Help!! Maybe I should Not file?

[Teddy]

I am very confused and I am hoping you guys can help me.

My situation is I was going to file C7 (retained atty Friday) - I am married but we pretty much keep our money separate. He is on disability and together we are under the median for Indiana. I am filing alone.

Our arrangement is probably irrelevant but just in case - he gives me $200 cash each month and buys groceries.

With the money I make, I'm only left with $200 or so a month which gets me by with his money but we skimp. I havd 16k of cc debt I was going to file on. Was keeping home & car. Home probably doesn't have that much equity and upside down 6k on the car.

I thought I'd qualify based on everything I have read - my attorney told me to make a budget showing how I will be spending my money minus the cc debt, I did it and to me everything is very much in line.

I am never late on payments, credit score is around 670.

I was thinking about cars today after reading something here so I stopped at a dealer tonight. Short story, one of the part-owners of the dealership ended up talking to me and said that I am probably going to make matters WAY worse for myself if I file. He does not believe in any way, shape or form that I'll get discharged and then I'll be in a world of hurt with all of my cc's.

He said they can charge money on my escrow if they want. All of my cc's will probably skyrocket on interest and it will be really bad. He said he's seen it happen way too many times. He said he's seen it in situations much worse than mine where it didn't go thru.

I'm freaked out now. He was very sincere and I am positive he was looking out for my best interest - he spent quite a while just talking to me.

What should I do? He said get a home equity loan or re-finance my house. I didn't think I had equity in the house b/c I've only been here 2 years, financed 100% and the market sucks. He said that is probably true as far as selling it but to get a home equity loan it looks different - it would show more equity then.

I do not want to do this if it's going to screw me and now I am very upset and don't know what to think.

Any suggestions?

Thanks!

[danaf]

I don't think a car dealership owner is anyone you should listen to. He sells cars, he does not do bankrutpcy's. And actually he gave you very bad advice - about refinancing your home to pay down your unsecured debt. And what was that about escrow? - Never heard of such a thing since I've been reading these boards.

16k is not a whole lot to file bk on though - esp. when you can only use the bk card once every 10 yrs (is it 8 or 10? not sure). Of course you could file and it is very likely you'd have a successful ch 7. But what if you were to get a part-time job to try to get rid of the 16k?

[Teddy]

I could get a PT job. I've done that before and it burned me out. Am I wrong to want to file and not get the PT job to help myself? I will get a raise in Sept and things will be somewhat better then.

Since I am capable of paying my bills with my husband helping, maybe I'm not a candidate.

I wasn't going to file but I'm always in such a pinch for money and he said the laws are there to help and I thought well, maybe he's right.

The car guy probably sees quite a bit of stuff when he is looking at credit & getting people approved for loans so I figured he probably knew what he was talking about.

I had not heard of that escrow thing either and I've been doing quite a bit of research on the subject too.

I know that 16k is probably not much too, especially compared to a lot of people. To me, with my income it seems like a pretty high number.

Personally, I didn't like (and told him that) the idea of refinancing the house to add the cc's on it. That seems like a long time to be paying on them! Like it would cost me way more.

[epiphany]

I could get a PT job. I've done that before and it burned me out. Am I wrong to want to file and not get the PT job to help myself? I will get a raise in Sept and things will be somewhat better then.

Since I am capable of paying my bills with my husband helping, maybe I'm not a candidate.

I wasn't going to file but I'm always in such a pinch for money and he said the laws are there to help and I thought well, maybe he's right.

The car guy probably sees quite a bit of stuff when he is looking at credit & getting people approved for loans so I figured he probably knew what he was talking about.

I had not heard of that escrow thing either and I've been doing quite a bit of research on the subject too.

I know that 16k is probably not much too, especially compared to a lot of people. To me, with my income it seems like a pretty high number.

Personally, I didn't like (and told him that) the idea of refinancing the house to add the cc's on it. That seems like a long time to be paying on them! Like it would cost me way more.

I agree with Dana. The car guy just wants to sell you a car. He may have sounded like he knew what he was talking about, but he is a salesman and they can be shady....and your lawyer sounds like he just wants to sell you a bankruptcy...he might be just a salesman too.

If I were "getting by" and not in arrears, and had your credit score, and your amount of debt, I would look for alternative ways to get ahead. I would look for ways to save money and I would not get myself any further in debt...do you really need a new car? I don't think bankruptcy is for people that are getting by. It's for people who aren't.

I wish you luck whatever you decide but I really think you should look at other options before pulling the trigger. You'll be better off in the long run. I do applaud you for realizing your situation before piling on the amount of unsecured debt that so many of us have.

ep

[lrprn]

Personally, I didn't like (and told him that) the idea of refinancing the house to add the cc's on it. That seems like a long time to be paying on them! Like it would cost me way more.

Teddy, your instincts are right on the money here. Going into a lot more new debt to pay off current debt is *NEVER* the right thing to do when you are already struggling financially now.

Instead of listening to a well-meaning but uninformed car salesman, instead make free or low-cost initial consultations with 3-4 bankruptcy lawyers in your area. Sounds like you need knowledgeable advice from folks who make bankruptcy their business. That's the best and most reliable way to find out exactly where you stand right now. You'll learn a lot about what's going to be ok and where you might have trouble along the way as well. Be sure to come back and let us know what you find out, ok?

[danaf]

lrprn - she already attained an attorney. Yes, Teddy - you could consult other attorney's on this however I hope people from the board will chime in because I think the collective advice from here will be helpful for you to make a decision. Obviously the attorney you retained thinks you can do a ch 7 no prob. but in my opinion, the issue here is more - for 16k are you sure you really want to file bk? Your attorney will most likely get you through this no prob. He will make his money no matter what. But what do you want to do?

If you can get a part-time job to pay this off - why file bk? Sure it will be tough for a while BUT you have to think - what if in the future some major castrophie hits you for way more than 16k.....what if you end up in the hospital and the bills add up - and you cannot pay them? Or/and I don't know who is paying the mortgage to your home but what if your husband is, and then he passes away unexpectantly - and you cannot pay? My point being - you need to weigh your options here.

The BK card is not one to be played often so weigh your options and think hard about it, for the now, and your future.

[aachudneymiles]

I just thought of something,.16k isnt alot .. and maybe you should save your bk until and if you ever really need it..
I know people dont plan to get in debt but it sometime happens that way.

good luck and never talk to a car lot salesman and expect the truth or many lawyers for that reason.

[Teddy]

The reason I was considering the car was that I thought maybe I should get a different car before I filed - if that matters.

The car salesman (he was the guy who works with the numbers, not the actual salesman) didn't seem to care either way if I got the car actually. For some reason, I trusted him. The guy who came out and talked to me didn't have to, it really seemed like he was trying to help. At that point, they weren't even really trying to sell me the car.

I think I need to speak to a couple more attorneys. None of my bills are behind yet and I'd rather have wasted the $100 retainer for the one I got then to file and have it bite me in the butt.

For the record, the attorney I have is one who says half of his cases are BK. He was under BK in the phone book.

I even called him several days after I retained him to be sure he thought it would be ok - and I talked on the phone to LegalHelpers (but didn't go to a consult) and they made it sound like it was definitely an option too. The attorney I have said he used to work for LegalHelpers.

I know that it's not the best idea, but at this point in my life I would just finally like to be free of the mess I've continually been in for what seems like forever.

I'm worried that I picked a bad attorney but I have no way of knowing. I liked the secretary when I called, she said the attorney was real casual and really helpful and friendly.

I don't know what to do, this has me extremely stressed out. I can't be making phone calls right now at work either since my boss is here. I was hoping to make a couple calls and schedule some consultations but I'll have to wait. I need someone I can trust but I don't know who that is!

[danaf]

definately talk to some more attorney's. But consider the perspective here. You are only 16k in cc debt. I don't know what type of car you have but yes, perhaps it is possible to sell privately and then turn around and buy one that is much cheaper which would enable you to try to pay down your cc debt faster. Many people do that.

BK can be done once every 10 yrs, you should consider this fact very seriously. Forget the car salesman. He was just telling you what he thought you wanted to hear and trying to sell you a car to boot. I've seen it posted here many times that you should never take out a secured loan to pay off unsecured debt. This guy you spoke to had no idea what he was saying and he definately did not have your best interests in mind - only his own.

And keep in mind, although alot of people advocate 'getting' an attorney -attorney's are just trying to 'sell' as well. An average bk7 cost arounf 1500 - who do you think does the paperwork? Their paralegals. Honestly, your case is not so complicated should you decide to file.

I am being brutally honest here when I say for only 16k I would suck it up and do whatever I had to to pay it down and not file.

[FreshLikeADaisy]

Teddy, a lot of good advice here on this thread! I too think the salesman was full of it: what's this "escrow" business? And your cc rates can skyrocket regardless, but if you declare Chapter 7 it doesn't matter how high they go because that debt is discharged.

I don't know what your income is; to me that's the most important factor in deciding to file. For instance, if you only make $20k a year, $16k will take you *forever* to pay off and it may very well be worth filing Ch7. On the other hand, if your income is $60k a year, then forget the Ch7 and pay down the debt. It really depends on what percentage of your income is going toward debt payment, and whether those payments are actually making any dent in what you owe. If all you can do is make a minimum pmt every month, it could literally take you decades to pay off those credit cards. So with that in mind, consider whether Ch7 is right for you.

The other thing I would strongly recommend is that you go ahead and invest in a book on Ch7 so that you thoroughly understand the basics, whether you get an atty or not. The link to my favorite (the Nolo Press book) is in my sig, but there are others out there too, like Bankruptcy for Dummies which I have heard is just as good. I think if you read it through and get a general idea of the process, and read through this forum as well, you will get a very good idea of what to look for in an attorney and what questions to ask to get the most out of a consult. Be prepared to spend a few hours doing some studying, but the payoff in understanding and being able to spot a good atty is well worth it. Don't go in blind... and don't tell a car salesman you're thinking about declaring bankruptcy, it won't help your negotiating position!

Best of luck to you!!!

[lrprn]

BK can be done once every 10 yrs, ...

Actually a Ch 7 can be filed and discharged every eight years and a Ch 13 can be filed and discharged every six years.

That you filed bankruptcy does stay on your credit reports for 10 years, although most filers find that after two years of good credit history after filing, the bankruptcy's effect is minimal .

[Cali]

I would look for a p/t job to pay the debt off instead of filing.

I would never refinance to pay off debts.

I would also find other attorneys to talk to.

Good Luck!

[Teddy]

I am making minimum payments on the cc's. My income on my taxes last year was 37k.