How much cash?

[lost in AZ]

Quick Facts:
Live in AZ
Income is down from $15k a month to $4500 and no longer holding out realistic hope that it will return to former status any time soon.
Expenses at $7100 a month
Currently have $40k in CC debt (no charges in last 12 months)
$160k charge off from a no cash out Heloc after recent foreclosure (matter of time before they sue???)
currently have $40k left in savings, but am fast running through what is left.
No assets of any real value left.

My question is regarding the cash and what do I do with it?
1. Do I use some of it pay down any of the debts? (seems stupid)
2. Buy two used cars for cash for me and the wife and let the ones we have now that we owe twice what they are worth go back to thee bank too?
3.Just wait till I run through the rest and have nothing???

BTW the last thing I will do is anything that would be fraudulent. I just need to have some cash to start over.

all the stuff about negotiating with credit card companies seems futile at best, beside while I have not been hit with a suit from the HELOC I would guess it is just a matter of time before they come looking for the 160k. I cannot image paying a dime to them since I lost 150k down payment and 100k in upgrades, a 780 FICO etc.

Appreciate the help

[StartingOver08]

I'm sure you have checked out the exemptions for Arizona already. If not, here they are:

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

Here is the Arizona BK court info: http://www.azb.uscourts.gov/

A site that I have found helpful, other than this one of course, is: http://www.************************/

If I were you I would review the exemptions very, very carefully to see what would apply in your situation. It does not seem reasonable to spend your cash when you know that the HELOC may come after you. Have you spoken to any BK attorney's yet?

Do you have any homestead, or did you lose the only house you have?

[danaf]

From what I understand, people can just walk away from their homes in AZ with no penalty. Not an expert though.

But you have 40k in savings/cash. There is no way you will be able to file a 7with that much savings.

[Intoodeep80]

You could hire a really really expensive bk lawyer

[AngelinaCatHub]

Well, everything has a perspective. OP, you need to pay up any exempt stuff. Now not knowing your expenses, 40K in anywhere is heavy for a C7.

If you are or have no other recourse, going to file C7, then pay only those things that will aid you. Understand, if you pay your house ahead, that is cool, but if after 7 you cannot, then you are in trouble.

You just may be a candidate for a mobile home in Florida. Only my opinion as you have too much, but not enough. Very quiz able to me. ‘Hub

[lost in AZ]

I thank each of you for your reply especially stratingover08 for the additional info. I hope I do did not come off as a greedy jerk it is just that I have lost everything (materially) I have worked very hard to achieve for family and myself. I am simply trying to plan for the future since I do not feel that this economy is going to see a turn around anytime soon and it is just a matter of time before I have no cash. I guess I will wait it out and see it I can turn it around. if not then when I am down to zero I will file.

As with everything, this too shall pass and with all the events in life, there is something to learn. I wish each of you the very best on your journey.

[Help!]

A few things I've learned - whatever you do, don't go buy vehicles or anything of value with your savings. If you file BK later you will lose them unless you have the exemptions to completely cover them. If the income loss is very recent, filing now would put you at a disadvantage on the means test. It makes no sense to file if the means test will reflect the higher income you no longer have. With that said, you're better off from a bankruptcy standpoint using the savings to tread water until you're ready to file. There are some do's and don'ts in the months before filing, especially if you've had a history of high income... so stick around! I hope things turn around for you, that you won't get to zero and that you won't have to file.

[whoops08]

It will be okay.

Not sure between the laws in CA and AZ but I think you will be okay for CH. 7.

We were recently discharged in Oct. 08.

Total Income: way over CA limits. We had standard deductions for CA.
We let go of one car in BK that was worth way less than what we owed.
We were able to buy a car 2 weeks out of BK 7 discharge. High interest rate of 11% and put $1500 down on a $19k car.

Credit card debt of about $100k
two homes in bk

401k- not that much
CD account in my name of $45k (this was not our money, we are holding it for family member) We thought we would have to prove this since the cd account was in our names. It was listed in the BK. Trustee did not ask any questions or probe. On paper it looks like it is our money. We were shocked.

about a month after filing we had about $10k in accounts from not having paid the mortgage. Trustee did not touch these accounts.

1 month after discharge we were able to obtain an orchard bank credit card with $1000 limits for both myself and DH. We are using these to slowly rebulid credit in hopes to buy a home over the next 2-3 years.

Sorry for the rambling. I hope you get where I am coming from ... you are okay, get a good lawyer it is worth it. Don't pay your cc's if you know that BK is your option. Don't buy any cars before you file. If you know you are going to include your cars in the bk, our attorney advised us to stop paying on them. We did.

Good Luck to you. You will be okay!

[lost in AZ]

thanks for the words...

Thanks again for all the input. It really does help. I will be seeking out a good attorney this week and will keep the forum posted with the hope that it might help someone else in my situation.

[Phillymanhere]

Quick question. A friend of mine had a foreclosure on a house she owned out West. She says she will have to add the amount "charged off" to her income tax return. Will this be the case for you? If so, you may need that case for extra IRS bill.