Newbie

[xoxoamandajo]

Hey all, newbie here. As much as I appreciate reading everyone's advice and stories, I'm sorry to have come across ya'll on this type of forum. I'm not sure about anyone else, but just trying to research all of this has me exhausted and my anxiety through the roof.
I honestly I have no idea what I should do at this point. I am about $30k in credit card debt. My min monthly payments are $926. My mortgage is $787. Utilities run me about $400. So monthly payments for everything is roughly $2100. I only clear $1558 monthly and my minor daughter gets $749 in SSI. I just purchased my house a year ago and had several things go wrong that needed repaired. I make just enough over the limit to get assistance of any type, so I've racked up a lot of credit debt with things like purchasing food, gas for the car and necessities like school/work clothes, with a family of 4. My spouse became disabled almost 4 years ago and lost the SSI appeals and is now reapplying. Needless to say, I feel like I am drowning. I was doing fairly good to make ends meet and was using some student loan/grant refunds to help make min payments. I just started missing payments within the last month.
I am seriously considering Chapter 7 but have worried myself sick over whether it's even possible or not. I have an uncle who passed away and I will be given his car, free and clear, so there won't be any payments, just insurance. I don't currently own any cars, mine broke down and I sold it last month and used the money I got from it to go towards the credit cards. I'm aware of the 90/70 day rule and trying to figure out how to go about all of this so I don't have to worry about creditors objecting. I also have a concern about tax refunds. What happens when tax time comes and I get a refund in March/April? My understanding is I wouldn't get to keep that if I file Chapter 7 that summer, is that correct? That's another issue as that money is already owed to my grandmother and mom for helping me out with the house and several other issues over the year and the agreement is that I have the refund deposited into mine and my mother's joint bank account so that she can distribute it where it needs to go. Am I setting myself up for failure here? I'm to the point where I don't think I can keep making the min payments anymore and find myself checking cards to see what's available so that I can use it to put towards another bill, which I know is ridiculous in itself.
Also, I truly don't have anything to sell to generate $ to pay any bills, when we moved we had experienced a leaking basement and lost a ton of stuff and didn't have renter's insurance.
Also, a part time job, even uber, is not an option. My children and I receive medical assistance. If I make $25 more a month, then we no longer qualify and I cannot afford the monthly insurance of $125 a month, plus monthly copays of $80 and meds an additional $60(using the goodrx coupons). I also receive daycare assistance that I will lose and that is another $700 monthly bill that I cannot afford.
Does anyone have any constructive (please not harsh, I'm not sure I'm mentally or emotionally stable for it at this time) criticism/advice/suggestions? Part of me wants to just quit making the monthly min payments and not even try, but I worked so hard to clean my report up so I could buy the house and I feel like I have went 150 steps backwards and afraid I'm going to lose everything.
Also, I'm not telling any family I'm even considering filing Ch. 7...things are rockier than ever with family and that would only create more problems that I simply can't handle right now.

[Layla55]

I am sure no one will be harsh on you here, to many can relate. I wish I could advise you but I’m not educated enough on bk . I just want to say glad your here and you will get some advice from others more informed. I would suggest you research exemptions in your state for cars and homes . That helps understand what you might have to give up or what’s protected . How much home equity etc. good luck going forward!

[justbroke]

Welcome to BKforum. Hopefully others will chime in and help you think about what to expect and how to cope with the anxiety of the unexpected. There are many of us here who have been through this process once; some of us twice. It can be nerve wracking, but most will tell you that the filing bring instant relief, while the discharge brings the feeling of hope and renewal.

I don't think that you'll have any issues with getting a Chapter 7 filed.

I'll answer some of your questions now. As for your tax refund, you may be able to exempt this. This is especially true if the money is from the Earned Income Tax Credit (EITC). You may have enough exemptions to cover it (but I can't tell you that for sure). It's not as simple as just saying they will take all, some or none of your tax refund. It depends on exemptions.

I think that getting rid of those $925+ monthly credit card (and loan) payments would certainly help you. I would keep asking questions here and may be split up your messages. Some people will shy away from long paragraphs.

Again, welcome.

[xoxoamandajo]

I am sure no one will be harsh on you here, to many can relate. I wish I could advise you but I’m not educated enough on bk . I just want to say glad your here and you will get some advice from others more informed. I would suggest you research exemptions in your state for cars and homes . That helps understand what you might have to give up or what’s protected . How much home equity etc. good luck going forward!

Thank you for being so kind and understanding. I am trying like crazy to wrap my mind around all of this mess! I did find out that 1 house and 1 car is exempt and equity definitely isn't an issue. I have a USDA mortgage and the majority of my payments goes towards interest so in a year I've paid MAYBE $1,000 towards the actual principal if I'm lucky.

Thank you again!!!

[xoxoamandajo]

Welcome to BKforum. Hopefully others will chime in and help you think about what to expect and how to cope with the anxiety of the unexpected. There are many of us here who have been through this process once; some of us twice. It can be nerve wracking, but most will tell you that the filing bring instant relief, while the discharge brings the feeling of hope and renewal.

I don't think that you'll have any issues with getting a Chapter 7 filed.

I'll answer some of your questions now. As for your tax refund, you may be able to exempt this. This is especially true if the money is from the Earned Income Tax Credit (EITC). You may have enough exemptions to cover it (but I can't tell you that for sure). It's not as simple as just saying they will take all, some or none of your tax refund. It depends on exemptions.

I think that getting rid of those $925+ monthly credit card (and loan) payments would certainly help you. I would keep asking questions here and may be split up your messages. Some people will shy away from long paragraphs.

Again, welcome.

Thank you!!! From what I can tell, I qualify for Chapter 7. The tax refund is what is giving me the biggest anxiety right now and trying to figure out a timeline. I know I have to stop using the cards before filing but I also know that without charging things here and there, the kids won't have a holiday and won't have groceries in the house either. I'm just not sure if I should quit paying them altogether or what to to. I had no idea refunds could be exempt and the majority of the refund does come from EITC.

Thank you for the helpful advice. I hate to make multiple posts and seem rude for doing so, but I will take your advice and see if that helps! Thank you for being so kind!!!

[justbroke]

I need to clarify. EITC exemption depends on the State in which you file. I know that in my district court of appeals (11th Circuit), EITC is considered a public assistance and is protected. I don't know if it's the same in W Virginia.

Ask as many questions as you want and open as many threads (so long as they are not repetitive questions). You are not bothering anyone and it's not impolite, here, to ask questions! You'll find that the more you participate and ask questions, the more "online" friends you'll have here on BKforum.

[spr250]

Welcome to the forum. I am a recent filer. First thing first. You need to consult a lawyer. Most first consults are free. As for owing family. Doesn't matter. It will technically be wiped out in the bankruptcy. EVERY DEBT has to be listed. Family debts are more of under the table payback AFTER you are discharged. Since you haven't filed yet, you will be smack dab in the middle of tax season. Since there are disabilities involved, it may help. There are federal and state laws that may help. Your atty can help with that. Trust me, I know how nerve racking this decision is. Couple things though. As much as it may suck, you would need to stop paying bills a month or two before filing. Otherwise the trustee can yank them back. The only ones you should continue are normal day to day bills like utilities, house (if you will reaffirm the loan), clothes and food. For family, talk to them. Let them know what you are doing. They may be more understanding then you know. But thats your call. My mom helped me with my payment to the lawyer but understands fully that zero payback will happen after discharge. You see, even if you do get to keep you tax refund. Other than needed household items, you cannot pay anybody off using it. My advice is to do this,

1. Consult with a bankruptcy lawyer.
2. Tell your family you are thinking of filing. (atleast the ones you owe)
3. Doesn't matter what they think, its what is possibly best for you.
4. File.
5. Simply wait for your 341 meeting
6. Follow the steps of your atty and deal with what the trustee wants to do.
7. Receive discharge.
8. Once fully discharged/closed, then pay back family.
9. DO NOT FALL BACK INTO THE CREDIT CARD GAME. I know that last one may be harsh but with your highly fixed income, CC may not be a good safety net and just may end up in the same boat. At the least, maybe one. Low limit. one that can be paid off in 2-3 months max. So $500 -$750.

Bankruptcy is meant to start fresh and build anew. Nobody wants to end back up here. I understand the anxiety, everyone here does.

As for making multiple post, please do. The fine folks here are wonderful and knowledgable. At the very least, understanding and willing to listen.

[xoxoamandajo]

I need to clarify. EITC exemption depends on the State in which you file. I know that in my district court of appeals (11th Circuit), EITC is considered a public assistance and is protected. I don't know if it's the same in W Virginia.

Ask as many questions as you want and open as many threads (so long as they are not repetitive questions). You are not bothering anyone and it's not impolite, here, to ask questions! You'll find that the more you participate and ask questions, the more "online" friends you'll have here on BKforum.

Thank you again for your help and I will be sure to look into WV and see what applies here!

[xoxoamandajo]

Welcome to the forum. I am a recent filer. First thing first. You need to consult a lawyer. Most first consults are free. As for owing family. Doesn't matter. It will technically be wiped out in the bankruptcy. EVERY DEBT has to be listed. Family debts are more of under the table payback AFTER you are discharged. Since you haven't filed yet, you will be smack dab in the middle of tax season. Since there are disabilities involved, it may help. There are federal and state laws that may help. Your atty can help with that. Trust me, I know how nerve racking this decision is. Couple things though. As much as it may suck, you would need to stop paying bills a month or two before filing. Otherwise the trustee can yank them back. The only ones you should continue are normal day to day bills like utilities, house (if you will reaffirm the loan), clothes and food. For family, talk to them. Let them know what you are doing. They may be more understanding then you know. But thats your call. My mom helped me with my payment to the lawyer but understands fully that zero payback will happen after discharge. You see, even if you do get to keep you tax refund. Other than needed household items, you cannot pay anybody off using it. My advice is to do this,

1. Consult with a bankruptcy lawyer.
2. Tell your family you are thinking of filing. (atleast the ones you owe)
3. Doesn't matter what they think, its what is possibly best for you.
4. File.
5. Simply wait for your 341 meeting
6. Follow the steps of your atty and deal with what the trustee wants to do.
7. Receive discharge.
8. Once fully discharged/closed, then pay back family.
9. DO NOT FALL BACK INTO THE CREDIT CARD GAME. I know that last one may be harsh but with your highly fixed income, CC may not be a good safety net and just may end up in the same boat. At the least, maybe one. Low limit. one that can be paid off in 2-3 months max. So $500 -$750.

Bankruptcy is meant to start fresh and build anew. Nobody wants to end back up here. I understand the anxiety, everyone here does.

As for making multiple post, please do. The fine folks here are wonderful and knowledgeable. At the very least, understanding and willing to listen.

Thank you for your wonderful suggestions. Unfortunately, talking to family is absolutely not possible what so ever. The relationship we have is extremely strained as is and this will create more problems with my family. I called a few lawyers but they are charging $250 just for a consult in this area!!! Ridiculous. My local legal aid office has a hotline number that can be called on Tuesday evenings to ask generic questions so I'm going to give it a try this evening and see what happens. I know I could qualify for assistance with them in filing, however they are extremely strict on their guidelines you have to follow and are quite nasty to even speak with. I'm hoping the hotline will be of better help! I'm trying to hold out until summer to see if there is some way possible to dig myself out of all of this, that's what makes things harder with the tax issue because that money will already be gone by that point.

[TomJ1]

Thank you for your wonderful suggestions. Unfortunately, talking to family is absolutely not possible what so ever. The relationship we have is extremely strained as is and this will create more problems with my family. I called a few lawyers but they are charging $250 just for a consult in this area!!! Ridiculous. My local legal aid office has a hotline number that can be called on Tuesday evenings to ask generic questions so I'm going to give it a try this evening and see what happens. I know I could qualify for assistance with them in filing, however they are extremely strict on their guidelines you have to follow and are quite nasty to even speak with. I'm hoping the hotline will be of better help! I'm trying to hold out until summer to see if there is some way possible to dig myself out of all of this, that's what makes things harder with the tax issue because that money will already be gone by that point.

Your family will find out when they receive notice of your filing. You will have to list them as creditors.

[xoxoamandajo]

Your family will find out when they receive notice of your filing. You will have to list them as creditors.

Yeah, that's not happening. Thank you for letting me know, I will have to find some other way around all this mess. Family being involved in this would be way worse than dealing with lawsuits and wage garnishments.

[spr250]

Unfortunetly, it may not be an option. There is a gray area. My mom paid for my filing. If it was a loan, I had to list it and it gets discharged. The other option its considered a gift with no intention of paying back. Even my atty told me that they know we pay our family back despite what we say but included or not its discharged anyways. So pay back has to be done AFTER discharge. As for using your taxes, thats something you need to discuss with your atty. For me, mine is protected. I think its either due to the amount and EITC or due to my states $15K wildcard. At the end of the day, you have to do whats best for you and other family second. Even if that means paying them back at a later date.