Extremely interesting dillemma regarding retirement plans and Ch. 13. [taxable gross income] [tax sheltered annuity]

We are definitely filing Ch. 13 in 6-8 months (holding off until we get sued by the creditors). We are current on everything but that will change in 2 weeks. My wife and I just started a Tax Sheltered Annuity (503b) which is exempt from creditors. My wife and I are taking out $500 each ($1k total) month and putting it in retirement. This will start at the end of April. This reduces are taxable gross income, which reduces are payment to creditors. I just asked my lawyer if this was ok and he said it should not be a problem. However, he came back and told me that I should contribute more as the max is $16,500/year. If my wife and I contribute more every month to the TSA (tax sheltered annuity), my disposable income would work out to 0. He said to do it. Does this seem right? I asked him if the trustee would have a problem with this and he said that if he/she did, it would be because the creditors would object to it. I don't think I have anything to lose. Does this seem feasable?

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Reply:
Why wait till you get sued? That makes no sense. Not only would you have judgments to deal with, but bankruptcy as well. Your credit report could possibly be worse then if it just has a bankruptcy on it.

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Reply:Sorry, I should clarify that I will file right before I get sued. I want to save as much money as I can by not paying the minimum payments before I file for ch. 13. When I start getting a summons, I will file immediately.

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