Dumb Question

[ttcbk]

Hey guys, I'm still going back and forth about whether to file or not. I keep reading about how some people fail because they stop making payments, etc. Right now we are making our bills with like $500 left over each month (before food and necessities) so it doesn't leave much and we scrape each month. My cc payments equal about $1100 monthly and 2 new car payments are about $700. I'm not late on anything right now. I don't understand how it could be anything but useful for me to file a 13 though. My payments would have to come in less than the current $1800 I'm paying right now right? So anything less than what I'm currently paying would be helpful. Am I not seeing this the right way?

Like if I had another $500-$700 a month breathing room, we'd be able to do normal things like go to the dentist and not stress about it.

Also, say we are 2 years into the 5 year plan. If I got an inheritance, could I use that to pay the court off early and satisfy the 13 early?

Thanks!

[kornellred]

You have got some serious thinking to do. You are at the point in your credit life where you have become forever trapped in debt unless one of several unlikely events occurs: win the lottery, start earning a much larger salary, or stop using credit and pay down the debt. Paying down your debt and forsaking credit is at least a highly probable scenario if you have the discipline and a fair share of luck. Over-achieving, goal-oriented people are most likely to succeed at this task; unfortunately, such people are usually the ones without debt problems to begin with.
Even maintaining your current debt level could be construed as a worthy goal, but you will eventually resent the fact that you are just giving your hard-earned money away month after month and year after year without anything to show for it. This is called maintaining the status quo, and it makes for an orderly society.

So there you have it. There are those who are not in debt, those who are in debt and managing to get by, and those whose debt level has become intolerable for any number of reasons. Chapter 13 bankruptcy is no picnic, but is one of the surest ways out of intolerable debt.

I am in my second bankruptcy. My advice would be to wait until your debt is intolerable. It's only money, after all.

[enginegirl]

Hey guys, I'm still going back and forth about whether to file or not. I keep reading about how some people fail because they stop making payments, etc. Right now we are making our bills with like $500 left over each month (before food and necessities) so it doesn't leave much and we scrape each month. My cc payments equal about $1100 monthly and 2 new car payments are about $700. I'm not late on anything right now. I don't understand how it could be anything but useful for me to file a 13 though. My payments would have to come in less than the current $1800 I'm paying right now right? So anything less than what I'm currently paying would be helpful. Am I not seeing this the right way?

Have you done the means test yet?? this should give you a good idea of what your payment will be.. here is the link

http://www.legalconsumer.com/bankruptcy/means-test/

Be aware that every single piece of your disposable income goes towards your 13..... you have to be able to have a strict ( I mean SCRICT!) budget and it is NOT easy!

As far as getting an inheritance and being able to pay off early... that should not be a problem ....

Best piece of advise I have gotten.. go to a couple of lawyers see what they say... find the one that you feel will fight for you.. because the Trustee will do his/her best to get every single penny from you...
Hope this helps.... Good Luck to you!

[ttcbk]

I just went through the means test again. It's telling me that I qualify for a chapter 7, but my yearly income is $107k (for the state of Md I have to be under $101k). But the means test wants to know how much I've made every month for the past 6 months. If I file in June I will only get 2 paychecks a month totaling $49,384. The extra paycheck months this year are July and December. Based on that number that means I would qualify for a Chapter 7, because for a 4 person family I need to make under $50,847 in 6 months. Does that sound right, or will they take my total salary into account?

Thanks!

[DebtEnder]

It is a 6 FULL month look back. So if you say filed tomorrow they would look at July 1 to Dec 31 income and it is half of the median income you must fall under to avoid relying on the means test to qualify for Chapter 7. I have heard of some UST looking at cases even under means with high DMI and trying to force a ch13 under Totality of the Circumstances clause but the means test is the streamline chapter 7 method.

[Flamingo]

To the OP - as another poster stated above, you are at a point where if you don't do something your debt will just become greater since you will start relying on ways of robbing Peter to pay Paul to get by and you get to the point of basically no return where you truly realize you are stuck in a spiraling black hole that leads to no where and BK is the only way out unless someone knocks on your door with a check for $100,000. You have reached the point that you know you have a problem and are trying to figure out whether to stay there and struggle or file BK and have several years of controlled payments to allow you to keep certain assets and dispose of a certain percentage of your debt. Your best bet is to seek at this point some free consultations with a few BK attorneys so you aware aware of what you can and can't do and then plan from there. Believe me, the more you wait, unless you have a big bonus check come in or hit the lottery, you will just become deeper in debt as time marches on. Think about it - you are one paycheck away from disaster.

[BrokeinMD]

I know for me, I wish I found this site in 2005. I was laid off that year, and through other half's income at my unsecured debt. Sure wish we had that cash now!