Chapter 7 maybe

[tunnellight]

OK so I think my hubby and I are going to file 7 We can't afford an attorney so I might try Pro Se We are in the hole for 50K cc debt. Our house is around 144K we still owe,combined owe on cars around 20k His income is about 30k a year . I am on unemployment currently We have 2 small children. We live in NC He has a 401k of about 9k that we have to cash out to pay bills, buy groceries etc.. I want to keep our house and cars. I have three questions now, I'm sure I'll have more as the process goes. First should we wait until we get our tax return back to file and second when he cashes out his 401k are they going to want any of that money and finally, what are the exemption numbers for NC and does that mean that if the value exceeds the exemption number we would have to sell that item? Thanks everyone I am grateful to have a place that I can even ask these questions.

[TEW]

North Carolina Exemptions

http://www.bankruptcyinformation.com/NC_exemp.htm

First of all leave the 401 K alone that is exempt and you need to retire someday.
stop paying the CC's and buy food and the things you need.
There are different exemptions for different things.

[tunnellight]

Thanks for that link. I appreciate it I'm so confused as to what and how to go about this Have a great holiday

[mmenz22779]

dont cash out your 401k, you would be better to take a loan against it if you need money that bad. You can use your payments as an offset for expenses as well.

To answer your question if you do cash out that 401k or take a loan out you have a few options,

you could count the money as exempt or you can pay your living expenses.

if you don't some how protect it either by spending it on living or exempt it then yes the trustee will go after it.

you value your stuff by what it would sell at a garage sell. Most of the items in your house are protected but if you have some unusall stuff (paintints, collectables ect..) that is a different story and yes the trustee can go after those items.

Your tax return if you wait until after you have the money they can try and take it if you dont exempt it. This is a hard one as either way you have to show your tax return to the trustee so they will know how much you are getting back and may come after it. You have to think of a way to protect that money.

if you let enough time pass you might be able to use that money and put it in a ira (this is protected) then after the BK if you still need it you can with draw it (penalties though)

or you can spend it on a living expense such as pay off your insurance, pay your utility bills for then next 6 months ect..

dont use it to pay your credit cards or car loans.

pre plan as much as you can.

[mmenz22779]

remember a chapter 7 is an ASSEST BK, so you gotta protect those assets. There are many ways of doing this but out of the scope of this forum. do lots of research and you will find different way people have done this.

the more time you have the better.

[tunnellight]

Thanks all!! I think even though we can't afford it We are going to have to get a lawyer I probably can't do the research beacuse of my monkeys( 2 under 5) I am really afraid that I would miss something when filing Pro Se. We don't have any assets We owe pretty much at value for our cars and house. I don't want to walk away from the house I like it and I think it would be too traumatic for my daughter. Should we stop paying the cc now or would that be like Bk fraud? sorry such a silly question I just don't want to jeopardize anything when we do file. Thanks again!

[GreenInkOnPaper]

If you have to pull your IRA to pay for living expenses while making your credit card payments, and it's been more than 90 days since you have used the cards for a purchase over $500 (that includes cash advances), than by all means, stop paying them. Get ready for the collection calls, though. I would really look hard at the affordability of your house payment and car payments ~ make sure you can afford them AND save for emergencies, put money in a retirement plan, etc., after you file BK. Good luck!

[mmenz22779]

Here's what to do, open up your phone book and schedule a "Free consultation" with every lawyer in that book. Have a list of questions and ask each one those questions, i promise if you do that and do research on this board you will know more than you think.

Look at legalconsumer.com for the means test and the usbankrupcy court website for the forms 22a, and the schedules. 90% of a BK is not that hard, if you file your own taxes this is no different, that other 10% is what you ask the lawyers during your consult.

you will get diffent answers and different results, mine were as clear as mars and venus.

laywers are expensive so it is up to you. for a chapter 7 in your case i would say $1500-2000 and a chapter 13 $2500-3500

your credit card ?, if you have used the cards 90 days before fililing and not paid on them then that is fraud and can be a problem.

if you used them 90 days before filing and paid on them then that can be fraud but you are showing good faith so it is a 50/50

your best is to stop using them 90 days before filing and pay on them as long as you can then file when you need to.

the more time between the last usage, payments and filing the better. 90 days is minium, 5 months is normal and over 7 you are good to go.