosure I wonder what they did with their funds.

I am paying the utilities, electric and water, but that is it.

I believe the $10K exemption here in TN also includes my car.

I will have to look into that IRA.

I am hoping for a quick foreclosure possibly pushed by the HOA. However, I am in an upside down mortgage, no assets, and have protected income therefore I don't expect the HOA to move too quickly either.

I also intend to move 2500 miles when my bk is complete and renting a place in advance is not practical either.

[tobee43]

we were in the EXACT situation as you. our atty listed our old expenses, i thought i very bold move. of course the trustee's office questioned our petition. the trustees office insisted, making perfectly good sense, well you client cannot list their mortgage and other debt as they will no longer have it. good point i thought. our firms office is or was well they wouldn't be filing bk if they didn't have then so you have to count the mortgage and other debt. i was just waiting for their answer which was...well ok i get it. and so it went. we also had a exempt pension (remember ALL pensions are not created equally) SS and EI at the time. all exempt income where we filed. that in itself i'm certain had much to do with the trustee's position on our case.

[keepmine]

My case may differ from many as I get Social Security and while it is not a large income without paying mortgage, CC's, and HOA fees it will start accumulating quickly as the months roll by.

Secondly, I am in an HOA and I want to hold out until the HOA or bank forecloses.

When I hear that people are in their homes for years before foreclosure I wonder what they did with their funds.

I am paying the utilities, electric and water, but that is it.

I believe the $10K exemption here in TN also includes my car.

I will have to look into that IRA.

I am hoping for a quick foreclosure possibly pushed by the HOA. However, I am in an upside down mortgage, no assets, and have protected income therefore I don't expect the HOA to move too quickly either.

I also intend to move 2500 miles when my bk is complete and renting a place in advance is not practical either.

Are you not buying food, gas for your car, auto insurance, clothes. Oil changes and other maintence.?Didn't you say in a previous post you need dental work? What about medications and doctors copays. Things like haircuts and movies. If you're not spending money, you ain't trying!

[nioka]

keepmine,

You are correct. By not paying my mortgage, CC's, and HOA fees in December and January I was able to catch up with my needs. Feb will pay for my attorney. For me the combination of mortgage, CC's, and HOA make up the largest portion of my expenses. Now that I have caught up on my needs I can't imagine what I would spent that excess money for and that was the post topic.

I cannot imagine how people go years without making mortgage payments and not having excessive money.

The Bank Currier I spoke with told me some people she knew went years with no mortgage payment and saved enough to buy
a MH with the cash they saved.

As most people who stop paying their mortgage also stop paying CC's making them subject to collections. Bank accounts are not normally protected from collections.
I have Social Security that is protected for up to two months of SS benefits.
How do people keep from losing their money to collections?

[AngelinaCat]

You can also use your money to buy storable goods for emergencies, etc. Have on hand at least 7 days worth of food, water, toiltries, blankets, gas/charcoal for cooking, etc., in case you get blessed with the type of weather that Atlanta had last week.

BTW, where in Tennessee might you be? BIL is in Morristown, and has a 1 year's supply of food and amenities. I realize that this is not practical for you since you are surrendering you home, but it gives you some food for thought.

[LadyInTheRed]

How do people keep from losing their money to collections?

As soon as a creditor gets close to a judgement, they take it out of the bank.

[AngelinaCat]

This is a good time to ask:

Lady, do you know a way that people can keep their wages from being garnished at the job site, even if they have been proactive in removing their funds from the bank?

Thanks!

[LadyInTheRed]

This is a good time to ask:

Lady, do you know a way that people can keep their wages from being garnished at the job site, even if they have been proactive in removing their funds from the bank?

Thanks!

There are limits under federal law as to how much can be garnished.

lesser of 25 percent of disposable earnings or the amount by which disposable earnings are greater than 30 times the federal minimum hourly wage prescribed by Section 6(a) (1) of the Fair Labor Standards Act of 1938.

The limits are different for childsupport and taxes. For more info on the federal law see http://www.dol.gov/compliance/guide/...icPro#BasicPro

Some states have laws further limiting what can be garnished.

Other than cliaming the exemptions for which you are elgible, I am unaware of any way to avoid it wage garnishment if state law allows it.

Nolo has a good information on garnshiment, including links to each state's garnishment laws: http://www.nolo.com/legal-encycloped...rnishment.html