Chapter 7 Questions

[funcritter]

I am planning on filing Chapter 7 early next month. I have about $15,000 credit card debt that I just can't afford to pay anymore. As most of the payments start becomming due beginning with the 3rd of this month, they will all be past due by the time I file. None of the cards have my cell number and my home phone was disconnected months ago because I simply didn't need it. That will prevent nasty calls from them.

I purchased a new car two weeks ago and from reading other posts here, that should not be a problem. I plan on keeping the car.

I have a 2006 car that is entirely paid for with very low miles that I am also keeping. Do I need to inform the court that I have this car?

How will my income be verified currently? Is it simply by providing pay stubs? I know they will get a copy of last years returns.

I own a home that was left to me when my Mother passed away two years ago. I plan on keeping the home and am in the process of refinancing it to get it on a fixed rate. Is there anything with this that I will need to do before I file chapter 7?

I did file brankruptcy back in December 2007 and it was a very easy process then. I filed a 13 and then later converted it to a 7 when the vehicle began breaking down. I am hoping it will be pretty easy this time around and I will be dealing with the same firm who handled my case the first time.

[JRScott]

If you file a Chapter 7 in 2007 you can't file another now. You have to wait I think 8 years before filing another Chapter 7.

First off obviously you need to stop using the credit cards. In fact take out the scissors and chop them up.

Next is there any possibility you might get enough from the refi to be able to pay off the credit cards.

You might be able to do a Chapter 13 but I think it might be to soon to file another one of them too.

[funcritter]

I meant I filed in 1997. Sorry, I can't correct that.

[StartingOver08]

I just filed last month and my attorney required me to list ALL ASSETS and liabilities. For you, that means you have to disclose the completely paid for 2006 vehicle with low miles as that becomes an asset that belongs to the BK "estate". You also have to disclose your home. There are exemptions, but I don't know where you are and in some states the exemptions are very low. The law is completely different from the last time you filed in 1997. Are you filing on only the $15,000 debt? If so, you can negotiate with the cc company rather than file.

[funcritter]

I am in Denver Colorado. I planned on filing only the credit card debt.

When I filed in 1997, I had even less CC debt than I have now but the biggest part of the debt was the 1995 Camaro that I really couldn't afford and that needed severe engine work. I really need to get rid of the CC debt so that I can afford the higher mortgage payment that I will have soon. As I mentioned, I am refinancing the loan from a ARM to fixed.

[JRScott]

Oh okay if you previously filed in 1997 you could file again.

You will have to list all your assets, including the cars.

Depending on what your state allows for exemptions you may or may not be able to keep them.

A fully paid for 2006 car though I have doubts you'd be able to exempt.

To verify your income you have to file 6 months worth of paystubs now for the time period prior to filing. In additions they'll want probably 2-3 months worth of bank statements. You have to turn in the last 3 years of tax returns as well.

As the previous poster said there has been some major revisions to bk law since you last filed. Be sure to be forthright and honest with your lawyer.

Personally depending on your income, it might be possible to negotiate with the cards though that can lead to tax liabilities too and generally they aren't willing to negotiate til after you've missed several payments.

I wish you luck

[funcritter]

Oh okay if you previously filed in 1997 you could file again.

You will have to list all your assets, including the cars.

Depending on what your state allows for exemptions you may or may not be able to keep them.

A fully paid for 2006 car though I have doubts you'd be able to exempt.

To verify your income you have to file 6 months worth of paystubs now for the time period prior to filing. In additions they'll want probably 2-3 months worth of bank statements. You have to turn in the last 3 years of tax returns as well.

As the previous poster said there has been some major revisions to bk law since you last filed. Be sure to be forthright and honest with your lawyer.

Personally depending on your income, it might be possible to negotiate with the cards though that can lead to tax liabilities too and generally they aren't willing to negotiate til after you've missed several payments.

I wish you luck

Well, I do pizza delivery so the income "fluctuates" and is not entirely verifiable.

What happens if I don't have my paystubs? I only have them from the past two pay periods.

[StartingOver08]

You can negotiate with the credit card company because with the new law you can not just file on the credit card debt.

For a CH 7 you have to provide ALL ASSETS and ALL LIABILITIES to the court. You also have to provide a history. My attorney wanted 36 mths of statements, 4 yrs tax returns, etc.

The cc companies have a hardship program that will reduce your rate to a very low amount 2% or so. This is a hardship program - you need to speak to the hardship dept of the cc company. Most customer service reps don't do the hardship program and you may have to call the cc co many times to get thru to the hardship dept. I did this on two of my cards last year - took more than 5 calls or so just to get through to the dept - all the CSR's told me no. But I was persistant and my payments were dropped to less than 50%. Don't do this until you have your mortgage.

But as another poster said - if you take out the $15k from the house and pay off the card then your cc payment will be zero. Cut up the card or sockdrawer it.

[funcritter]

But as another poster said - if you take out the $15k from the house and pay off the card then your cc payment will be zero. Cut up the card or sockdrawer it.

Well I have ZERO equity on the house. I wish there was some that I could draw on but there is none.

[JRScott]

If you only have the last 2 pay periods, you need to ask HR for copies of the others, this is not unusual, most Americans don't keep pay stubs. I just informed the manager were I worked (for hotel) and they got me copies.

[funcritter]

If you only have the last 2 pay periods, you need to ask HR for copies of the others, this is not unusual, most Americans don't keep pay stubs. I just informed the manager were I worked (for hotel) and they got me copies.

Thanks. So, to clarify, if I simply want to discharge all my CC debt, do I understand correctly that I can't file just on the CC debt only?

I am also now thinking that the bank that holds my mortgage may be able to do a loan that can pay off my CC balances. To them, I'm sure $15,000 is not allot of debt but then who knows till I give them a call. I was going to do that for about $10,000 last year but decided against it.

Thanks to everyone who is patiently answering all my questions.

[JRScott]

Yes you have to list all debts in a bk petition.

However in a Chapter 7 you can seek to reaffirm (That is continue to pay ) on secured debt like a car or home.

If you do pay off your credit cards make sure to cancel them immediately so you don't get back in the same situation

[funcritter]

Yes you have to list all debts in a bk petition.

However in a Chapter 7 you can seek to reaffirm (That is continue to pay ) on secured debt like a car or home.

If you do pay off your credit cards make sure to cancel them immediately so you don't get back in the same situation

Ok I think I fully understand now. Thankfully I still have some time to make some decisions here before things start going too far.

[santadawg]

Hi there, I'm not an expert, but would call & negociate with cc or refi & pay off cards. You have a house & car that you don't owe on. I know it 15- is alot of money, but 10 years is a long time if you go bk. Bk should be when your down and out and no where to go. Most people file when they owe alot alot of money. I'm not trying to judge, just been there and done that.

[funcritter]

Hi there, I'm not an expert, but would call & negociate with cc or refi & pay off cards. You have a house & car that you don't owe on. I know it 15- is alot of money, but 10 years is a long time if you go bk. Bk should be when your down and out and no where to go. Most people file when they owe alot alot of money. I'm not trying to judge, just been there and done that.

I do owe on a car purchased two weeks ago today and I owe on my home with no equity to borrow on. The other car is paid off completly.

I am refinancing the home to get it on a fixed rate so that finally, I can start paying off the home. The credit card debt was making me only afford to pay the minimum payment with deferred interest on my home, getting me no where. I've had the home for two years now with no equity in it in those two years because of this.