Newbies Here! Contemplating Chapter 7 - help please

[TheBrokeCouple]

Hi there all...

I've been looking into chapter 7 and found your site a few weeks ago. I've been doing a lot of reading, and still have a question about our chances at success with chapter 7. Here's the scenerio. Hubby doesn't work...hasn't since dtr born 2 years ago (this was our choice). We were fine, so we thought, and then realized we've been dipping into our cc overdraft time and time again just to make ends meet at the end of the month. Now, hubby can't get job...I'm working 40+hrs each week...two kids, one with special needs (autism), another with developmental delays. We are stressed beyond belief and know we could be okay if we didn't have all of this unsecured debt.

Chase #1 cc - $8157..0 @ 21.74%
Chase #2 cc - 9825.38 @ 29.99%
MBNA cc 15,000 @ 29.99%
House - 82,486 30 yrs fixed, 9.6% worth 85,000 (current on pay)
Walmart - 1200 (current on pay)
Medical bills - 5,000 ( 1 just went to collection)
2005 Chrysler T&C van - owe 24900 - Kelly Blue Book 18,900 (current on payments)
Attorney fees for adoption proceedings we didn't win - 2600 (pay $25 per month)
School loan (government) I know cannot be discharged - 22000


Income: 3818.00/monthly (gross) with no overtime
monthly expenses: 3154.00 (not including cc bills, or payments to other unsecured debt.)

Electric, cellphone, water & trash, heat, car insurance, van pmt, house pmt, life insurance, school loan, food, gas, personal needs, health insurance premiums, house phone, internet, cable tv, medications.

Like I said, I have been working more than my compliment at work. I work every weekend, and get full time pay for my hours at work. I can pick up shifts during the week to help supplement our income. Husband went back to school for new job training and wants to work, but we're afraid it will throw us over the median income for Indiana (66000).

Will they ask us why he is not working? He supplies our childcare when I am working...it would cost us money now for him to go to work. Once we know what direction we're headed, we can always change my hours to accomodate a job for him.

We're at our wits end, frustrated, and worried about making the right decision. Chase won't quit calling us, as we have stopped paying them as of last month. I know we'll NEVER pay down debt with those interest rates.

Any advice would be GREATLY appreciated.

Thanks in advance,

TheBrokeCouple

[nc73]

Just file and stop thinking. Your husband can work later on since they look at the last 6 months income.

[PaKettle]

Hi, I'm wondering if that $650+ disposable income each month might not be a problem; you might have to go for a Chapter 13, but hopefully someone more knowledgeable will answer you.
Ooops! I see now that the income you listed was GROSS, not net. So you have much less leftover income than I thought! You should be okay for a 7, then.

Try this Means Test Calculator:

http://www.legalconsumer.com/means-test-calculator/index.php

And ty this listing of expenses so you don't forget anything:

http://www.ca-bankruptcy-attorneys.com/calculators/expense_calculator.html

But you could certainly have a free consultation with an attorney or two to discuss your options.

[lrprn]

...but we're afraid it will throw us over the median income for Indiana (66000).

If you are the sole breadwinner at the moment and are making $3818/mo gross (assume you are being paid 1-2x/month rather than every two weeks), then that's $45,816/year. Median income in Indiana for a family of 4 (updated just this week) is $67.787 - http://www.usdoj.gov/ust/eo/bapcpa/2...come_table.htm . You are well under that, so filing Ch 7 should not be a problem.

Will they ask us why he is not working?

Most trustees don't really care how you got into financial trouble. The ones that do ask will accept that he's home taking care of your special needs children.

Chase won't quit calling us, as we have stopped paying them as of last month.

If you don't have caller ID and an answering machine, get them. Use them to screen your calls. Put a message on the answering machine that clearly identifies you so that the creditor has no excuse to call you at work. You DO NOT have to talk to Chase or any other creditor.

There are multiple threads scattered in the forum areas about how to survive frequent creditor and collectiion calls. A few searches should pull out some good ones with clever ideas on weathering the calls from our very resourceful members

[SinkingFast]

Many of us here on the Forum are SAHM's. Stay at Home Mom's. We didn't get asked why we don't work. I don't see the difference between us and a SAHD. The fact your Hubby is "Mr. Mom" should have no bearing on your case.

[jp2861]

If that's gross income it may be fine. You need to look at what your net income is.

Nobody can make anyone work.

Based on your monthly income and the median for Indiana, you should be fine.

All the information is here to determine whether you qualify. Best thing to do is read all the posts from beginning to end. You'll find most of your qualifying answers here.

After that, it's really just a matter of accepting facts as facts (as hard as it is) and deciding if a BK is the right thing for you.

Once you get to that point, if you decide to go through with it, start scheduling some free consultations with local BK attorneys.

Unfortunately, if accounts are already going to collections it's just a matter of time before you're in court. If you think things are rough now wait until your pay starts to get garnished. Then you'll be hurting.

Also, if you do decide to file you'll need time to get the cash together to pay an attorney. So, delaying things won't make it any better.

As far as making the right decision goes: For the most part you have two options 1) Increase your income or 2) file the BK. At those interest rates you'll be paying for quite a while.

Lastly, there are many, many people in the same boat as you. So, don't stress yourself out about the intangibles of filing a BK. Decide what's best to put you and your family back on the right path.

[SinkingFast]

Sit down with all your CC statements, the checkbook, etc in front of you.

Can you realistically, even if Hubby does go back to work, pay the debts off in a reasonable time frame?? Ch 13 max is 5 years. Can you get yourself out of the hole within 5 years?? If not, then BK may be the way for you to go.

Don't approach this from a morals perspective. Finance is business, pure and simple.

The CC companies make a business decision to charge you horrendous interest rate because you're carrying more debt than they'd like to see. You make a business decision to get yourself out of debt for the good of your family.

[jenbes27]

I think they will look at your last 6 months of income including any overtime you worked in that time frame, so you might want to watch out for that.

Your husband has a valid excuse for not working, however, if he can find a job in your pay range, you might be able to come up with a debt pay-down plan w\o filing bk.

bk is a hard choice, but that doesn't mean it is a bad one.

[TheBrokeCouple]

Thanks

Wow,

Thanks to everyone who has replied to my question. You all are great!

I'm wondering about filing for Ch7 AFTER we file our taxes...we are expecting a $5000 tax refund, and need a new roof for our home.

Any suggestions?

TheBrokeCouple

[pa308]

What if filing individually, wife is stay at home mom. Does she have to justify being stay at home mom?

[magyar123]

What if filing individually, wife is stay at home mom. Does she have to justify being stay at home mom?

No.

[SinkingFast]

If you're gonna wait until next spring to file BK after getting your income tax refund,............ Be sure to Document, Document, Document what you spend the money on.

Spring and Fall, Trustees are very interested in income tax refunds. Especially if you typically get a larger refund. If you file after getting and spending your refund, the Trustee is gonna want to know where the money went. So be sure to save receipts. And spend the money on necessities.