pre-filing jitters

[FishHead]

Just when I think I am going in the right direction something else pops up and makes me wonder if I am.

A little background: I was sued a little over 3 years ago for cc debt and when I told them I was looking at bk and got a continuance they dropped the suit until now. I went back to school a few years ago for a new trade and to try and get myself out of this rut and just before I get done I have to have another pretty serious operation that has made it nearly impossible to do the work full time. Anyway, last month I was supposed to be in court for this cc again and was in hospital so I was able to get a new date of march 17th. I have called and made an offer to them and now cant get the to answer me back but figure is an answer itself.

I have been looking hard at bk with reading on here a bunch and even ordered the nolo book for ch7 bk which should be here this week sometime. I have about $10k in debt and haven't worked in about 5 months with about $500 saved for filing cost.

The only assets I have, a couple cars that are paid for, tools and misc. I believe I can keep them within the TN exemptions. My main concern is to not be any more of a burden than I already feel I am to the wife. Her job pays for most everything and when I was searching on filing with only one spouse it looks more like it will make it more difficult to file pro-se. I really cant afford a lawyer without selling Items to do work with.

So I guess for now my biggest question is am I biting of more than I can chew trying to file married and separate? if I have to include her income it would have me fail the means test.

Guess that's enough for now before I make this a book. Thanks in advance.

[AngelinaCat]

Hi FishHead, welcome to the Forum!

I broke your post into paragraphs in order to make it easier to read. First of all, you are doing well by reading here and getting the latest NOLO book. Educating yourself is your best defense.

You do not say where you are living. Are you renting? Or do you have a mortgage on a home? You imply that your health is bad, and that you are not able to work full time. Are the credit cards in your name only, or are they joint? Do you have any student loans? A few more details about your situation will help the membership formulate suggestions for you.

I can tell you that even if you file alone, you will have to disclose your wife's income, because her income appears to be what is running the household. Does she have debt that she would like to discharge? I understand that you want to leave her out of this as much as is possible.

Now with this last said--you may consider this question impertinent--but how is your relationship with you wife, and how well do you communicate about financial matters? I ask because I do care. When my husband and I were considering marriage, in order to be married in my church, we had to attend a weekend of pre-marital counseling. Almost every single session dealt with financial matters, and how the couple handles them. It is NOT infidelity, or any of the other usual suspects, that makes or breaks a couple, but how that couple handles MONEY matters. "Hub and I certainly aren't perfect, and filed BK ourselves, but we have been together going on twenty-eight years....

My very best wishes go out to you and your wife.~~~

[FishHead]

Thanks for breaking it up for me, I have been known to ramble.

I live in TN and we have a house but it has always been in the wife's and her sisters name. They have wanted me to be on the mortgage but we never seen a benefit to it with my circumstances. We are in the final stages of refinancing which will drop our payments considerably but quicken loans did pull my credit because of being a spouse and I believe the creditor may think there is something there to be had.

The only assets I have in my name are a couple cars that are paid for, tools and misc.

We have worked towards fixing her credit the last few years to do the refinancing and there is no need to include her in a bk and may hurt her at work if she did. This debt is from a few cc that I had before we married and got out of hand when I had my first operation about 11 years ago. One way or the other I will deal with this debt as my own.

I have read a few different things about the spouses income in bk filing separate and it is a bit vague and confusing. It would be simple to disclose her income but will they require detail in spending of her income?

As for the marriage and relationship part, our faith is very strong. We did the church counseling after we got married and it helped a lot. She doesn't make me feel like a burden I just strive not to be. We have been married 12 years last Nov. and it is stronger today than it was then.

[keepmine]

While her income is considered, her expenses are part of the equation as well. If she is paying the majority of the bills, it's doubtful she has enough disposable income to fund a chapter 13.

[FishHead]

That doesn't sound good. I guess I was thinking since TN wasn't a community state that she wouldn't have to be involved. I have been reading in the nolo book and this is all pretty scary, especially what the trustee is able to do. I know she is a big part of my life but just trying not to mess things up when filing and make things that much more stressful. I suppose I will try and start trying to find a lawyer for consultation and within what I can afford.

If I and file my exemptions just let them get a judgment, what would be the chances of them trying to mess with other items in the house or her and the house?

[keepmine]

None of us can speak for what a judgment creditor may or may not do.
At a minimum, you two should have no joint bank accounts. They may call you in for a debtors exam where hey force you to answer questions about your finances. If you're not on the ded to the house, they ought not to be able to touch it or any other property she owns solely in her name.

Many bk lawyers will give a free or low cost initial consultation. Speak with a couple-ask some questions and it may clear things up. There fees may also be more reasonable than you think.

[AngelinaCat]

If I and file my exemptions just let them get a judgment, what would be the chances of them trying to mess with other items in the house or her and the house?

You really want to avoid having a judgment on your record. While you may be 'collection-proof' right now, you may eventually get into a position where you would like to buy a new(er) car, or home. As long as the Judgment is in place, you will never be able to own anything in your own name, without risking that the creditor may go after it. In some states--Florida being one, a judgment is on your name for ten (10) years, and it can be renewed for another ten year period. Plus it costs $$$ to go to the civil court and have the judgment vacated.

I would also make sure that neither you or your wife are not 'authorized' users on each other's credit cards.

[LadyInTheRed]

I have been reading in the nolo book and this is all pretty scary, especially what the trustee is able to do.

What is it that you find scary? If you are more specific, we may be able to make it less scary.

If you don't have any joint debts, the only way your wife will be affected by your BK is that if you have to file a Chap 13, the household income will be reduced by whatever plan payment you have to make. Whether you file a Chap 7 or Chap 13, in the end, the BK should relieve whatever financial pressure on the household your current debt is causing.

Definitely consult with 2 or 3 attorneys before you make any decisions.

[FishHead]

Ok, 1st this is a small town and the newly elected judge and I have crossed paths when I wrote bail bonds several years ago and he was a lawyer in town. My ex-boss and him were friends and at lunch one time he got pretty pissed at me because I didn't agree with him or more so was totally against the incumbent mayor that was running who won and was indicted, convicted of corruption and removed from office. I don't think he really liked me before but after the discussion in a public restaurant I am pretty sure he was done with me. Maybe I am just being paranoid but I do believe the guy is crooked and if I am right and it seems he still holds a grudge, then I will ask that he remove himself. Judges just have way to much power.

2nd, the part about the trustee having an incentive to find properties to sell for a percentage is pretty intimidating to me. The fear of the unknown is a tuffy for me and just how someone can manipulate what's what or whose is whose is fearful to me. For instance, last time they sued and the dropped, I had a vehicle as the main co signer but the wife paid for it totally. About a year ago she took a loan out from her 401k and paid it off which we traded in last summer to get her a smaller vehicle and is now only in her name. I am hearing that they look at the past 6 months but they can also request a few years of taxes and other documents?

I realize I have been trying to control all this and as of yesterday I have turned it over to God. It has been a rough month or so with the surgery and I am totally off the pain killers as of 3 days ago, which I have had a bit of withdrawals and not sleeping real good but I am a lot better than I was. I made an appointment with my first atty this afternoon and we'll see where it goes.

[LadyInTheRed]

It doesn't sound like the judge you are talking about is a bankruptcy judge. Bankruptcy judges are federal judges who are appointed, not publically elected. If he is not a bankruptcy judge and not your creditor, he will have nothing to do with your case. He will probably never even know about it.

There really is no unknown in bankruptcy. You know your financial situation and history. You know what your assets are and your attorney will tell you what you can exempt. You should know before you file whether you have assets that the trustee can take. If you file a Chap 13, the trustee will not take any assets. The trustee can look back as far as he wants to find assets that you may be trying to hide (I don't mean to imply that you are hiding any). He will only go fishing if he believes you are hiding something. I doubt what you describe regarding the car will be an issue. Ask your attorney about that issue and anything else you may be worried about. I bet the attorney will help calm you.

Your concerns are very common among people just learning about the bankruptcy process. As you become more educated, I bet you will worry a lot less.

I hope the meeting with the attorney goes well.

[AngelinaCat]

I was working on a reply, but was interrupted before I could finish. However, LITR said about what I was going to--only better!

Usually, the look-back period is six months from the date you file. You will be asked for 6 months of pay stubs--or pay advices--if you have electronic deposit. And usually you will be asked for the last two income tax returns. Your attorney will go over all of this with you. There is nothing that I have read that would make me think the trustee would go any further back.

I am pleased you are feeling better after the surgery and are on the mend.

[FishHead]

Well that went well, she did answer most questions and showed me that even with only my wife's income I wouldn't pass the means test for Ch. 7. We are finalizing the refinancing Saturday which will drop our payment in almost half and the wife got a raise not long ago. I am mostly ok with them getting a judgment as long as it doesn't make it terrible on the wife.

She did say that there was no exemptions for judgments and on my summons it has a notice of the $10k personal exemption. I will try and go to the court clerks office and ask some questions but the only thing I have really worth selling is my truck and I will probably just gift it to the wife. Thanks for being here ya'll. I don't say a lot online at all but this has been very helpful.

[AngelinaCat]

While you seem relatively satisfied with this attorney's answers, DO NOT settle on the first one you see and interview. Remember, YOU are doing the hiring, not them.

'Hub and I made that mistake, because our first contact seemed sympathetic and all that, but at the end of the day we ended up trying to fire her because she did not educate us well in the BK process, and we ended up paying far more than we should have.

Though we were Discharged in August 2008 and finally Closed November 2010--we were an Asset Chapter 7 Case--we stay here to help people like you. Schedule at least two other consults with different BK attorneys in different firms, and let us know how it goes.

Read more on this forum about how to interview attorneys in the initial visits.

[FishHead]

in the TN means test of the nolo it shows an allowable income of $28046 for 6 months with 3 in a house hold and with just the wife we have $33k. I cant do a Ch. 13 and make payments right now nor offer the creditor a payment plan to stop the court case at this time. I don't see an alternative, am I missing something? I'm not done asking questions, but I am done worrying about it. What ever happens, happens.

Oh, and I got the 1st 8+ hours sleep last night in several days.

[LadyInTheRed]

I am glad you got some sleep. Your health is what is most important!

The median income test is only the first part of the means test. If your income is below median, you pass the means test. If your income is above median, you have to complete the rest of the means test which goes on to deduct allowed expenses from your income to determine whether you have enough disposable income to fund a Chap 13. Did the attorney you met with run the entire means test, or did she look only at income? If she did not run the means test, try this online means test: http://www.legalconsumer.com/bankruptcy/means-test/

If you don't pass the means test, then you need to look at why you can't afford a Chap 13 payment. Was your household income higher in the last 6 months than it is now? If so, you may need to wait to file until your 6-month income has sufficiently dropped. While there are some other situations where a debtor who doesn't pass the means test truly can't propose a feasible Chap 13 plan (paying on a 401k loan or non-dischargeable tax debt or child support arrears, for example), usually "I can't afford a plan payment" comes from a desire to keep assets the debtor can't afford or a refusal to cut spending. A Chap 13 is supposed to be livable, but it usually also requires some adjustment to your budget.