Please somebody help me!

[2muchdebts]

Thank you for giving me the opportunity to expose my financial problems in this forum. I have been reading the different cases and realized that this forum has helped a lot people in trouble! I hope i can get the same help!

I AM IN DEEP FINANCIAL PROBLEMS at age 50. My debts go around $800,000 that's including my house, medical debts, credit card & loan debts.

I am a real estate agent in Florida. 5 years ago I was doing a lot of money, selling, buying, flipping etc. After a while we decided to make our biggest investment: We purchased a $500,000 house with the intention to live in it for 1-2 years and then sell it. Make good profit out of it, wipeout all debts and then purchase a nice apartment for the two of us. START FRESH. Those were the plans....

We had a line of credit of $170,000 available (2006) and we only used $80,000.

In 2006 my in-laws (from another country) asked us if they can wire transfer $40,000 (part of their retirement money) to our account since the political situation in their country was not stable and they were afraid to loose it. We deposited the money in our LOC in the meantime. It was considered a payment to the loc.

In march 2008 we received a letter from the bank informing us that due to the market melt down the heloc has been frozen. Nio more money was available...My inlaws money was taken away too!!

With the market melt down, Real Estate sales dropped completely. My husband has an internet business and his income can barely cover for his own debts and other house expenses (food, mortgage utilities, etc). At this point I would like to save his credit (which has fewer debts)

Since we were falling short every month, I started taking money out of the credit cards to compensate. Banks have been taking adavntage of the population by raising APRs, minimum payments which had worsen the situation. I have been paying more INTEREST than Principal and the balance does not seem to lower. I have always taken good care of my credit, paid on time, never been late etc which in a way had helped survive during these 18 months!!

I have visited 3 BK lawyers so far asking for help and guidance in these difficult moments. They had recommended me filing for chapter 7.

The first one told me to file BK inmediately!! Include everything (mortgage, cars, cc, medical debts et). Stop paying my creditors ASAP.

The second one recommended me to file chp 7 too, wait 6 motnhs and asked me to get rid of my 2 expensive cars and getting into a really cheap car lease in the meantime. As a result of that, the defficiency balance would be charged to my unsecured debt (something like that)

The third one suggested to keep the cars until after filing. Keep making payment on the 2 cars or partial payments (according to my possibilities) That way they defficiency balance wont be treated as an unsecured debt because i have 2 assets. He also suggested to wait at least 90 days until after the scenario on the credit cards is cleared (i have made some charges in the last month to several credit cards)

At this point i am very confused, scared, and dont know what to do!!
I need some clarifications.

CAN SOMEBODY PLEASE HELP ME???

I have the following questions:

1- What is going to happen once i stop making payments on all my debts
2- Am i going to jail?
3- What are the legal implications of all this?
4- Is it better to keep the cars (until i file) or get rid of them?
5- I owe $8000 in my AMEX GOLD (from last month) which are due by the end of this month. What should i do with it? I dont have the money to pay for it!
6- can they go after my husband's credit? Is he responsible for my debts? ALL MY DEBTS are only mine, my husband does not have anythinf to do with them.
7- If I wait 6 months (before filing) what can my creditors do against me in the meantime since i dont have legal representation nor a BK case number?

Sorry for such a long post. I am really nervous and since i was told to wait, very confused and right now any additional help will be greatly appreciated.


God bless you! Thanks for your support!!
2muchindebts

[hopeforus]

Well I'm new to all this but I was wondering the same thing about being thrown in jail. now I kind of chuckle that I thought that way but I have learned a lot on these forums. I learned that not paying your debt isn't a crime... Unless you have committed fraud then you are not going to be arrested or anything. The worst that is going to happen is the phone calls will become intense and they may call your neighbors and family and your work. And you could end up with a judgement against you . At that point you should be filing bk I believe.

But don't worry... they can't DO anything to you.

Sorry you are in this situation. We have only decided to do bk last week and this is our first month not paying our bills. We will miss our first mortgage payment on the 4th. We don't play to file till after January because we have a residency requirement to fulfill but might wait longer depending on what his income looks like.

[Phillymanhere]

2much,

First step chill. America does not have debtors prison. No you will not go to jail as long as you have not committed horribly blatant fraud.

It is typical to stop making payments to creditors once you know you are going to file for bk. That money is wasted and you will need it to pay the lawyers and to survive.

I know it feels weird, but yes, you want to stop paying you credit cards. Now for the cars, that may be different ... Yes, you will get phone calls from creditors .... Ignore them .... I stopped paying debts as of April of 2008 ... I still get calls, though not as many as before ....

FYI: as soon as you retain your lawyer, they will usually allow you to refer calls to them and the calls will stop. My attorney requires full payment before allowing me to direct calls to his office. Other lawyers only require downpayments ....

So what will happen if you don't pay AMEX? ... you'll get calls .... they'll beg you to pay and try to talk big and bad, but they can't do anything because YOU DON'T HAVE THE MONEY TO PAY THEM.

I'm not exactly sure of Florida law, but often the spouse is affected. Read through old forums for Florida and see what is said ...

On the lawyer situation, I don't see huge differences between what the lawyers are suggesting to you. These are slight slight variations on the same thing: each thinks you can qualify for chapter 7 right? ... Each is trying to maximize your chances ... they are basically saying quite similar things ... some lawyers are extra extra careful ... others feel they know the law and the way it is applied in your area so well they don't try to cover every base as they focus on what's important in your area ...

But these three all sound reasonable to me ....

Try to connect with your feelings and gut and intellect about which lawyer you trust most, which one seemed the sharpest, whose office seemed the most organized, etc ... and select that lawyer and go with their advice.

On the cars, if you read through old forums, you will find hundreds of threads that I'm sure apply to your same situation ....

Basically chill. you're not about to be arrested .... read through forums here and you will get smarter about the process and probably feel more confident about what you're doing ....

A lot of people experience shame and embarrassment in the course of this process. I did not get stuck in shame ... I concluded early on that filing bk was the most honest and honorable thing I could do. I can't repay the money. Why pretend otherwise?

Anyway, keep coming back ... you'll get more feedback. You will get through this ... we're here to help you with good info.

good luck!

[DaisyMae]

Stop paying everything you don't want to keep.

Stop paying all unsecured debts. Use the next six months to plan your exemptions, and to plan a logical petition that will take advantage to your best interests. If you want to keep your primary house, in Florida there is almost unlimited homestead protection. You have way too much going on to file right now, I'd suggest the first lawyer is incompetent. RUN!

[vermontbloke197]

Thank you for giving me the opportunity to expose my financial problems in this forum. I have been reading the different cases and realized that this forum has helped a lot people in trouble! I hope i can get the same help!

I AM IN DEEP FINANCIAL PROBLEMS at age 50. My debts go around $800,000 that's including my house, medical debts, credit card & loan debts.

I am a real estate agent in Florida. 5 years ago I was doing a lot of money, selling, buying, flipping etc. After a while we decided to make our biggest investment: We purchased a $500,000 house with the intention to live in it for 1-2 years and then sell it. Make good profit out of it, wipeout all debts and then purchase a nice apartment for the two of us. START FRESH. Those were the plans....

We had a line of credit of $170,000 available (2006) and we only used $80,000.

In 2006 my in-laws (from another country) asked us if they can wire transfer $40,000 (part of their retirement money) to our account since the political situation in their country was not stable and they were afraid to loose it. We deposited the money in our LOC in the meantime. It was considered a payment to the loc.

In march 2008 we received a letter from the bank informing us that due to the market melt down the heloc has been frozen. Nio more money was available...My inlaws money was taken away too!!

With the market melt down, Real Estate sales dropped completely. My husband has an internet business and his income can barely cover for his own debts and other house expenses (food, mortgage utilities, etc). At this point I would like to save his credit (which has fewer debts)

Since we were falling short every month, I started taking money out of the credit cards to compensate. Banks have been taking adavntage of the population by raising APRs, minimum payments which had worsen the situation. I have been paying more INTEREST than Principal and the balance does not seem to lower. I have always taken good care of my credit, paid on time, never been late etc which in a way had helped survive during these 18 months!!

I have visited 3 BK lawyers so far asking for help and guidance in these difficult moments. They had recommended me filing for chapter 7.

The first one told me to file BK inmediately!! Include everything (mortgage, cars, cc, medical debts et). Stop paying my creditors ASAP.

The second one recommended me to file chp 7 too, wait 6 motnhs and asked me to get rid of my 2 expensive cars and getting into a really cheap car lease in the meantime. As a result of that, the defficiency balance would be charged to my unsecured debt (something like that)

The third one suggested to keep the cars until after filing. Keep making payment on the 2 cars or partial payments (according to my possibilities) That way they defficiency balance wont be treated as an unsecured debt because i have 2 assets. He also suggested to wait at least 90 days until after the scenario on the credit cards is cleared (i have made some charges in the last month to several credit cards)

At this point i am very confused, scared, and dont know what to do!!
I need some clarifications.

CAN SOMEBODY PLEASE HELP ME???

I have the following questions:

1- What is going to happen once i stop making payments on all my debts
2- Am i going to jail?
3- What are the legal implications of all this?
4- Is it better to keep the cars (until i file) or get rid of them?
5- I owe $8000 in my AMEX GOLD (from last month) which are due by the end of this month. What should i do with it? I dont have the money to pay for it!
6- can they go after my husband's credit? Is he responsible for my debts? ALL MY DEBTS are only mine, my husband does not have anythinf to do with them.
7- If I wait 6 months (before filing) what can my creditors do against me in the meantime since i dont have legal representation nor a BK case number?

Sorry for such a long post. I am really nervous and since i was told to wait, very confused and right now any additional help will be greatly appreciated.


God bless you! Thanks for your support!!
2muchindebts

There are many people on here who can help you by giving their opinions and experiences of bankruptcy but at the end of the day its not legal advice................so I want to try and answer some of your questions the best I can and hopefully other people will throw in their 10 cents worth as well.

1- What is going to happen once i stop making payments on all my debts
............Nothing will happen in the short term except for your phone ringing off the hook(collection agencies). Every credit card company is different.......some will write off the debt, others will sell it to collection agencies and some will take you to court (or all of these things) If you stop paying on the house, you should have at least 6 months(without filing bankruptcy) before foreclosure. Of course if you want to keep the house you should do a chapter 13. I decided to sell my house via a short sale before I filed chapter 7. If you want to keep the cars, continue making your regular payments to the bank and tell them that you are filing for bankruptcy but want to reaffirm the debt after discharge.......what this means is that the debt is not discharged in bankruptcy....just keep paying on the debt.



2- Am i going to jail?
Don't be silly, you are not going to jail.........unless you have committed some sort of crime but otherwise bankruptcy is nothing to be ashamed of..........whether its just bad luck, or other circumstances beyond your control or just poor financial management........its not a crime to be insolvent.
3- What are the legal implications of all this?
Legal implications???? All of the debt that is dischargable, will be erased....meaning you are no longer legally responsible for paying it. Of course your credit will be destroyed and you will still have to pay any back taxes if any that are not erased in bankruptcy.

4- Is it better to keep the cars (until i file) or get rid of them?
That's your choice........also your decision will be based on how much the car is worth and how much you owe on it. In my case, I told the bank that I will reaffirm the debt but I also had to keep in mind its value. There was about $5000 equity in the car(difference between its value and how much I owed on it) and so I used one the exemptions that bankruptcy affords to prevent the Trustee from taking it.

5- I owe $8000 in my AMEX GOLD (from last month) which are due by the end of this month. What should i do with it? I dont have the money to pay for it!
If you are going to do bankruptcy, then stop paying on the credit card now.

6- can they go after my husband's credit? Is he responsible for my debts? ALL MY DEBTS are only mine, my husband does not have anythinf to do with them.
I can't really answer that question because I don't know his situation. I will say this................all of my debts were in my name only. However, I was told that as I had made my wife an "approved user" on the accounts, the creditors could come after her if I just filed by myself.


7- If I wait 6 months (before filing) what can my creditors do against me in the meantime since i dont have legal representation nor a BK case number?
If your situation is as dire as you say it is why wait to file? The only reason to wait to file is to see if you can figure out a way to pay your debts without going into bankruptcy.......otherwise file now. The sooner you file, the sooner you can start to rebuild your financial life.

Now I filed without a lawyer and overall I am glad I did because my case was relatively straight forward. The forms for chapter 7 were easy to fill out with a little research and organization. However for you, it all depends on what your plans are but choose your lawyer carefully if you decide to get one.............a long time friend of my wife's filed for chapter 13 back in june so that she could save her house from foreclosure. The lawyer took her $3000 and essentially sat on the case. Because she decided to leave it all to the lawyer, she never bothered to check up on how things were going until she got a letter from the sheriff's office informing her that the house would be sold at auction. The lawyer never showed up to court for the removal of the automatic stay but worst of all, never told her that the bank was now free to repossess the house. She is now trying to sue the lawyer to get her money back.

I wish you the best of luck and I hope there are other people on here who can advise you better than me.

[2muchdebts]

It is very comforting to find advise and help during this difficult time.

Thanks from the bottom of my heart!!

[hopeforus]

Another reason to wait is if you need to wait for any 70/90dys to pass because of cash advances or balance transfers etc.

One thing I just thought of...

Imagine if they threw us all in jail for not having money? That would cost the government even more money they don't have.