Commission based income

[brighteyes]

I have almost read this entire board and I guess I haven't found the answer I'm looking for, or I've miss it somewhere.

We have not filed yet, but plan on doing so in the near future, timing depends on answers I'm waiting for from the Lawyer, but this is one I've been researching on my own.

DH will be changing jobs anytime now, it will become a commission based job. He will be getting a set salary, but it is in sales. I know that he will make the same or maybe just a little more than he did last year, for 2011. As far as the next 3-5 years, who knows. There are guys in the field he is going into making 400k in just commissions (mind you they've been doing that job and that company for 5+ years). I am nervous if we choose a Chapter 13 just to save our house and end up having to pay back everything AND have a black mark on our credit. Just doesn't seem worth it. I know it is totally depends on the trustee that you get but there has got to be some numbers out there stating those who have increased payments.

[RunningMan]

Do you qualify for a chapter 7 now if you let the house go? If not and you don't file a chapter 13, will you will lose your house to foreclosure? If so, that will put a black mark on your credit for the foreclosure, and you will still owe 100% to your other creditors (plus compounding interest).

I don't know anything about your husband, so don't take this the wrong way, but it is also possible that his new career will not result in a huge pay increase for your family. I have worked in sales and also have had sales people work for me. There is an old rule in sales that says 80% of your sales will come from 20% of your sales people. This is just my two cents, but I think you should decide based on what is right for your family right now and not what could happen if you win the lotto, or your husbands career takes off. Cross that bridge when you come to it.

[brighteyes]

We do qualify for a 7 if we let the house go. Our home will go into foreclosure if we don't file one or the other, or (there is another post under Foreclosure) if Wells Fargo realizes they have an 'assurance' signed between 10 states and act upon that we might be able to save it. Anyways, we are going to file one or the other, just trying to see which one works best for us. I think it's a crap shoot on what the trustee will approve/request/do during the Bankruptcy process.

He was in sales, company tanked, found another job (not sales), and now has the opportunity to go back. He was very successful at his previous job and this is in the exact same line of work. While I don't expect him to be pulling in what some others do (cough - work-a-holics - cough), it will become a significant income increase over the course of 5 years.

[RunningMan]

Well then I guess all you have to decide is if it is worth 3-5 years of bankruptcy payments to keep the house, or to just file chapter 7 and be done with it. Are you underwater on the house? Do you have any back taxes that can't be discharged in a chapter 7 that you want to take care of?

[brighteyes]

Isn't everyone's house in AZ upside down? So we owe about 502k and it's worth about 275k. Our first is 348k and our second 154k. The only reason we are considering a 13 is because of the stripping, thus keeping the house. We would be in the 5 year plan no matter what and a lot can happen in 5 years and there is just no guarantee that we won't be paying back all the debt. Oh, and no back taxes. We are leaning towards the 7 and just letting the house go. We can always get another one in a couple of years. It's just a very strong emotional tie to that stupid inanimate object!

[ABC]

Isn't everyone's house in AZ upside down? So we owe about 502k and it's worth about 275k. Our first is 348k and our second 154k. The only reason we are considering a 13 is because of the stripping, thus keeping the house.

Simple math.
13:
If you strip it you still owe $ 348K on a home worth $ 275K. Even at the end of 60 months you'll be upside down.

7:
You include it and let it foreclose. You rebuy a similar home 3 yrs from foreclosure @ $275 K. If you get a ShortSale then your timeline would be even shorter at 2 years.

So , what do you want ? A $ 348K mortgage and No CC bills in 60 months vs a $ 275K mortgage and No CC bills in 36 or less months.