What will the Attorney say??

[PyroGuy]

Hi Guys,

New guy here....going to a meeting with 2 different attorneys next week.

Background:

$30K in cc debt
100K heloc, 35K "home improvement" (3rd) loan.
148K first....with the home now valued at 142K in FL (at one time...valued at $375K!)

All current with ALL cc's and mortgages....but trying to live on like $500 per month with a fam of 5! Can't do it anymore...going for 13.

First question: Do you think the attorney will recommend to stop making payments on the cc's and heloc and 3rd? We want to plan on keeping the home and won't miss a payment there.

Old car with 75K miles....way upside down....will he tell me to get a better car for the wife while credit is still good?

If he suggests stop making payments....how long should I go before filing? 2-3 months?

ANY help here would be great...and I am sure that most of these questions have been answered, just not all at once. Plus, I am sure I will have some more questions later...but this is just a start!

Thanks!!

[momofthree]

Yes, buy a new(er) car before filing, finance as much as you can to keep the equity low.

Yes, stop paying credit cards and the 2 home loans that you wish to strip.

[PyroGuy]

How long before the calls start coming....and what should I tell them, especailly if I don't plan on filing for 3-4 months.....

[justbroke]

First question: Do you think the attorney will recommend to stop making payments on the cc's and heloc and 3rd?

Yes, he will on all 3.

Old car with 75K miles....way upside down....will he tell me to get a better car for the wife while credit is still good?

If going into a Chapter 13, he will want you to have reliable cars that will last 3-5 years!

If he suggests stop making payments....how long should I go before filing? 2-3 months?

Probably several months, but it doesn't matter unless you were making purchases on those credit cards.

How long before the calls start coming....and what should I tell them, especailly if I don't plan on filing for 3-4 months.....

Tell them that you are currently having trouble paying. Don't tell them when you'll pay. Just that it will be 4 weeks or more. Don't promise anything. Don't agree that you owe. Don't stay on the phone with them "talking", just tell them you're having troulbe but hope to be okay in 4-8 weeks.

Why are you not filing Chapter 7? Are you trying to keep your home if you can strip the 2nd and 3rd mortgages?

[PyroGuy]

Yes, Justbroke...we want to keep the house. If there was a way to file Ch. 7 and keep it, we will do that....but our house is upside down only about $4K right now, and not forseen to go much lower. I also have never missed/been late to this date on the 1st mortgage.

As for the car(s)....am I to assume (with atty recommendation, of course) that I aquire a new simple vehicle, stop paying on my old junker and wait for them to come and get it? Should I drop it off somewhere? I know the atty will fill me in next week, but I am curious to know the procedure....

Thanks for any help!

[justbroke]

Work with the attorney on the strategy for replacing the car. I think that the strategy will be to acquire the new car, but keep the old car for as long as possible, so it's not repossessed before filing. This will prevent the double whammy on your credit report.

[PyroGuy]

Thanks for all the info Justbroke....after searching some through the forums....I found this about getting the phone calls from cc companies....

"When a creditor would call, I would just use the blanket excuse:


Quote:
My cash flow has deteriorated to the point that I do not believe that I am solvent enough to continue to meet my debt obligations.

When asked exactly what happened, I responded that I wish to keep that private, and would only divulge such information as past of a BK filing. When asked if I still had money in the bank, I said that I did, but that in my estimation, there was only enough for me to live on until such day that my financial crisis would pass.

When asked if I could make a payment, I would always say that per the instructions given to me by my attorney during our free consultation, that I should refrain from paying one creditor unless I was prepared to pay all creditors, as that would cause problems if I were to file BK (i.e., preferred creditor.)

I would always add that although I had had a free consultation with a BK attorney, that I had not made the final decision to file, and that if I could get my creditors down to a low enough level, that I would not file."

[NoTomatoCan]

Pyro - While there is a ton of good information on this forum, particularly under the Collections section, there is also some friendly debate at to how much to disclose to creditors.

I am personally of the belief that unless you are planning on filing within the next few days, no sense in mentioning anything about bankruptcy. You are under no obligation to disclose any of that information, and I wouldn't want an anxious creditor to speed up any type of legal action because I mentioned bankruptcy. A simple "I can not pay right now. Don't know when I will be able to pay. Thank you. Click." will suffice.

I only bring this up because in your original post you indicated a time frame that could be a few months off.

Really, until you file and the creditor has a case number, the calls will continue. Almost like clock work, you can expect calls starting just after 8AM up until about 8:45PM. It sucks. (That is, in my opinion, the worst part of the BK process) It is good to make sure you answer a call from each creditor at least once so that you can let them know that they have "located" you. This helps prevent them from trying to contact relatives or neighbors.

Keep reading through the Collections section for more on how to handle the collection calls. Tons of good info out there!

[SMinGA]

Before going into a 13, making sure you have reliable transportation is a wise decision in my opinion. Reliable does not mean a $50k car though. Reasonable is a gray area, but something that fits your needs but is not over the top in cost. One thing to find out - is whether your district includes car loans in the plan at a till rate. If so, don't even worry about what rate you get on financing.

From your #s, seems like yours is a good case for stripping the 2nd & 3rd as your house is just under your first mortgage balance. If you wait to long to file, that could change. You can't strip the 2nd if there is any equity in it at all. Just keep in mind...

Collection calls will start as soon as you go a few days late. Don't go into great detail with them. I kept it as simple as stating I did not have the ability to pay, and did not know when I would have the ability to pay. Don't set up payment arrangements, which is what the collection calls will aim for.

[PyroGuy]

Thanks guys....I am so appreciative of this information that you are providing me (and anyone else who reads this).

I will keep you all up to date as to what is going on!

Thanks again....