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Disclaimer: I am not a lawyer. I am
only publishing my interpretation of my situation. You should seek your
own legal representation for your own particular
situation. Do not rely on my
opinions or statements for your own purposes as state
and local law varies as do individual circumstances.
Use LegalMatch to Find a Local Trustworthy Lawyer in Your Area.
I met with my lawyer today about my upcoming deposition
from the Small Claims Court case and possibly filing
Chapter 13 bankruptcy. The meeting was very nice, but
there was very little good news to come from it. I did,
however, get a little information that might come in
handy. For instance, my lawyer gave me a list of IRS
national standards for allowable living expenses for all
bankruptcy cases filed after March 17, 2008. Let me run
through some of the numbers for you. You might find them
as enlightening as I did.
Let's take monthly
allowable living expenses for food. For one person, the
IRS says food should be limited to $277; $538 for two
people; $626 for three people and $752 for four people.
For rent or mortgage payments in Escambia County,
Florida, the IRS lists $605 as the allowable amount for
one person; $711 for two people; $749 for three people
and $835 for four people. All of these figures and a lot
of other stipulations are listed and used when
completing bankruptcy forms. When you file bankruptcy,
you better already be used to living by these standards
as they will be enforced upon you apparently. |
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After taking
into these considerations and reviewing my debts and assets, my
lawyer and I figured that I would have to make payments of about
half of my currently monthly take-home pay. Plus, I would have
to do this for the next five years as that is how long Chapter
13 bankruptcy takes. Sure, at the end of those five years, any
of your non-exempt unpaid debt is written-off; but who wants to
live under the IRS allowable standards for five years? It would
make more sense for me to quit my job. There is no way that I am
going to continue working and traveling as hard as I do and live
off of IRS allowable standards. Bankruptcy is just not for me.
Let me pass along some of
the other interesting facts that I picked up today:
• Cost
It will cost me about $3,279 to file for Chapter 13 bankruptcy
here in Escambia County, FL (the courts just recently upped
their rates).
• Time
It takes about 90 days to process a Chapter 13 bankruptcy. That
is the time from filing the papers until it gets in front of a
judge. Then the 5 years of payments kick in.
• Cancellation
A Chapter 13 bankruptcy can be cancelled or converted to a
Chapter 7 bankruptcy. This is kind of tempting because I could
theoretically file for Chapter 13 and, if at the court hearing
when the judge tells me how much I would have to pay, I could
accept the payment schedule or withdraw my bankruptcy filing (I
probably would not convert it to a Chapter 7 bankruptcy and
might not even be allowed to convert it given my wage income).
• Leases
While leased property is not included in bankruptcy filings
necessarily, the amounts paid for leased property like an
apartment or a car are taken into consideration and compared to
the IRS national standards for allowable living expenses. A
judge could tell me that I am paying too much for my car
(currently at $575 a month which is over the $489 national
standard) or that the apartment I am leasing is too much (My
$1,300 a month leased condo is well over the $605 national
standard).
All of this is just
reinforcement that I am not going to file for bankruptcy. It
would make no sense for me to continue working and give over
half of my income as payments on property that I do not get to
keep (all of the four real estate properties that I have would
go back in foreclosure in a bankruptcy, but I would then have to
pay the deficiency judgments as the houses will not sell for
what I bought them).
It is a sad situation,
but it does just go to show us all that bankruptcy is absolutely
a last resort. If I change my mind or get forced into it (as you
can be forced into bankruptcy by creditors), I will let you
know. Until then, I am back to liquidating assets to pay
bills... that and garnishment (with garnishment, they can only
garnish up to 25% of your gross wages minus taxes).
Disclaimer: I am not a lawyer. I am
only publishing my interpretation of my situation. You should seek your
own legal representation for your own particular
situation. Do not rely on my
opinions or statements for your own purposes as state
and local law varies as do individual circumstances.
Use LegalMatch to Find a Local Trustworthy Lawyer in Your Area.
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