Are you asking if your Bankruptcy petition will be dismissed because you bought 4 cars recently? If so, do you still have all 4 cars?
In addition to the above, is there anything else that you would like to know?
There is no law that says consumers cannot buy what they want, as long as they had the intention - at the time of purchase - of paying the loans for the cars.
If you do file a Bankruptcy, whether or not you would be able to keep the cars would depend on what they are worth (Kelly Blue Book) when you file, and the balance on the car loans.
If it were determined that the cars were purchased with the intention of not paying the car loans, the car loans would not be dischargeable, but the other debts would be, and the Bankruptcy would proceed (it would not be dismissed because you purchased 4 cars with the intention of paying for them).
I think this is what you wanted to know. If not, please let me know.
There are no criminal charges involved with what you have described. If people could be charged criminally because of what you did (overextending credit-wise), over half the country would be in jail.
The main question - I think - is whether you would be able to keep the cars if you file a Bankruptcy. The answer is you are allowed to keep any assets - including cars - that have little or no equity (usually the case with new cars), and one motor vehicle with up to $1,000 in equity. Florida Stat. 222.25.
If a debtor fails the "Means Test", he cannot file a Chapter 7 Bankruptcy. The Means Test only takes into account the Household Size, Total Household Gross Income, and the source of that income. Most expenses are not taken into account, except for medical expenses.
1) What is your household size?
2) What is the source of your income, and how much comes from each source?
Does the other person in your household have an income? If so, how much?
The Means Test income level for a household of 2 is $49,320, so you would be able to file a Chapter 7.
You should call the Florida Bar Association for a recommendation for a Bankruptcy attorney. The number is (850)(NNN) NNN-NNNN
Did you buy your rental houses while you were on active duty?
Do you have substantial medical expenses?
Is your USPS retirement Social Security, or are you covered by the old plan?
Can your son be considered to be part of your household?
Then are there 3 in your household - you, your wife, and your son? (If your son is away for school, he can still be part of your household.)
You said as of March 2011 your net income from the rental properties would be negative $1300. What is the net rental income now?
The Means Test is based on the average gross income for the 6 months before filing. You will not pass the Means Test with the additional income from the rental properties. You have to wait until March 2011 to file.
It is actually a good idea to stop making the payments, because the more you pay, the higher the equity will be. Also, the court will be more likely to see that you cannot afford the payments. However, in general, stopping the payments before you have to will not affect your Bankruptcy petition.
Thank you for accepting my answer, and for the bonus! And Merry Christimas to you also!
You are correct. You have to wait until the average gross monthly income (net gross* for the rental) for the 6 months prior to filing is less than the yearly figure. That means taking the average monthly income for the 6 months prior to filing, and multiplying it by 12, and it also means waiting until 5 or 6 months after March 2011.
*Net gross is the the rent roll minus expenses.
You do not justify to the court why you stopped the payments - doing so is your prerogative. It really does not matter if you stop now or if you stop in March. You already know that the homes will foreclose. But since the foreclosure process can easily take years, you can file a Bankruptcy before this happens.
Whether or not you stop paying for the cars, however, depends on whether or not you want to keep them.
Yes - the Bankruptcy court does not care about when you stop making the payments. As a matter of fact, if you pay more than a certain amount to any creditor before filing the Bankruptcy, the Bankruptcy trustee can order the creditor to give the money back - to the Trustee.
Foreclosures took around 6 months at one time. Now they are taking years, because the banks are processing so many.
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