Could use some advise.. Please..

[rbaronex]

Well, I’m at a point in the road where I need to make a decision, to file a CH-13 or not. My scenario, is somewhat simple, I have close $90k in CC debt due to a failed business, I have a few assets that will cause me to give my unsecured $40k (credit cards). I do own a home that’s under water, and with a HELOC on it that could be stripped for $53k.

My total BK-13 would be for $68k - $40k to credit cards, $18k to my vehicle and $10k between the trustee and attorney. I’m already $1200 dollars into this attorney because I should have really waited prior to acting. My BK-13 payment will be $1133 per month, which we would struggle to make the first 8 months until our second income returns. The wife is not to keen on BK and hate for this to lead to a divorce.

The other solution is settle with my CCs for 50% of the balance (if possible) sell my asset to cover this or borrow from family (possibly) to settle immediately with CC companies. I lose the $53k lien stripping, pay my vehicle and HELO as usual ($500 per month combined) and avoid a 13 filing (of course this can only happen if my CC companies agree to settlement – I am already 60 days late going to 90 soon). Also, I will have to look into the written off - $40k from the CC companies and see what the IRS has to say about that as well. I just don’t know, BK or not? Also, forgot to mention, I did call a few of my CC folks and they strongly told me they would contest any BK filing and cause problems if I intent to file. Whatever...

I cannot afford to have my cash and assets locked up for years. I have 4 kids and in case of emergency, I cannot be strapped like this. But the CC companies are getting nasty and call are getting out of hand.

What to do.. Any advise would be appreciated..

Thanks,

Rob

[95kindebt]

no advice, just wanted to say I feel your pain, and good luck.

[optimistic1]

My BK-13 payment will be $1133 per month, which we would struggle to make the first 8 months until our second income returns. The wife is not to keen on BK and hate for this to lead to a divorce.

Well, maybe you can wait it out longer and not have so many struggle months, besides, when you get the second income, you may need to modify your plan and your payment would go up unless your plan is already a 100% plan.

The other solution is settle with my CCs for 50% of the balance (if possible) sell my asset to cover this or borrow from family (possibly) to settle immediately with CC companies.

Keep in mind that there is no guarantee that all of the CC companies will even settle with you. And if they do, you will need to show the IRS that you were insolvent at the time, otherwise you will be required to pay taxes on the settled portion of the debt.

Also, forgot to mention, I did call a few of my CC folks and they strongly told me they would contest any BK filing and cause problems if I intent to file. Whatever...

That's funny, I am sure you were talking to a supervisor right, not some kid making $12 an hour taking calls from customers. And what is their basis on contesting it?







You will need to decide what to do, before creditors take action, which can take 3-18 months. With your debts, and the HELOC, I would file a 13 and get the protection that you are entitled to. You can and will be able to survive a 13.

[rbaronex]

Thanks Guys, all good advise. Appreciate it. Its tuff, and I can't wait until this nightmare is over. So much for the Real estate business that was once a great accomplishment on my part, ending into a financial nightmare. It appears that settlement or BK-13, unsecured will get at least 45% of what we owe them. Due to the non-exempt asset worth $35k, it is what it is. At least, outside of BK, I can sell it any time and my stock account
(worth $18k) can be accessed to pay our bills or in case of emergency.

In BK, I was told I can't move or touch a thing. I can even lose it to unsecured. I had a crappy attorney, period. They were looking to make a buck by referring BK to me, and disregarding the consequences of locking up my asset and cash with a family of 4 kids. bummer... My fault for rushing into this. I rather face the wrath of credit card companies, than not being able to access my resource to survive.

Still looking into options.... Your help is truly appreciated..

Thanks Again !!

[rrockinggramma]

could you really sell that asset for 35 K in this economy? Just wondering. . and selling it? Who has that kind of money now? You already owe 20K on it to your parents (inlaws) and having them "refinance" it makes you owe 55K on it to them.

Not suggesting BK is the way to go. It is a tough decision but I bet in a year you are back saying you wish you would have filed sooner.

[holycrap]

I don't have a ton of experience with this yet, but i know two things so far.

1. don't let a lawyer or a CC customer service rep push you into anything faster than you feel you are ready. If you are already behind 60 days than the damage is done to your credit score. Take your time and do what is best for your family. (while i was typing this one of our creditors called. I feel like a loser)

2. You and your family are going to be living a different life from now on. There will be changes for your kids whether you file or not. Filing CH 13 may not be the perfect solution, but it does a few things that i feel are important. It pays as much as possible to the folks you owe. I teaches everyone to re-evaluate what is needed vs. wanted. It also offers a definate end to your situation. After your plan ends you really do have a fresh start. Dodging them does not offer that benefit.

I hope things work our well for you and your family.

[ashlei422]

no advice, just wanted to say I feel your pain, and good luck.

I agree. Seriously, from the bottom of my heart.