please help me understand

[downsized]

Newbie here.....

My husband and I finally made the call to a recommended BK atty. I believe we need to file 7 because I don't think we could afford a 13. We're living on unemployment and my part time pay and there's nothing left after the mortgage, cars, food...necessities.

I've been lurking and just want to clarify that I get it:
1. We would like to keep hour home. We're about $30,000 upside down, but the payment is affordable....probably less than renting for a family of 5, so I don't think we have much other choice on the house. Keeping the home, no problem since we have no equity?

2. We have 2 newer cars with loans. One leased and one purchased. Those must go back, correct? If we want to keep one of them, could it be the purchased car in a situation where we buy it back from the Trustee? And if we do that, is the Trustee's price fair market value or is it figured some other way?

3. Since we're sure we're filing soon and know we want to keep the house and one car, we need to keep the mortgage and auto loans current but stop paying the credit cards all together? Or should we pay a few bucks on the cards to keep them from getting sent off to collections?

[DebtEnder]

I'll give ya my take, take it as ya will.

To question 1
1. We would like to keep hour home. We're about $30,000 upside down, but the payment is affordable....probably less than renting for a family of 5, so I don't think we have much other choice on the house. Keeping the home, no problem since we have no equity?

In a chapter 7 the trustee is looking for things of value that have no secured liens against them. Even then even if you had value in your home if your state had a high enough exemption you would still be able to keep it. There is little concern of what you pay after chapter 7, even if the judge denies your request to reaffirm the house( not recommended you reaffirm BTW) as long as you make the payments it is HIGHLY unlikely the bank is going to foreclose on a house with negative value and kick out paying customers.

The big issue with what you pay monthly comes into play if you make over the median level for your state and family size and have to use the means test to keep in a chapter 7. Look in other parts of the forum if you have questions about the means test, tons of stuff on it

On to two.
2. We have 2 newer cars with loans. One leased and one purchased. Those must go back, correct? If we want to keep one of them, could it be the purchased car in a situation where we buy it back from the Trustee? And if we do that, is the Trustee's price fair market value or is it figured some other way?

Referring back to the previous answer unless you put down significant down payments on the car it is unlikely the trustee will have any interest in a secured assets with negative equity. Check your state exemptions to see how much positive equity you can have in a vehicle to exempt it if you think you have any at all. One caveat however, some lenders I think Ford and Chrysler are big on demanding they get reaffirm agreements, if not they do repo the car even if you do stay current on payments. So here I'll say your mileage may vary Otherwise again, it's the lender that matters with a secured asset, not so much the court.

On to Three,

3. Since we're sure we're filing soon and know we want to keep the house and one car, we need to keep the mortgage and auto loans current but stop paying the credit cards all together? Or should we pay a few bucks on the cards to keep them from getting sent off to collections?

If you know you are going to be filing in the next few months, and can deal with some phone calls stop paying on ANY unsecured debt. Credit cards, medical bills, etc. Save the cash for attorney, filing fees and the inevitable weirdness that happens once you file.