We qualify for CH7. What now?

[whattodointx]

New member-hi!

Finally convinced my husband that we are never going to get under the mountain of medical and cc debt we have. According to everything I have read, we easily qualify for chapter 7 due to our income/family size.

We are in TX and have over $60K in CC & medical bills alone, not including 2 vehicles and mortgage.

Questions:
1) we have not defaulted on anything...ever. We just have been working 2-3 jobs EACH to make the bills each month but we can't keep this up much longer..been doing this for about 4 yrs. How long will we have to wait to file after we stop paying?

2) What do we do with extra money each month, since we all of it will not go to the creditors?

3) We have tried so hard to not file bk, that we took out some 401K money (stupid) last year to try to save our butts. We have about $7K in savings from that. What do we do with this $$ before filing...cause I am not going to lose it. We have not spent any of it on fun, just to cover bills when things get extra tight.

We are just mentally and physically exhausted from trying to keep up and knowing we are never really going to get anywhere with our debt.

Any and all advice appreciated.

Thanks,
KM

[TEW]

this is what I would do. I would pay back the 401K the stocks are way down do you may get a bigger bang for the bucks in the long run. you probably already paid the penalties and tax on it but you are going to need a retirment someday.
Stop paying the CC's and get your money together to pay you attorney fees.
got health insurance? if not get some with that money your not paying the bills with.
pay for things you have been doing with out. things you need!!!! not want...
get a couple of free consults form BK attorneys 3 or 4 the more the better.

[Logan]

this is what I would do. I would pay back the 401K the stocks are way down do you may get a bigger bang for the bucks in the long run. you probably already paid the penalties and tax on it but you are going to need a retirment someday.
Stop paying the CC's and get your money together to pay you attorney fees.
got health insurance? if not get some with that money your not paying the bills with.
pay for things you have been doing with out. things you need!!!! not want...
get a couple of free consults form BK attorneys 3 or 4 the more the better.

You don't pay penalties and tax when you borrow from your 401K.

Logan

[Logan]

New member-hi!

Finally convinced my husband that we are never going to get under the mountain of medical and cc debt we have. According to everything I have read, we easily qualify for chapter 7 due to our income/family size.

We are in TX and have over $60K in CC & medical bills alone, not including 2 vehicles and mortgage.

Questions:
1) we have not defaulted on anything...ever. We just have been working 2-3 jobs EACH to make the bills each month but we can't keep this up much longer..been doing this for about 4 yrs. How long will we have to wait to file after we stop paying?

2) What do we do with extra money each month, since we all of it will not go to the creditors?

3) We have tried so hard to not file bk, that we took out some 401K money (stupid) last year to try to save our butts. We have about $7K in savings from that. What do we do with this $$ before filing...cause I am not going to lose it. We have not spent any of it on fun, just to cover bills when things get extra tight.

We are just mentally and physically exhausted from trying to keep up and knowing we are never really going to get anywhere with our debt.

Any and all advice appreciated.

Thanks,
KM

You don't have to stop paying your credit cards to file. I never missed a payment on anything when I filed.

Logan

[whattodointx]

FTR, we did not borrow against the 401K, we withdrew the $$. So we did have to pay penalties and taxes soon.

What WOULD YOU DO with the $$ in savings prior to filing? We want to use the $$ in the safest and most practical way possible.

Also, WHAT DID YOU/ARE YOU doing with cash that you are saving from not paying your debt?

[JoeBankrupt33]

If you have equity in your home, you will probably want to use the Texas exemptions, but TX also allows debtors to use the federal exemptions. So, if you have little or no equity in your home, you can use the federal exemptions which has a wildcard to protect your cash.