Jump to content

Newbie - Q's about BK in CT


Recommended Posts

Hello All,

I'm sinking fast and considering filing BK. I am in CT and did some research on the Means Tests, etc. My problem is that my income is BELOW the threshold for Ch.7 (which is good), but when I do the second part of the application of means, stated as "If the income available for debt repayment over that 5-year period is $10,000 or more, then Chapter 13 will be required" my income is too large to qualify for 7, which puts me in 13.

OK fine. So I do the Statement of Income, Calculation of Commitment Period, & Disposable Income form for CT, to see how much I'd have to pay under 13. BUT, when I complete the form using the IRS Nat'l Standards for Allowable Expenses, etc. I end up with ZERO disposable income (actually -$500 or so) to apply toward my repayment plan.

Ch13 requires that in order to qualify you must have income to put toward repayment.

Does this mean that I actually DO qualify for 7??? Or that I don't qualify for BK at all?

Here are my stats:

Married, one child - dh is not employed

Homeowner, 1 mortgage, approx. $15k in equity

Car owner, 1 car in my name (2 in dh name)(no liens)

Good, steady income - but I have to cover all expenses for my family (health ins., etc.)

Unsecured Debts total $28000. This is a combo of CC and a personal loan from HFC. HFC is the one that has put me over the top. I owe them 15,000 at 20%, and my monthly payment of $272 is literally interest only. The premium has not moved for over a year.

I am not currently behind, but right now I'm late one payment to HFC, my CC's are completely maxed, and I'm having to use any available credit that I open up with a payment for living expenses (groceries, etc.)

My phone has been recently shut for non-payment, and I'm basically robbing Peter to pay Paul every month. You know, it's a snowball effect.

My scores right now are in the low 600's, because of maxed credit, not because of lates or CA's. But, I know that it will be very soon that I can no longer keep up - probably next month - because I'm falling behind and can't get ahead with double payments to make up the difference.

What should I do??? I would be fine filing 13 and repaying some over 3 - 5 years, but it doesn't seem like I qualify. I don't have anything of value to lose to 7 (except my car, which has no lien and is worth around $7k), but it doesn't seem like I qualify for 7 either.

What am I doing wrong?

Any and all help greatly appreciated. Sorry so long.


Link to comment
Share on other sites

Ok, so how much DISPOSABLE INCOME do you have after subtracting ALL your normal living expenses ?? The mortgage and car payment has to be figured in. The IRS standards are not necessarily carved in stone either, they can be appealed if need be. If you're limiting your expenses to JUST what the IRS numbers are, don't, use ACTUAL numbers.

If after all your expenses you have at least $100/mo left over in disposable income, then you would wind up in a Ch 13. If you have less than that, then you very likely qualify for a Ch 7.

Best advice is to talk to a couple of BK lawyers ASAP. They can help answer your questions and get the best calcs on the means test.

Link to comment
Share on other sites

This topic is now closed to further replies.

  • Create New...

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.. For more information, please see our Privacy Policy and Terms of Use.