Chapter 13 looking like the only viable option....

[ccmisery]

So here is my story, I lost my job 6 months ago, prior to that my wife lost her job and has been out of work for several years, I know it sounds pathetic but she can't find a job in her field and applied for jobs making way less with no benefits to no avail. It appears she has been out of work so long that nobody wants to touch her in this market it's just not easy and has been miserable and depressing. My wife filed Chapter 7 before we were married and her credit is clean currently, but she had two credit cards that were offered to her a few years after (go figure), student loan debt around a total of $16K or so, I have been paying her CC debt and her student loan has been deferred since she lost her job.

I never filed bankruptcy and have been paying my debt and trying to pay it down but it's been a losing battle that got worse when I lost my job, I was provided a severance and unemployment after that dried up, which wasn't much, from my savings and that I was able to keep all of my accounts current but a few months ago I ran out of money and had to stop paying on a couple of them, I had some credit on another that I was using to live off of and still paid, but that soon got maxed out, I know stupid but I was hoping to land a job sooner, well I got a job a month ago at a slight pay cut and now have 3 credit cards past due, the calls and letters are coming but I was told that the only negative now is that a missed payment notice will be sent to the credit agencies, which will hurt my credit of course.

I am so far behind on one of them that they want nearly $1K for the min. payment, I cannot possibly do it and the interest rate is insane at the moment. The other two might be possible, along with credit card debt I am paying all my wife's bills but stopped paying her her cards as well, we have a car payment (lease with a 2 years left on it), my car is paid for in full but it's old and won't last much longer.

Questions I have and yes I read and read but still don't have all the answers, I did meet with a BK Attorney in 2007 to discuss a possible Chapter 13 but was able to avoid it but looking back now I should have just did it. Well based on my salary he said that would be my only option, and I am thinking the same still holds true since my salary is more than it was then.

My questions:

-I need a new reliable car to get to work, buy used or new? I would be modest either way, no luxury brands and nothing top of the line.
-What about that 90 day period prior to filing? I read and was told to not use my credit cards 90 days prior, I only used two of the cards the past 90 days but I could stop using them and file in 2013.

-Most of the debt is unsecured credit cards are the bulk of it, the leased car I understand could be kept but it's unclear to me? We rent so no mortgage payments and no past liens or debt.

-My wife's student loan which is secured, would that be wrapped up in the repayment plan or would it mean it would hit the means test to lower my monthly payments. I am thinking if I file, she will as well right?

-The BK Attorney I met with in 2007 said that I am "100% repayment", no means test was ever calculated since it was a free consultation, I look at our total debt I am guessing it's around $50 to 60K, with around 16K of that in student loan debt which I read can't be wrote off. A 5 year plan equals $1K/month, thing is I could afford to pay that without filing but the interest rates of my cards makes it impossible so I believe I have little option now but to look into filing.

I am concerned about future consequences, but feel I did the best I could and the job loss was uncontrollable and hope that any future job opportunities are not destroyed by filing. Even if it's illegal to discriminate, I feel some companies do it because they check your credit history for what reasons I don't know.

Thanks for any insight.

[LadyInTheRed]

Welcome to BKforum! You are not the first to come here saying they wish they had filed BK years ago.

Before surrendering to a Chap 13, check to make sure your income is over median for your state and household size: http://www.justice.gov/ust/eo/bapcpa...come_table.htm

If you are over median income, you still might qualify for a Chap 7. Try the means test calculator at http://www.legalconsumer.com/bankruptcy/means-test/

You can buy either a used or new car as long as you keep the payment reasonable. I bought a new car and included a maintenance agreement in the financing so I wouldn't have to worry about paying maintenance during my Chap 13. I know the maintenance agreements are usually a rip off. But, in my case, not buying the maintenance agreement would have just increased the amount I am paying to unsecured creditors.

Many attorneys will have you wait until all credit card charge are over 90 days old. That is the safest course of action, but is not necessarily required. I posted earlier today about the 90 day rule in this thread: http://www.bkforum.com/showthread.ph...edit-card-debt

I am pretty sure you can keep leasing the car, but I don't have experience with leases. One thing you need to plan for is what you will do if the lease expires before you complete your Chap 13.

How student loans are treated in a Chap 13 varies. You need to discuss that with an attorney familiar with the local trustees.

Don't rely on the consultation you had 5 years ago. Make appointments for consultations with 2 or 3 attorneys to get advice based on your current situation.

[keepsmiling]

One consultation from five or more years ago isn't much use at this point. That guy might have even been WRONG. He wouldn't have been the first. But it does no good to fret on that now, what's past is past.

So, you lost your job but found another making more? what's your insurance situation? do you own a home?
If your credit is not yet too trashed...
If you can finance a car, you will be in a better position than owning one outright unless you can somehow exempt your equity. Florida has very generous home exemptions but very stingy everything else. You might want to look up the value of your paid off car.

Make at least 3 appointments for consults. If you want to talk about your income/expenses, people here are pretty good at tweaking and critiquing.

[ccmisery]

Welcome to BKforum! You are not the first to come here saying they wish they had filed BK years ago.

Before surrendering to a Chap 13, check to make sure your income is over median for your state and household size: http://www.justice.gov/ust/eo/bapcpa...come_table.htm

If you are over median income, you still might qualify for a Chap 7. Try the means test calculator at http://www.legalconsumer.com/bankruptcy/means-test/

You can buy either a used or new car as long as you keep the payment reasonable. I bought a new car and included a maintenance agreement in the financing so I wouldn't have to worry about paying maintenance during my Chap 13. I know the maintenance agreements are usually a rip off. But, in my case, not buying the maintenance agreement would have just increased the amount I am paying to unsecured creditors.

Many attorneys will have you wait until all credit card charge are over 90 days old. That is the safest course of action, but is not necessarily required. I posted earlier today about the 90 day rule in this thread: http://www.bkforum.com/showthread.ph...edit-card-debt

I am pretty sure you can keep leasing the car, but I don't have experience with leases. One thing you need to plan for is what you will do if the lease expires before you complete your Chap 13.

How student loans are treated in a Chap 13 varies. You need to discuss that with an attorney familiar with the local trustees.

Don't rely on the consultation you had 5 years ago. Make appointments for consultations with 2 or 3 attorneys to get advice based on your current situation.

I am over the median for Florida, but I did not do the means test calc yet. What concerns me is if I do have to file 13 and say my payments are $1K/month, if it's due the first of the month when my rent is due, then I will be broke for 2 weeks till I get paid, no money for gas to get to work or money for food. I know the means test will answer a lot of this, I just don't know if I can afford 13 with two car payments and etc but I need a car to get to work. Also the leased car decision was not a good one, won't do that again while it's nice having a new car with all the maintenance taken care of, if I do file 13 it will leave us with one car after the lease is up and if my wife finds a job that's another problem with her getting to work. Budgeting has always been hard for us, I can see that this will have to be done with a lot of sacrifices.

[keepsmiling]

I think you are misunderstanding how your payment will be calculated. This is why you need to do the means test.
Your new car payment will be PART of your bk payment. In other words, what you pay for the car is subtracted from what unsecured creditors will get. So IF your payment was 1000/month (not sure where you are getting this number) then maybe half might be for the car. Does that make sense?
Isn't that a nice surprise????

[ccmisery]

One consultation from five or more years ago isn't much use at this point. That guy might have even been WRONG. He wouldn't have been the first. But it does no good to fret on that now, what's past is past.

So, you lost your job but found another making more? what's your insurance situation? do you own a home?
If your credit is not yet too trashed...
If you can finance a car, you will be in a better position than owning one outright unless you can somehow exempt your equity. Florida has very generous home exemptions but very stingy everything else. You might want to look up the value of your paid off car.

Make at least 3 appointments for consults. If you want to talk about your income/expenses, people here are pretty good at tweaking and critiquing.

Yes, I need to meet with some attorneys again.

I am making less than I made 6 months ago, not a substantial amount but I am still above the median for 13 in Florida.

My credit is good still, I only have 3 cards that are past due less than 90 days but I think with the amount of debt I have it hurts my APR rate.

We do not own a home, renting currently and we both have no health insurance either, I will after the 90 day probation period ends, but I will have to pay my wife's 100% which will cost me around $300+ a month as the company does not have good spouse coverage.

My car is in good shape but the transmission may go anytime as its a ticking time bomb, to repair it would cost more than what the car is worth. It would be a chance situation to keep it for the duration of the 3 or 5 year plan and not have reliable transportation to work. The lease was a mistake and a reason why we are in financial trouble, long story, but if I could keep the lease and finance it which I already know won't happen during a 13 as I have 2 years left on it and would be in the middle of a 13 at the time, they probably won't approve me or would give me a very high APR correct?

I read this about the car situation and I am totally confused because it say's I am an "abuser".

http://robertweed.com/blog/before-bankruptcy/before-bankruptcy-dont-pay-off-the-car/

Currently the lease payments are $350/month, I don't know if I could purchase another car at that same monthly rate or not? Usually leasing equals lower monthly payments, even for the most modest car.

[keepsmiling]

You are misunderstanding that article. He is advising you to read between the lines and buy the car. He's explaining the bass ackward logic of bk.
I'd start looking at car loans asap before your credit is completely shot, and call a few lawyers on Monday.
Could be you could even swing a 7. Remember that your health insurance payment will be deducted from your dmi.
Don't file til your insurance kicks in.

[ccmisery]

I got it, my situation with the leased car is something I will have to discuss with the lawyers, since the courts may look down on having two car payments with only one person working full-time. I do have the option to finance it, not sure if that's the best plan right now?

I would more than likely file in 2013, I have used my one credit card quite heavily the past few months and ran up the debt $3K till I got a job.

[LadyInTheRed]

Definitely talk to a few lawyers before you do anything. If you don't pass the means test now, financing a car could help you pass. If you end up in a Chap 13, you want a car that will last you the entire 60 months. Assuming you have as much DMI to go to a plan payment as you think you do, the car payment will reduce what goes to unsecured creditors. The message to take from that article is when you talk to attorneys, don't ask them if you should finance a car. Instead, ask how financing a car before filing BK will effect the BK.

[keepsmiling]

I got it, my situation with the leased car is something I will have to discuss with the lawyers, since the courts may look down on having two car payments with only one person working full-time.

I tend to doubt that.
I think it's generally accepted nowadays that people have cars. You need one to look for a job too.
Unless you live in NYC.

[ccmisery]

Well I just checked my credit karma credit score, not that it's extremely accurate it was over 700 3 months ago, but two of my creditors reported me late on payments and I suspect a third will soon report, now my scores shows as poor 630 range, not good for a car loan. Amazing how you pay on time for years, miss a few payments and your in a world of hurt, I might have to get them up to date and rebuild my credit score then file in 6 months or so. I don't want to pay absurd interest rates for 60 months.

I see now that this will take some time, I am just worried my wife's debts will haunt me as I can in no way pay hers on top of mine now. I suspect she has 3 or 4 more months before they go to collections. Am I liable being we are married, though the cards are in her maiden name?

[keepsmiling]

You may be able to lower the interest rate in your 13. Could be more good news.
Keep reading and start making lists of lawyers to call.

[AngelinaCat]

You definitely need to do several consultations. We were trying for a Ch13, until I lost my FT job. When that happened, there was no way we could do a 13.