I'm a newbie posting here but I have spent countless sleepless nights reading the many fine posts! I have gathered as much information as I can and now have some specific questions pertaing to my case. Many Thanks to all of you for sharing your experiences and knowledge!!!
First my story. ...
I lost my management job about two years ago and was unemployed for 8 months....At this time I was in the middle of a room addition and total kitchen remodel..etc...etc...
I finally found work and took a step backwards in my career and went back to repairing cars for aproximately 50% of what I used to make. I was hopefull I would get a job close to my old pay...So...I used up my 401k savings, took out a terrible second loan and have been juggling credit cards to survive ever since...sound familuar?
I was hopefull for a better tomorrow.....
AND HERE WE ARE! IN THE MIDDLE OF THE SECOND GREAT DEPRESSION!
Anyhow, here is my current financial situation.
My Income 52k
Spouse 14k
1 dependent 3 year old
First Mortgage $1726 BAL $285,000
Second Mortgage (Int only) 1028 165,000
MONTHLY PAYMENT $2754 BALANCE $453,000
current house value is $311k and dropping!
Credit Cards
PAYPAL BUYERS CREDIT $100--BAL--$4,597
PENTAGON FEDERAL C.U. $80--BAL--$4,850
CHASE / BANK ONE $100--BAL--$4,145
CHASE CARD SERVICES $275--BAL--$9,850
SEARS $75--BAL--$2,200 (Secured?)
TOM CAT MASTERCARD $325--BAL--$16,800
WELLS FARGO CREDIT $300--BAL--$12,890
HOME DEPOT $100--BAL--$2,000 (Secured?)
WASHINGTON MUTUAL $338--BAL--$13,096
VISA-RIVERFRONT $175--BAL--$8,000
Dell $75--BAL--$2100 (Secured?)
Lowes $22--BAL--$274
MONTHLY PAYMENT $1963 TOTAL BALANCE $80803
Boat Loan $300 $15800 (Soon to be sold!)
Total Unsecured Debt $80,803
Secured Debt $ 486,800
Assets
2001 Lexus IS300 (190k) $5500
1996 Toyota Previa (145k) $2500
1989 Zieman trailer $600
1983 Honda ATC $300
Wow! It sure makes me feel bad when you add up all the numbers and through them out there for public viewing!
My Plan
I've decided to try for a chapter 13 in 6 months and I will try to "lien Strip" the second mortgage. I understand that I will have to wait until my property value falls below what I owe on the first.... I'm waiting for 6 months for this to happen. This time frame also works for me because I will be able to file my taxes, save money for an attorney and practice living on a real budget. It also helps distance me from any objections from creditors..etc...I am currently not behind on anything but I will start going into default next month.
I plan on not paying my second mortgage at all durring this time because I doubt they will foreclose on property that they would loose money on.
I will pay my first mortgage possibly being 30 to 60 days behind (depending on tax refunds). The unsecured creditors I'll stop paying 90 days from last use. Unless some of those creditors are considered secured (see above)...
1st question - Is this a solid plan?
2nd ?----I was promised a better position with my current company but do to the current economy that doesn't look likely...I need to invest in my current occupation (a Lexus technican / Mechanic) and purchase tools.
This of course would put me in debt about 10k more than I am now. This debt would of course be secured and I would have to include this in the plan. It would also help me income increase overtime but who knows what lies ahead? Is this a bad move?
3rd question---I work at a Lexus dealership. Because I have worked there so long I could take advantage of a program where they supplement my income $400 per month to lease a new Lexus...I think I can keep my cars running for the next 5 years but even us mechanics have to pay for parts!..
4th ?--I am right at the boarder line for the median income for California. My wife currently works because my mother-in-law provides free day care. My wife wishes to return to college. If I fall below the median income I believe I can get into a 3 year plan but it would most likely have no disposable income. I only know of one BK Guru that has a 0$ plan (JUSTBROKE). But I believe he lives in Florida (btw-that guy missed his calling! he should have been a lawyer)...
Anybody know if those plans are valid in California...
I of course have a few other questions but I think i've rambled enough!!
I humbly thank you kindly in advance for any advise or comments
First my story. ...
I lost my management job about two years ago and was unemployed for 8 months....At this time I was in the middle of a room addition and total kitchen remodel..etc...etc...
I finally found work and took a step backwards in my career and went back to repairing cars for aproximately 50% of what I used to make. I was hopefull I would get a job close to my old pay...So...I used up my 401k savings, took out a terrible second loan and have been juggling credit cards to survive ever since...sound familuar?
I was hopefull for a better tomorrow.....
AND HERE WE ARE! IN THE MIDDLE OF THE SECOND GREAT DEPRESSION!
Anyhow, here is my current financial situation.
My Income 52k
Spouse 14k
1 dependent 3 year old
First Mortgage $1726 BAL $285,000
Second Mortgage (Int only) 1028 165,000
MONTHLY PAYMENT $2754 BALANCE $453,000
current house value is $311k and dropping!
Credit Cards
PAYPAL BUYERS CREDIT $100--BAL--$4,597
PENTAGON FEDERAL C.U. $80--BAL--$4,850
CHASE / BANK ONE $100--BAL--$4,145
CHASE CARD SERVICES $275--BAL--$9,850
SEARS $75--BAL--$2,200 (Secured?)
TOM CAT MASTERCARD $325--BAL--$16,800
WELLS FARGO CREDIT $300--BAL--$12,890
HOME DEPOT $100--BAL--$2,000 (Secured?)
WASHINGTON MUTUAL $338--BAL--$13,096
VISA-RIVERFRONT $175--BAL--$8,000
Dell $75--BAL--$2100 (Secured?)
Lowes $22--BAL--$274
MONTHLY PAYMENT $1963 TOTAL BALANCE $80803
Boat Loan $300 $15800 (Soon to be sold!)
Total Unsecured Debt $80,803
Secured Debt $ 486,800
Assets
2001 Lexus IS300 (190k) $5500
1996 Toyota Previa (145k) $2500
1989 Zieman trailer $600
1983 Honda ATC $300
Wow! It sure makes me feel bad when you add up all the numbers and through them out there for public viewing!
My Plan
I've decided to try for a chapter 13 in 6 months and I will try to "lien Strip" the second mortgage. I understand that I will have to wait until my property value falls below what I owe on the first.... I'm waiting for 6 months for this to happen. This time frame also works for me because I will be able to file my taxes, save money for an attorney and practice living on a real budget. It also helps distance me from any objections from creditors..etc...I am currently not behind on anything but I will start going into default next month.
I plan on not paying my second mortgage at all durring this time because I doubt they will foreclose on property that they would loose money on.
I will pay my first mortgage possibly being 30 to 60 days behind (depending on tax refunds). The unsecured creditors I'll stop paying 90 days from last use. Unless some of those creditors are considered secured (see above)...
1st question - Is this a solid plan?
2nd ?----I was promised a better position with my current company but do to the current economy that doesn't look likely...I need to invest in my current occupation (a Lexus technican / Mechanic) and purchase tools.
This of course would put me in debt about 10k more than I am now. This debt would of course be secured and I would have to include this in the plan. It would also help me income increase overtime but who knows what lies ahead? Is this a bad move?
3rd question---I work at a Lexus dealership. Because I have worked there so long I could take advantage of a program where they supplement my income $400 per month to lease a new Lexus...I think I can keep my cars running for the next 5 years but even us mechanics have to pay for parts!..
4th ?--I am right at the boarder line for the median income for California. My wife currently works because my mother-in-law provides free day care. My wife wishes to return to college. If I fall below the median income I believe I can get into a 3 year plan but it would most likely have no disposable income. I only know of one BK Guru that has a 0$ plan (JUSTBROKE). But I believe he lives in Florida (btw-that guy missed his calling! he should have been a lawyer)...
Anybody know if those plans are valid in California...
I of course have a few other questions but I think i've rambled enough!!
I humbly thank you kindly in advance for any advise or comments
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