Unsecured loans and bankruptcy

[momisery]

We took out a loan to pay off our cars about 8 months ago. It lowered the paymehts as we were still hopeful that the economy would turn around. Well, it hasn't of course and today the attorney told us that we should stop trying to pay the credit card debit which monthly is only about 200.00. But we need to keep paying the loan because they may come after us in a chapter 13 because the loan is only 8 months old and ask the judge to not throw it out? I don't know how I can save up 1500.00 in 3 months if I have to keep paying the 453.00 per month... and I don't get it. We have always paid our bills, I am almost 60 and never been late, never bounced a check and I feel horrible about this. But we can not pay our bills now, and we don't have that many years left to save up again. Our home is worth nothing now, and our 401K was tapped to pay debt. I just kept thinking it would trun around.. I am really depressed about this.

[rrockinggramma]

what kind of loan did you take out? Was it from your 401K? Generally any refinance of secured debt is secured by that collateral. However in a chapter 13 you can put the vehicles in. However if you withdrew from your 401 K and just paid them off, then that loan is "unsecured" and your cars might have some equity that can be exempted.

So the key is what kind of loan was it and was it secured by the cars or an unsecured loan. Talk to an attorney or two or three. But you can put the vehicles in your plan along with everything else. I would put EVERYTHING into the plan (except maybe the mortgage)

[momisery]

The loan

We paid off the car loans with an unsecured loan with capital one. So the cars are free and clear. We spent our 401K's trying to pay our bills. Right now I am not sure if we can afford our house, but because they count the rental income from GA, even though we had to kick in 300.00 each month while we hopped the place would sell...... I am wondering if we should simply let the house go too and rent. The house is worth less that what we owe on it by about 10,000.00. We could not sell it with realtor fees and all if we needed to. Thanks for your response.

[woeisme]

If you've been paying on it for 8 months, I don't think it should be a problem to stop paying and file BK in 3 months when you have the $ saved up to pay the lawyer. As long as you can exempt the equity in your cars, there shouldn't be a problem. You can include the house in the BK.

[momisery]

We had a consultation and were told that. We are thinking of checking into another attorney since this one seems to not say the same things that I am reading on this site. Never hurts to get a second opinion and a third.. ha ha.. thanks so much...

[rrockinggramma]

if capital one did not secure the loan with a lein on the vehicles then they would be out of luck when you file. It is an unsecured loan and your cars are free and clear. Then you would just have to know if the equity in them could be exempted.

Quit paying the unsecured loan, pay the attorney fees and file if that is what you want to do. Without all of the loan payments and cc payments could you afford your house? If so, then keep the house (only 10,000 under water the market will come back after a while) and move on.

It is unfortunate that you used your 401K to stay afloat. That could have been exempted in a BK but oh well, too late now.

[momisery]

I have never bounced a check, never been late and had a great credit rating all my life. I felt the right thing to do was spend my savings and this would all turn around. I guess my concern is that hubby's income is not reliable. My income will not cover the daily living expenses and our loan payment. We do have a first and second so maybe we should do strip?? I read that on here someplace and will talk to a lawyer about it. But if we file, and keep the home and then end up knee deep in medical bills as we are close to 60 what then?? I guess I am so scared and I have never felt so crummy in my whole life. I hate to get up and go to work right now, and I am angry most of the time. While I don't take it out on others or my job would be history... I am not pleasant to be around at home, and hubby does suffer. But I felt like he is the one who lost his job, and has not had a good work track record for a few years now. At times he is home when I am working and that bugs me. I feel like he isn't doing his share or trying hard enough. To me a man should find a job no matter what.. then I have to fact the facts that finding a job is hard. But then he wants to do sales, and really isn't doing well at all. Okay, I have whined enough now... at least I do have a job still.

[BigJohn]

I was once a computer engineer. In the area I was living at, one company after another went out of business. Was it my fault? What did I do wrong? At least some people thought that way. I was able to adapt and change, something that is hard for most to do. I am one of the very few people that have designed software, firmware and hardware. Add to that list I am one of the very few people that were involved in the engineering aspects in regards to micro, mini and mainframe computers.

What I found out over the years was that those that got on my case were in effect, not helping me one bit. And those that claimed they were my friends, soon found out our friendship came to a halt.

[momisery]

The numbers are growing I am afraid. And it is hard on people who have a career for years, and then suddenly they lose it. I think we kept thinking he would find something and we would be fine. So we paid the cars off with a low to lower the monthly payment, we already have a small home, and our furnature is worth nothing.. Somewhere this world is upside down I think. That average hard working people are wiped out by a bunch of wall street bums.