I have to make a decision fast in order to start saving for attorney fees, but maybe you will discourage me from filing. I hope the folks with expertise can advise what's best in my situation.
Currently I owe $61,000 in student loans (I understand this debt is untouchable), about $26,000 in car loans, $41,000 in credit card debt (now with Advantage CCS), and about $20,000 in business loans. This is a total of about $148,000 worth of debt. I work in my own company with a 50/50 partner. We have quite a few employees, but the company may not be profitable for at least 3 years, while we do expect to break even during that time. My partner and I can't give each other raises because our payer is the state, and the payments for our services are capped. I make $52,000/year, and for the last 8 months or so I have been working an average of 10 hours of overtime. This will put me at approximately $72,000 if I continue doing extra work. We are trying to take away some of my tasks by hiring someone who can take over some of my duties. This will free me up to do more of my job, and I can have a sane 40-hour week. My wife makes about $40,000 per year at the current rate.
Currently, my portion of expenses is around $3,250 - $3,500 per month, which includes student loan payments, food, my car payment, half of rent, most needs and my child support payments. An additional $1,000 goes to Advantage CCS for the credit card debt. I started their program in March of 2014. My spouse contributes about $1000 toward bills, which pay for the other car, half of rent, half of groceries, etc. So we spend a total of $5,000 to $5,500 per month before we have some discretionary cash.
We net about $6,900 ($3,900 (me after child support) and $3000 (spouse)) between the two of us right now. My spouse pretty much gets to keep all the left overs, because most of our debt is in my name. Both of the cars are in my name, too.
Of the $41,000 of credit card debt, $25,000 is for AmEx. All would be well and good if we continued this way. However, there are a few important factors that make the situation complicated.
1. I couldn't make my last AmEx charge payment of $6,000 before joining the repayment program with Advantage, which is now 120+ days past due. Advantage states that they will keep me in the program, but American Express keeps insisting that they will report me as delinquent for the entire 4 years I am in the consolidated program.
2. My overtime may go away if we hire someone else to help with my duties. This means that my income will go down to $52,000.
3. Our relationship is a bit shaky, and my spouse may leave, which will leave me with full expenses and the second vehicle that the spouse plans to abandon.
I am at my absolute limit when it comes to being able to cover my bills, and I can only sustain this with my spouses share of the bill payments.
The question is does it make sense filing for Chapter 13 in my case? I don't want to touch or tarnish my business at all, by the way, because the business is paying on my share of the business debt. I have a solid 4+ year payment history on everything. The only thing that will destroy my credit is the continuous AmEx negative reporting, because they sold the account to NCO and won't re-age even if I came up with $6K of the $25K to pay the past due. From what they are saying, they will continue reporting 120, 150, 180, 210, etc. days past due on my credit history for AmEx until the full $25,000 is paid in full through Advantage. I almost paid the retainer fee to an attorney today to help me with Chapter 13, but I then checked my credit history with Equifax. I failed to pay the last payment in March, and so this is what the most recent report says:
Comments: Payments managed by financial counseling program,
Current Status: 120+ DAYS PAST DUE
2014: Apr - 30 (past due), May - 60, Jun - 90, and nothing else
It appears that the reporting stopped. So this is the only thing that's freaking me out. Should I wait to see if the AmEx reps were just scaring me and the reporting will look like this from now on without changes? Or should I take the Advantage CCS payment and pay it to the lawyer for the retainer?
I realize this is long-winded, but I really need help in making a decision. I am afraid that my arrangement under Chapter 13 might put me in an even worse situation. Just trying to make the least harmful choice.
Thank you in advance!
Currently I owe $61,000 in student loans (I understand this debt is untouchable), about $26,000 in car loans, $41,000 in credit card debt (now with Advantage CCS), and about $20,000 in business loans. This is a total of about $148,000 worth of debt. I work in my own company with a 50/50 partner. We have quite a few employees, but the company may not be profitable for at least 3 years, while we do expect to break even during that time. My partner and I can't give each other raises because our payer is the state, and the payments for our services are capped. I make $52,000/year, and for the last 8 months or so I have been working an average of 10 hours of overtime. This will put me at approximately $72,000 if I continue doing extra work. We are trying to take away some of my tasks by hiring someone who can take over some of my duties. This will free me up to do more of my job, and I can have a sane 40-hour week. My wife makes about $40,000 per year at the current rate.
Currently, my portion of expenses is around $3,250 - $3,500 per month, which includes student loan payments, food, my car payment, half of rent, most needs and my child support payments. An additional $1,000 goes to Advantage CCS for the credit card debt. I started their program in March of 2014. My spouse contributes about $1000 toward bills, which pay for the other car, half of rent, half of groceries, etc. So we spend a total of $5,000 to $5,500 per month before we have some discretionary cash.
We net about $6,900 ($3,900 (me after child support) and $3000 (spouse)) between the two of us right now. My spouse pretty much gets to keep all the left overs, because most of our debt is in my name. Both of the cars are in my name, too.
Of the $41,000 of credit card debt, $25,000 is for AmEx. All would be well and good if we continued this way. However, there are a few important factors that make the situation complicated.
1. I couldn't make my last AmEx charge payment of $6,000 before joining the repayment program with Advantage, which is now 120+ days past due. Advantage states that they will keep me in the program, but American Express keeps insisting that they will report me as delinquent for the entire 4 years I am in the consolidated program.
2. My overtime may go away if we hire someone else to help with my duties. This means that my income will go down to $52,000.
3. Our relationship is a bit shaky, and my spouse may leave, which will leave me with full expenses and the second vehicle that the spouse plans to abandon.
I am at my absolute limit when it comes to being able to cover my bills, and I can only sustain this with my spouses share of the bill payments.
The question is does it make sense filing for Chapter 13 in my case? I don't want to touch or tarnish my business at all, by the way, because the business is paying on my share of the business debt. I have a solid 4+ year payment history on everything. The only thing that will destroy my credit is the continuous AmEx negative reporting, because they sold the account to NCO and won't re-age even if I came up with $6K of the $25K to pay the past due. From what they are saying, they will continue reporting 120, 150, 180, 210, etc. days past due on my credit history for AmEx until the full $25,000 is paid in full through Advantage. I almost paid the retainer fee to an attorney today to help me with Chapter 13, but I then checked my credit history with Equifax. I failed to pay the last payment in March, and so this is what the most recent report says:
Comments: Payments managed by financial counseling program,
Current Status: 120+ DAYS PAST DUE
2014: Apr - 30 (past due), May - 60, Jun - 90, and nothing else
It appears that the reporting stopped. So this is the only thing that's freaking me out. Should I wait to see if the AmEx reps were just scaring me and the reporting will look like this from now on without changes? Or should I take the Advantage CCS payment and pay it to the lawyer for the retainer?
I realize this is long-winded, but I really need help in making a decision. I am afraid that my arrangement under Chapter 13 might put me in an even worse situation. Just trying to make the least harmful choice.
Thank you in advance!
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