New With Questions

[STU33828]

My husband and I are looking into filing chapter 7. We make more than the median income but our debts versus are income are in the negative so she said we could do chapter 7. We have about 20k in cc debt and that is the maing reason we are filing. They are going to garnish my husbands wages and we can't afford it. We have a home and two cars that we really want to keep. Is it possible to keep both cars and home? I live in GA so if anyone has recently filed and has this situation it would be helpful.

Thanks

[SinkingFast]

Hi and Welcome to the Forum!!

Not meaning to sound rude here. Just some thoughts for you to consider.

You didn't say how many in your family, but,............. Being over the Median with only $20K in CC debt indicates you may have bigger problems than filing BK will fix. That's if you're dead set on hanging onto the house and the cars.

You need to step back and take a serious look at your finances. Prioritize. Look realistically at how much you are paying to live in that house and drive those cars. And I'm not talking about payments, but other areas of your life. Food, clothes, medicals, etc.

If you're like many of us here, your CC debt is "life" expenses you've charged up because of the house and the car payments. Car repairs you have to charge because you can't pay cash. Doctor bills you have to charge because you can't pay cash. Maybe even food and gasoline charged if things are really tight, because you can't pay cash.

[juststupid]

Welcome...

Sinking is right you need to take a step back and look at where your money is going and if you really can afford the house and cars. And if you really want to keep them you need to make sure that you can afford them. Because since your husbands wages are going to be garnished that means you've stopped paying certain bills. And even if you've stopped paying those bills and you still don't have enough money for the regular bills than maybe you need to consider down sizing.

[BKTango]

Exactly how much more than the median income do you make? That will be a consideration. If it's a substantial amount than you more than likely will be unable to file a chapter7. If you are slightly over the median if comes down to a totality of circumstances of your schedules. However, as others have stated, if you are not paying your debts that you wish to have discharged, and you are still showing a negative, then you really need to have a reality check on your expenses. That being said, to your orginal question, in a chapter 7 you may keep your cars and home as long as they fall under your states exemptions, and you are not in arrears on the loans.

[spell]

OK, I'll add to the pile. But here are some smileys to show we all really care.
<--- that's you fighting debt.

Have you met with an attorney yet? There's a big difference between running the means test and failing the means test. The distinction comes down to allowable household expenese, not debt to income ratio exactly.

But, as others have pointed out, to really get the fresh start from bankruptcy, you may want to get rid of your cars or maybe even home.

What % of your takehome pay is your mortgage payment? Is it on a fixed or adjustible loan?
How old are your cars? How soon will they be paid off? How old were your last two cars when you bought these?

I'd highly recommend a cash and carry lifestyle for at least a few months prior to filing. You'll get a very real understanding of what life will be like without the unsecured debt, while still making your car and house payments. Be open to the idea that you may not be able to keep these.

[JRScott]

I'm going to go with the above comments and add some.

First off I had a friend this past Sunday loan me a great book, wish I'd gotten this book 7 years ago and maybe I wouldn't be where i am today. It is called, Financial Peace, by Dave Ramsey. I would recommend getting a copy and reading it, I"m about a third done now and its a very good book.

Okay I'm not sure but if they are garnishing wages I'm assuming you haven't been paying some and paying others, yeah we all make that mistake. I'm also assuming that its been a year or so since you paid some of them...since they are just starting to come after me .......

20k of CC debt probably means around 600 dollars minimum payments a month or in that ballpark. So even if you weren't paying this 600 dollars, and assuming the cars and house are also financed can you meet all your other obligations? Do you have any other loans out for electronics, furniture, etc?

Bankruptcy as the others pointed out isn't just getting rid of the debt, its also about realising that we've made bad choices and as Dave Ramsey puts it have stuffitis. We have to examine our lives and see where we need to improve to find financial peace after the bankruptcy, cause once you go through it you can't do another one for ten years.

Now assuming you own your cars, GA allows a 3500 dollar exemption for vehicles. Assuming older cars (pre 1990 or so) you might could keep both, otherwise plan on surrendering at least one of them possibly both.

I'm not going to assume you own the house outright .

[STU33828]

Thanks for the input. The garnishment has not started yet (probably not until July), it is for a credit card my husband had and stopped paying on about 3 years ago. I think they waited so long is because now he is on the house deed and was not before. I did talk to a lawyer and she said we could file due to the income defecit and it does not show abuse, whatever that means. I know once all of the debt that can be discharged is (about $850 per month) we can afford both cars. We do not want to give up our house for sure, our rate is fixed and it costs almost as much to rent as it does to own, plus the tax benefits. I have just recently got behind on our credit card bills 2 are currently thirty days late. We had some money in saving that I was keeping up everything with until now. I/we have learned our lesson about living above our means. We are going to do our best to keep both cars because we both need a way to work. Thanks for the support. This is scary and is really the last thing I want to do.