ready to file?

[brokeNconfused]

here is what i have done so far. Does it sound like i am ready?

I got a market analysis for home shows 0-5K equity
paid credit union $450 to pay with coupons instead of automatic withdrawl from account

Same credit union owned SUV I plan to give back on Monday
I have credit card with same union and have not used much since January.

I bought 2007 car, lower payments than SUV and better on gas, put $400 down.

have not made much purchases with credit cards since january. I have one used with $700 in purchases during month of February, but gas/groceries and have reciepts for almost $500 of it.

no assests to speak of except an old truck worth $300 and a riding lawn mower. I have no HD tv's, no new furnature. Only thing is i do have new clothes for work.

I think i am ready and just need to take the credit class. Any sugestions? I do have money in bank, does it need tocome out? if so will the trustee ask where it went?

[lrprn]

Run, do not walk, and move your savings and checking accounts out of your credit union before you file!

Establish a savings and a checking account elsewhere so that you don't run into any cross-collateralization loan clauses between all the accounts you owe this one credit union. Those can be a nightmare, especially if you intend to file without a lawyer.

Cross-collerateralization clauses are VERY common in credit union unsecured loan and credit card agreements and allow the credit union to take cash from your savings or checking to pay what you owe. They won't ask your permission first either - they'll just take what's needed to pay what you owe on another account. If they do it after filing, you can get it back, but it can take weeks. Far better to avoid the possibility altogether by leaving $5 in each of the current credit union accounts and move the savings and checking to another financial institution.

As far as how much you can have in savings and checking when you file, that depends on how much cash you can protect under your state's bankruptcy exemptions. Which state do you live in and how much cash are we talking about here?

[brokeNconfused]

well i live in washington. As of now i have a few hundred due to the payments and setting things up. What worries me is do have anohter account now, but the home loan is still with the credit union. I set up a payment coupon with them so i can mail it directly to the home loan department. I am hoping that will keep them from taking it to pay my credit card and car payment. Thoes were cross-collerateralized. So if figured if i can mail payment directly to loan branch and not put in account. With money for house payment specifically for that hoping they wont take it too.

any suggestions?

[lrprn]

well i live in washington. As of now i have a few hundred due to the payments and setting things up. What worries me is do have anohter account now, but the home loan is still with the credit union. I set up a payment coupon with them so i can mail it directly to the home loan department. I am hoping that will keep them from taking it to pay my credit card and car payment. Thoes were cross-collerateralized. So if figured if i can mail payment directly to loan branch and not put in account. With money for house payment specifically for that hoping they wont take it too.

any suggestions?

As long as you don't have a savings or checking account with the credit union, you'll be fine. It makes no financial sense for the credit union to take your mortgage payment and use it for a different debt.

Washington has a wild card exemption of $200 for cash, bank deposits, bonds, stocks) - it's not much - http://www.washington-bankruptcy.com/exemptions.html

However, in Washington you can choose to use the federal exemptions as well - they are more generous - http://www.bcsalliance.com/y_bankruptcy2.html

One more thing...you don't mention if you are married - if you are married, keep in mind that Washington is a community property state. That means that any debt that was created during the marriage is shared by both husband and wife. You have to file together to wipe out the shared debt.

[brokeNconfused]

well it was all created by me not her. She also filed about 5 years ago before we married, not sure if she can file again. Im now learning from another post that since i gave back the other vehicle they can come after me for difference. Does that mean i cant add that in my bankruptsy?

i

[mcdulph]

Hi, from what I understand you would just include the "deficiency" on the car loan in the bankruptcy. I don't see why you couldn't.

On another note...I completely understand having a bazillion questions and wanting them answered NOW...I've been there myself. I had to go on sleeping pills and get my depression meds increased. NOT a fun time, at all.

But please remember that your fellow boardies, including me, do not have all the facts. Presumably, your lawyer does.

If my lawyer told me to turn a vehicle back in to the bank, I'd trust that that was the right thing to do...unless & until the lawyer gave me reason to doubt his or her competence. The same thing about being able to file by yourself in a community property state. If your lawyer said that you can, I really wouldn't worry about it.

Good luck, and try not to worry too much. Yeah, easier said than done, I know!

[keepmine]

I've seen a few of your posts and in one you state, you're a family of 5 below the median and in this thread, you say you have minimal equity in your home. Why are you filing a 13?

[brokeNconfused]

i want to do the 13 so i can refinance soon and get out from my variable interest loan that will kick in, in 2.5 years. I dont want to lose the house. I do qualify for the 7 and will probably convert when i can refinance if its allowed. Hoping for now to get a low payback.

[keepmine]

i want to do the 13 so i can refinance soon and get out from my variable interest loan that will kick in, in 2.5 years. I dont want to lose the house. I do qualify for the 7 and will probably convert when i can refinance if its allowed. Hoping for now to get a low payback.

That's about the worse reason I can think of to file a Chapter 13. To save something with negible equity and the possibility that it may lose even more value.
You qualify for FHA financing at conventional rates 2 years post bk.
Part of a successful bk is you stop making the mistakes that got you here in the first place. Don't keep making these same mistakes.

[brokeNconfused]

you wont qualify for a FHA loan just 2 years after a 7 would you? I already talked to a lender and they said no and projected at least 5-7 years out with a chapter 7. I can maintain things until this is over. I wont lose equity in this house, our market is still doing good and new homes going in all around. even so it only goes up 2% at start then i get another 2 years before the next jump. I can cover payments with that still. At least im keeping my fingers crossed. I am not turing my head at all the good advice here, i just have job that if they find out, will work it against me. I wont get a job in my field for sometime, if ever. Trying to save as much as possible before the hammer falls.

[jgarton244]

You want to file a BK 13 plan to save $5k in equity? Absolute minimum payment ona BK 13 plan is $125 month, or $7500 over 60 months. You may end up paying more. I would file the BK 7, and get rid of the debt and the house. As posted earlier, you can qualify for a FHA loan in two years after the BK 7 closes. I guess it boils down to what your monthly payments are in a BK 13 plan. If they are $200. month, that is $12k you could save over 60 months for a down payment on another home, with a FHA mortgage.

Plus, if you let home go into foreclosure, that gives you a period of time to live in the home without making mortgage payments, usually 3 mnoths to 12 months. Additional monies you can acrue for a home down payment/ purchase in a few years.

[HHM]

I agree, I see no reason why you should file a chapter 13 unless you absolutely cannot file a chapter 7,