A lot of questions...

[huntington]

Since January we have had a lot of credit card use and now we are just bogged down. We didn't open any new cards or do any transfering. Although, we did use a few cards that hadn't been used in awhile and did take several cash advances. As of now we are trying to stay on top of payments. Talk has turned to BK, but we are also in the process of modifying our home loan and should FINALLY have the results of that in a couple of weeks. IF we did decide to BK, we would wait til we found out what the situation with the modification is. Should we stop making payments? What is Preferential payment mean? 1 of the cards I had had for awhile but didn't use until Jan. for the first time. Should I keep paying on that 1?

[jayalln]

Since January we have had a lot of credit card use and now we are just bogged down. We didn't open any new cards or do any transfering. Although, we did use a few cards that hadn't been used in awhile and did take several cash advances. As of now we are trying to stay on top of payments. Talk has turned to BK, but we are also in the process of modifying our home loan and should FINALLY have the results of that in a couple of weeks. IF we did decide to BK, we would wait til we found out what the situation with the modification is. Should we stop making payments? What is Preferential payment mean? 1 of the cards I had had for awhile but didn't use until Jan. for the first time. Should I keep paying on that 1?

Well first you need to pay all your bills if you can credit cards, house payment etc. Your primary payment however would be your house payment. Never neglect your rent or mortgage people far too often do that and that is a mistake. Your credit card companies can't foreclose on your property. I should suggest you pay your mortgage before you pay anything else.

Now the next question are you behind on your mortgage and how far are you behind.

The chapter 13 will allow you make up any missed payments. And depending on what you have left with the disposable income will determine if you have to pay the credit cards back at all.

Next do you really need to final bankruptcy once you get the home modification that may loosen up some cash to pay those card balances down. It is maybe you or your spouse should get a second job for a short time to help pay down some of the debt. I am not trying to discourage you but bankruptcy is a lengthy process.

Word to the wise if you get your home modification never be late. One day late and they can throw you out of the modification program.

So my advice to you is try to see what happens to the modification. Talk to your credit card companies too some are willing to let you miss or skip a payment or two. Try finding a second job something to bring in some extra cash. It is the summer time. Some people detail cars . Some people mow lawns. Whatever little extra work you can find. Try doing this for about 6 months and I am sure your situation will get better.
If all else fails bankruptcy maybe your only choice

I hope this helps some

[SMinGA]

Since you're posting in the ch. 13 sub-forum - I'll assume you are considering ch. 13 and not ch. 7. Preferential payments are not as big a concern in my opinion for 13's, though it may set a minimum that needs to go to unsecured over the life of the plan.

1. STOP using cards. Learn to live without them.
2. STOP making the payments - with the exception perhaps of cards where you did cash advances. Consult w/ a local attorney to be sure but it may be in your best interest to make a few more payments on them.
3. Start learning what your cash flow is like, and what your expenses are.

[huntington]

Thank You

We have never been late on our mortgage and up until very recently never late on our cc. BK is a good option for us because of our 2nd on the house. (We have had the house appraised and it came back less then we owe on it) As far as second jobs, we both work full time and if we got rid of the payments, we will be fine. But, at this point I am spending every dollar coming in on cc and barely finding cash for food! We have stopped using credit cards for about a month, some 2 months. Most of them are maxed out. I'm just worried about the timing of it all. Is it bad that we are showing some late payments, not really any missed payments? Or is that what they want to see? I've read that some people have stopped making payments for several months before filling, "don't spend good money on bad money." What about a lot of activity on some cards recently (1-3 months ago)? We have talked to a lawyer a few months back, but just to get some very basic ideas. I know we will need to talk to one again, but I'm finding there are a lot more questions that I would not have thought of! We are looking at a BK as a way to actually start getting ahead. The only reason we got so far into debt was because we were living on 1 income for about 5 years due to family issues. Thank you for responding back so quickly. Any and all helpful advice, suggestions or thoughts will really add to my list of questions when I see the lawyer!