Recent Huge Credit Card Debt and Bankruptcy Filing

[hanta]

I have recently accumulated over $45,000 in Credit card debt in the last 3 months. and my credit card debt is now @ 125K. In 2007 I settled all my debts and now I am back at it again, I had no Credit Card Debt and almost 150K in savings. I invested all in Stocks in Sept 2008 thinking its the bottom!! and boy was I wrong!!!, and lost badly last year. To cover my margin calls, I used credit card debt to cover the stocks margin calls. So CC debt involves, cash advances amounting to 90K from various CC. Most of these were used in the Month of November and Decemeber 2008.

Now I almost lost all in the stock market and have only 15K in liquidable cash from the stocks.

What are my options in Bankruptcy, and will Chapter 7 work for me? Will I be able to negotiate under chapter 13 to pay 30% of debt etc..

My Total income is 78K and I have 6 Dependents. I own a house and the mortagage owned i way above the value of the house. (2 mortgages 1st and 2nd)

Between paying mortgage and family, I can berely make the CC payments. I have not defaulted or behind in any of these.

Whats my options!!! Bad money management from my side brought this onto me!!!

Also Do I have to wait for 6 months before filing or 3 months? etc.. Any help or information is appreciated and what are the chances it will be discharged if I file BK Chap 7? I will retain attorney to file my case.

Thanks

[Flamingo]

At the top of both the Chapter 7 and 13 forums are threads called "Stickys." Take some time and go through them to educate yourself a bit about each Chapter so you know what you are dealing with. You have to assess your risk as to those stocks cause if you sell them now, you will turn a paper loss into an actual loss and when the market rebounds, you will lose out. And, of course, it could tank. Most people who can are sitting tight and they will probably fair the best in the long term. If you are unable to sit it out, call and get a free consultation with a BK attorney which can open your eyes as to what you can and cannot do as to your situation in the state in which you reside. Also on top of all this, you will need to try to learn to live within your means which is one of the most difficult things for folks to do when they find themselves in similar situations as you and many of us on this forum. This economy has forced many folks to look at the lifestyle they have been living and how fooling around with too much credit can blow it all apart. Get that consultation and you will feel much better knowing your options.

[jktrading]

You put all that cash in at one time, ouch!

http://en.wikipedia.org/wiki/Dollar_cost_averaging

Stocks, through mutual funds, are for people who have 5 years minimum (10 years better) to wait around for the market. It could be 5+ years before a rebound. It will happen eventually.

I would always suggest a 12 month dollar cost averaging to anyone who has a chunk of money to invest.

[keepmine]

90K in cash advances in the past 3 0r 4 months are guaranteed to raise some eyebrows. Time will be your friend here. I'd put off filing as long as possible.
You really need to see a lawyer. High dollar bk with much of it done recently will in all likelyhood atract the UST's attention.
Most bk lawyers give a free or lowcost initial consultation. SPeak with a few and see what they suggest.

[hanta]

Thanks Keepmine and others... Will putting filing after six mths of use OK or wait longer..? Last use was in December and Plan to file in May. Or should I wait till June? Also should I stop paying the CC the mnimum payment till I file or just stop now?

[keepmine]

Your case is not going to be a routine "run of the mill" bk. I'd strongly suggest you see a few lawyers before you do anything.

[AngelinaCatHub]

I agree with Flamingo as you have lost nothing until you sell the stocks. It is not the value now that counts. It is the value at the time you sell. You lost nothing. You said 15K liquid now from 150K investment. So what is 10% gamble as you already lost 90% if you sell. HOLD as JKtrader said also. Sounds like he's savvy at this. Also, that kind of money is gauranteed to attract attention nomatter what look back is. They have a right to look back for years if there is reason. Distance yourself as long as you can stand it. 'Hub