New to all of this- need some good advice

[wrigley1976]

I am not sure if Ch13 is the best for me.
Here is a quick breakdown of my situation
I owe a home- balance owed is close to $200,000
monthly mortgage- $1600
monthly home equity loan- $350
car payments- 2 cars= $850
credit cards- $10,000

current salary- $50,000

behind on almost every credit card
2 months behind on mortgage
2 months behind on car payments
owe last installment of real estate taxes- about $2700

With the limited info provided- is Ch 13 best? I know it hurts my credit- but my credit pretty much sucks right now

My house phone and cell phone are ringing constantly from creditors

[ssdsco]

Your total CC debt is $10K ? Do you want to keep the home ? How much equity is in the home ? What state have you lived in for the past 2 years ? What's your family size ?

The experts will be able to do a better analysys with this info.

[wrigley1976]

We absolutely want to keep the home, which has little equity.
We have lived in IL for the last 2 years
It is my wife and I and three children

[klux]

Is 50,000 the total income for both yourself and your wife? Do you have daycare expenses? Do you want to keep your vehicles? When were your vehicles purchased, have you ever refinanced them?

[wrigley1976]

$50,000 is the total income
no daycare expenses
we want/need to keep the vehicles
wife's van was purchased about 2.5 years ago
my prius was purchased about 9 months ago

[tofargone]

Sounds a lot like mine. You are probably looking at a 13. I am 10 months into a 60 month plan. You will roll your House arrears in and most likely if you have had your cars for a while cram them down in the plan. Whatever is left in your income will go to the creditors.

A chapter 13 sucks, you have to live in a budget that doesn't account for those emergencies that always seem to come up especially with kids.

My recomendation is make sure you get a good lawyer, it makes all the difference in the world.

Good Luck.

[wrigley1976]

thanks for the input- my wife watches a couple friends babies during the day- it is all paid in cash.
What would happen with that income?

[Flamingo]

thanks for the input- my wife watches a couple friends babies during the day- it is all paid in cash.
What would happen with that income?

It is considered household income and would be required to be reported unless you want to take the chance and not report it to your attorney. When I saw you bring in $50,000 a year for a family your size and saw the amount of the bills you have, I was wondering how you were getting by; with your post above, we now know how you are getting around that. I am sure your attorney will pick that up also so under the circumstances and to avoid future problems, always be honest about your situation with your attorney.

[lrprn]

thanks for the input- my wife watches a couple friends babies during the day- it is all paid in cash. What would happen with that income?

If you two do file Ch 13, you will have to include it as income. (Just curious...does your wife declare the cash she receives for child care as income to the IRS?)

You aren't going to want to hear this, but looking over the figures you shared, you are way overextended on your house. Between the two mortgage loans, you are paying $1600 + $350 = $1950/month. On your $50,000 income, you are paying 46.8% of your income to your house. That is very high for a family of 5. Most financial experts recommend paying no more than 30-40% of your income for housing.

In Illinois for a family of 5, the median income is $82,384 - http://www.usdoj.gov/ust/eo/bapcpa/2...come_table.htm . Your income is significantly below this. Of course, a lawyer has to complete the Means Test, but I have serious doubts you can support a Ch 13 plan that will handle your mortgage and car arrears on your income and still give your creditors what they would receive in a Ch 7 (one of the requirements).

You need to take a cold, hard, emotionless look at your current finances. You are in a deep hole at the moment, and it's your secured debt - primarily the house - that's dragging you under. Ch 13 will help wipe out the current mortgage and car arrears (which is why I assume you are considering filing a 13 rather than a 7), but it isn't going to free up very much income at the end of three years to help with paying for the house in the future.

Something has to give here. You can't keep everything you have and survive financially on what you currently make. Please consider filing Ch 7 and walk away from the house to truly get a fresh start. Think about what is going to be best for your family in the long run.

[SinkingFast]

You aren't going to want to hear this, but looking over the figures you shared, you are way overextended on your house. Between the two mortgage loans, you are paying $1600 + $350 = $1950/month. On your $50,000 income, you are paying 46.8% of your income to your house. That is very high for a family of 5.

Something has to give here. You can't keep everything you have and survive financially on what you currently make. Please consider filing Ch 7 and walk away from the house to truly get a fresh start. Think about what is going to be best for your family in the long run.

Ditto's.

That house owns you and not the other way around.

And with those car payments on top of the mortgages, it's a wonder you haven't run up more CC debt than you have.

Meet with a few BK attnys and see what type of Ch 13 Payment they propose. I'm guessing with the arrears and the taxes, you aren't gonna be any better off than you are right now. Plus you won't have the safety net of CC's to keep your financial boat afloat.

You really need to take a step back and take a long, hard look at the numbers before you go jumping out of the frying pan and into the fire.

[wrigley1976]

I should have been more specific on my salary
in 2006 my w2 showed $117k
I lost that job unfortunatley and my current job has a base salary of $50k plus commission.
Since I just started my job- I am not making any commission- in a year i should be up to the six figure mark again.

[qwertysue]

I should have been more specific on my salary
in 2006 my w2 showed $117k
I lost that job unfortunatley and my current job has a base salary of $50k plus commission.
Since I just started my job- I am not making any commission- in a year i should be up to the six figure mark again.

One of the things learned while going through bankruptcy is how to look at things how they really are, not what we hope they should be. Unfortunately, there is no guarantee that you will be in the 6 figure mark next year. What's important is the right now.

Once you figure what needs to be done to live in the present, you'll be better equipped if the *shoulds* turn into *didn'ts*.

During our 341 a young man tried to look at his situation 12-18 months down the road. The Trustee looked at him and told him "No one has a crystal ball, I'm not concerned with what may happen, I'm concerned with the now".