Is Chapter 13 Right 4 Me??? HELP

[blitz1771]

Hi everyone I'm like so many others out there in debt and lost. In the last three years I've seen my salary reduced almost 15k a year my wife lost her job and we ultimately have not been able to keep it together. We have four children and the costs of running our home have swallowed us up. We owe close to 60k in credit card debt and though we have never missed a payment or been late have we've seen our balances slashed with every payment we make and our rates raised as high as 31 % on some cards. The results of trying to keep up has put us a month behind on our mortgage and I can no longer pay these vultures on there terms anymore.I've tried to negotiate with the cc companies on my own and though I did have some success most won't budge. The truth is my take home is 3800 monthly my mortgage is 1875 a month and the cost of running our home with all bills is just over 4100 leaving little to no savings. Can someone tell me how 13 works and if I can do it?????

[optimistic1]

First off, stop paying the unsecured credit cards immediately, and catch up on your mortgage if you really want to keep the home.

Second, why is it that you are drawing towards a Chapter 13 rather than a Chapter 7, what assets are you trying to protect?

Third, what is your gross income for the last 6 months? Multiply it by 2, hopefully its less than $57,006, if so, you qualify for a Chapter 7.

Your state exemptions are listed at the link below. Do you exceed these at all?

http://bankruptcy-law.freeadvice.com/bankruptcy-law/new-york-bankruptcy-exemptions.htm

Most creditors will not talk settlement until you actually start falling behind several months, they will negotiate interest rates as well, you might want to seek that route, although your credit score will suffer from the action.

[lrprn]

Can someone tell me how 13 works and if I can do it?????

Here are several good links that explain how Ch 13 works:

http://www.abanet.org/publiced/practical/bankruptcy13_whatis.html

http://moranlaw.net/13workings.htm#Chapter%2013%20practice

http://www.uscourts.gov/bankruptcycourts/bankruptcybasics/chapter13.html

Can you file Ch 13? If you have enough disposable income showing on the Means Test and Schedules to support a Ch 13 plan, then yes, Ch 13 is a possibility. However, if you can get current on your mortgage and depending on your debt levels and normal living expenses for your family, it might be possible to file a Ch 7 instead.

Set up 3-4 free initial consultations with experienced bk lawyers in your area as soon as possible so you can plan your bankruptcy in a sensible way. Lay out all your financial information and discuss your options. Select the one that works best for your family in the long run.

Once you speak with the lawyers, if they advise that in your situation it makes sense to stop paying your unsecured creditors (credit cards), then do so immediately.

Definitely do NOT ever pay credit cards or other unsecured debt over your mortgage if you want to keep your house when you file bankruptcy.

Also definitely do NOT remove any money from your or your spouse's retirement accounts for any reason. These are 100% protected when you file bankruptcy.

Hang in there. The start of the journey is the roughest, and you are doing the right thing trying to find out as much as you can about your options. We're here to help you sort things out every way we can. Welcome to the forum!