totally screwed up, texas poster

[rymetymeuk]

Hey all

I have approx $230K in unsecured debt due to gambling addiction and I lost $110K in the stock market.
I make $140K a year including bonuses.

I am at my wits end and will miss my first payment for a loan tomorrow. I have cash advances due to the gambling recently and I don't know what I should do.

I always intended on making the payments, I have good income but I kept feeding my stock market account and I kept losing it.

Does anyone have any advice for a Texas debtor who now can't meet all the monthly payments?

I own a house, have two kids, and around $100K in equity.
Thanks so much all, I'm seeking help from gamblers anonymous and have banned myself from the nearest casinos.

[LadyInTheRed]

Welcome to BKforum!

You are fortunate to be in Texas which is very debtor friendly. You have an unlimited homestead exemption and your wages can only be garnished to pay child support, alimony, taxes and student loans. So, if a creditor gets a judgement against you they will have to go after other assets like bank accounts and investment accounts. But, you don't have to worry about that for a while. You have some time figure out how best to move forward, even if you stop making all unsecured debt payments now.

First, follow through with getting help for the gambling. Nothing you do will help if you don't get that under control in a sustainable manner. Gambling includes stock market investing. I suspect you were trying to beat the market. Most people don't do that for long. If you still have a stock portfolio, have an investment manager mange it for you. Don't beat yourself up for the past. Move on and focus on not repeating your mistakes.

Second, stop using credit. If you have to default on unsecured debt payments to do that, so be it. You will start getting calls from creditors. Read posts in the collections forum for tips on how to deal with them. The important things to remember are that it is the caller's job to scare you into paying, you don't have to talk to them and you don't need to and shouldn't make any agreements with them unless it is in exchange for a significant reduction in debt pursuant to a written agreement. If you arm yourself with knowledge, they won't be able to intimidate you.

Third, set a budget and live by it. Make sure it includes savings.

Finally, you have a decision to make. Do you want to plan for a BK filing or try to tackle the debt without bankruptcy? Can you stop using credit and realistic pay off your existing debt in 5 years? Do you have non-exempt assets that can help? You lost a lot of money in the stock market. Do you still have stock you can sell so you can use the proceeds to try to negotiate settlements of your debt? Even if you do, BK could still be a better option depending on how much you have in non-exempt assets and whether you can settle with enough creditors to avoid BK. Don't forget that debt "forgiven" in a settlement is taxable income. Learn all you can about bankruptcy. Consult with a few bankruptcy attorneys (most give free consultations) and ask questions here.

If you can qualify for a Chap 7, which may be difficult with your income but is not impossible, your non-exempt assets would be used to pay your unsecured debts. You can read about Texas bankruptcy exemptions at http://www.nolo.com/legal-encycloped...xemptions.html.

If you file a Chap 13, you will pay all of your disposable income to the Chap 13 trustee during a 60 month plan. If you have non exempt assets, you can keep them if your disposable income is high enough to to allow your Chap 13 plan to pay at least the value of your non-exempt assets to unsecured creditors. That is called the Chapter 7 liquidation test because it is more accurate to say that creditors must receive in your Chap 13 at least what they would receive if your non-exempt assets were liquidated in a Chap 7 (which is really less than the value of the assets because the trustee gets a commission).

If you have enough income to afford your mortgage and car payments and pay your living expenses if it weren't for payments on unsecured debt, then a Chap 13 payment should be manageable even if you may have to sell some non-exempt assets during the plan to make ends meet.

If you do have stocks that you can't exempt, you should talk to attorneys about moving them into an IRA that would be exempt in BK. But, don't do that or make any other transfers of assets in anticipation of bankruptcy or any other debt resolution strategy without first talking to bankruptcy attorney.

I hope that helps as a starting point for learning about your options.

[rymetymeuk]

Thank you very much for you reply, it's truly appreciated.
I'm seeing a lawyer tomorrow and am more than happy to pay what I owe, I just need it structured so I think ch 13 may well be my key.
I don't have any assets to liquidate apart from the house so I'll see what they suggest.
Thanks so much again

[LadyInTheRed]

I'm seeing a lawyer tomorrow and am more than happy to pay what I owe, I just need it structured so I think ch 13 may well be my key..

If you can qualify for a Chap 7 you should file a Chap 7 unless there is a good reason for a Chap 13. If you file a Chap 13, the goal should not be to try to pay all that you owe. You should pay only what you can afford to pay during the 60 month plan. You have a lot of debt. Creditors took a risk in lending you so much. They can handle the loss. It's a part of doing their business. Don't feel a moral obligation to pay more than you can afford.

[rymetymeuk]

thanks for the replies. I went to see the attorney and I am not eligible for Ch 7, so it looks like i'll have to do ch 13.
I have a lot of disposable income and it will actually be a full pay in the end it seems. either way it's ok, just gotta get on the plan asap..
thanks a lot for the replies, appreciate it!