Do I qualify for Chap 7? here is my rundown.. Need opinions please

[hanta]

Here is the rundown of my current situation.

36 years old, married, 4 kids and taking care of a parent

$125,000 unsecured CC debt
3 Cars Book values (2K, 4K, and 7K) For Wife, Me, and Parent.
First Mortgae Loan: Balance 155K
2nd Mortgage Loan Balance 48K

Home Value now is at 160K

My income is $82K/year. ($6,800 gross monthly, $4600 net monthly)

Monthy Payments:

$1250 1st Mortgage
$600 2nd Mortgage
$2500 CC payments
$400 clothes, toiletries, Diapers etc...
$450 Gas, Electric, Water bills
$300 Car Gas
$900 food
$140 Insurance
$250 Prescription and medical costs

This is all pretty rough...but this gives you an idea of what I have going on. Most of the (50%) Debt incurred in the last 6 months.

The way I am going, I'm going to remain in debt for quite some time. Is there any way I can qualify for Ch7? If So, Can I negotiate the 2nd Mortgage?

I retained attorney and he made it look so easy that i qualify and was wondering if thats the case..

[WorkingItOut]

What state are you in? Every state has their own median income that they go by to determine whether there is immediate qualification for Ch. 7 or not. It also depends on family size. If you don't qualify immediately based on your state's median income, you take the Means Test to determine if your monthly expenses are high enough to qualify. Obviously any debts like credit cards that you want to discharge are not taken into consideration when determining monthly expenses. Each state also has its own limits on the amount of assets you can keep.

[JoeBankrupt33]

If you have a 7 person family (assuming that the parent can be claimed as a dependent), then your income is under the median income for every state except Arkansas, Mississippi, New Mexico, and West Virginia.

Falling under the median income makes the process a whole lot easier and you will likely be able to qualify for a chapter 7. You also need to account for your post-bankruptcy expenses on Schedule J, which should use up your disposable income. Your expenses now are $4290 without the credit cards, so you'll want to come up with some additional expenses. I would start with food. $900 for 7 people is not a lot.

[DebtStinks]

It will really depend on where you live... since many parts of the means test pull data based on your location.

Does your wife/husband have any income? Going to be a joint filing? Does the parent live in your house as well (that could bump your holdhold to 7)? It looks like you own your cars is that correct (will decide if you get to take the ownership deduction)? How much comes out of your check to cover your medical insurance each month? Any mandatory payroll deductions for a pension plan or union dues? Term Life insurance?

There are lots of variables on the means test so it's hard to give a straight answer.

You might just want to step through the Means Test Wizard I wrote when trying to figure out our own info. If you have any questions just let me know.

[hanta]

Thanks for the Inputs...

Thanks DebtStinks for the excellent and simple wizard...