Does it ever make sense to quit working?

[frogger]

Does it make sense? It might. Never rule out any possibility.

Make the best business decision for you and your family.

[backtoschool]

I was laid off in January of last year from a high income job, and did not look for another job. I filed chapter 7 after waiting six months for my income to drop off of my lookback period. In your case since the job is a part time job, I really don't see a problem with quitting it.

I stopped paying on a few credit cards a year before filing, some six months before filing, and a few 3 months before filing.

I applied to graduate school and made plans to become a full time student

I collected unemployment insurance until my graduate fellowship began in September. The unemployment insurance counted as income on both my means test and my schedule.

I was discharged of all debt but my student loans last week.

[jdcat]

I'd say that's actually not a long time to go without paying. It was 8 months after I stopped paying before I received a summons. I really think you'll be ok if you are planning on filing in Feb/Mar.

I agree with you, but am not willing to take the chance that we would be one of the "lucky" few that get sued right away. I know the likelyhood is probably slim but these jitters are hard to overcome. I'm sure so many of the people here know what I mean. That first step has got to be a doozy.

[adviceplease]

Sorry I did not fully read all of the replies but do you have kids? If you do maybe you can go around town if they need daycare and find the most expensive ones and say you had to quit because you had very little of your check left after paying a new daycare and had to stay home. Or that the kid(s) are having problems and need a parent home, or that your job is causing you emotional distress.

[hindsight]

Doesn't cost a penny to consult with an attorney. Unless you know already who you are going to use? I talked with a few. I thought these guy/gal is smart we'll go with them, duh and NO we are not. Find your attorney now and pay when you are ready. But pick smart!

[BobMango]

Thank you hindsight.

I wish we could retain an attorney now. I'm worried about stopping cc payments in December without the advice of an attorney beforehand. December through Feb/March is a long time to go without making cc payments and not having the support of an attorney.

I'd say that's actually not a long time to go without paying. It was 8 months after I stopped paying before I received a summons. I really think you'll be ok if you are planning on filing in Feb/Mar.

[jdcat]

Thank you hindsight.

I wish we could retain an attorney now. I'm worried about stopping cc payments in December without the advice of an attorney beforehand. December through Feb/March is a long time to go without making cc payments and not having the support of an attorney.

[hindsight]

I would make an appointment for a good bk attorney. Probably a couple. If they are good they will give good advice for the future and planning for your bk. And between now and then you will have more questions......

[jdcat]

Thank you for answering my questions justbroke.


If we do stop paying our cc's in December then that would give us an extra $500 a month to live on. That sounds like alot but when it gets broken down weekly and by what's needed it's really not a whole lot because we have been living way under the allowable amounts by far. Then when we file in March and we claim the allowable expenses, not all of them mind you, we would then sort of even out when it comes to DMI.

Once again justbroke, thank you! I have alot to think about and some figuring to do.

[justbroke]

But would that apply if we would be filing chapter 7? As for paying for attorney/court costs we'll be using our tax return in Feb/March.

In a Chapter 7, they usually don't care that your disposable income is negative, unless you're reaffirming debt. In Chapter 7, you're generally shaving off a bunch of debt, so the disposable income doesn't mean anything accept for the purposes of pushing you to a Chapter 13 if it's over $109- $182.50 a month.

[jdcat]

Here's the downside... your Plan may actually be infeasible if you're at a significant negative amount. Making it worse, some Districts require a minimum dividend to the unsecured creditors (a few of them require no less than 10%).

Since you're way negative, something has to give... understand? While you could get a Plan confirmed with a negative DMI in the thousands... the question would be, just how will you live? This brings up the point of whether your plan is feasible. You must be able to pay the Trustee fees, your Attorney fees, and any debt service (on secured and priority debt) in your Plan... and have enough to live on. If your DMI (disposable monthly income) is going to be (negative) -$2000, then there's a problem with feasibility.

But would that apply if we would be filing chapter 7? As for paying for attorney/court costs we'll be using our tax return in Feb/March.

[justbroke]

Thank you justbroke! I think it all just clicked for me. The allowable expenses apply to our situation after bk also, so when the trustee is looking at our future income those standards still apply? Correct? So if I filled out all of the info for the means test and came out as -$1600 a month (which I did on the nolo site, we live in a Chicago suburb so the allowable expenses are kind of high) then that is what the trustee will look at when considering our future income? So quitting my job would actually put us even more in the negative which is obviously overkill.

Yes and yes.

These allowable expenses are set in place to allow people to still bring in a reasonable income *and* seek relief from debt? So we are ok if I keep working?

They are put in place so that everyone is compared equally. So the person who makes $200K a year gets the same treatment as the person just making over the median income for their State. A level playing field, so to speak.

Here's the downside... your Plan may actually be infeasible if you're at a significant negative amount. Making it worse, some Districts require a minimum dividend to the unsecured creditors (a few of them require no less than 10%).

Since you're way negative, something has to give... understand? While you could get a Plan confirmed with a negative DMI in the thousands... the question would be, just how will you live? This brings up the point of whether your plan is feasible. You must be able to pay the Trustee fees, your Attorney fees, and any debt service (on secured and priority debt) in your Plan... and have enough to live on. If your DMI (disposable monthly income) is going to be (negative) -$2000, then there's a problem with feasibility.

[jdcat]

Thank you justbroke! I think it all just clicked for me. The allowable expenses apply to our situation after bk also, so when the trustee is looking at our future income those standards still apply? Correct? So if I filled out all of the info for the means test and came out as -$1600 a month (which I did on the nolo site, we live in a Chicago suburb so the allowable expenses are kind of high) then that is what the trustee will look at when considering our future income? So quitting my job would actually put us even more in the negative which is obviously overkill.

These allowable expenses are set in place to allow people to still bring in a reasonable income *and* seek relief from debt? So we are ok if I keep working?

[justbroke]

I don't understand all of this because these allowable expenses that we could claim will not show up anywhere on our bank statements or anything. We haven't been using them so how can we claim them when there is proof that we haven't been living by those standards?

They are allowances. You get the full amount. You don't have to prove it. The only time you need to provide proof, is when you exceed an IRS Allowance, and only when exceeding is allowed.

For example, there is an expense category for Non-Mortgage/Non-Rent expense. That expense category covers utilities (gas, electric, water) and basic phone service. If your utility expense exceeds the category (as mine does/did), then there's another line where you can claim Excess Energy Costs! However, you must provide bills/receipts to prove that amount you claim over the "allowance".

[jdcat]

Hi Bob-

See, that's something I don't understand. If we claim allowable expenses that we cannot afford and our DMI then comes out in the negative (-$200 a month or more for us) would that then protect my income?

I don't understand all of this because these allowable expenses that we could claim will not show up anywhere on our bank statements or anything. We haven't been using them so how can we claim them when there is proof that we haven't been living by those standards?

If claiming them would protect my income though I'm all for it.

Thanks for your reply.