Plz Help--Questions about Ch7 in TX

[Overmihead]

Hi all. First time post for me. I have learned a lot here already, but have some specific questions if any of you are willing to give me some input.
Brief synopsis of our situation:
Hubby & I have 3 kids & live in TX. We have gone through some financial struggles, but always managed to get through, with help of family sometimes and more debt on credit card (often). We have never defaulted on a payment on anything. Big, sparkly credit scores and qualified for all the best rates/deals, despite the lean times. Hubby is 1/2 owner of a small business started 4 years ago and I am a SAHM for a while longer until our youngest starts school. Like most everyone, this economy has hit us hard + we had some big medical expenses and major vehicle repairs in the past 6 months. Then 4 months ago, hubby had to reduce his salary to keep the business afloat. We purchased our current home a year and a half ago, and it was a stretch for us to make it with the new, much bigger mortgage even on his original salary, but this is the home we plan on raising our kids in and staying in, probably permanently (this is the 3rd house we have owned). Since the salary cut, we have had to start using credit cards...it is to the point that we are having to use them to pay electric bill, groceries, gas, etc. We kept thinking the reduction would just be for a couple of months and that things would turn around, but they haven't yet, and no telling how much longer he will be on reduced salary. In the meantime, we are about to run out of room on the credit cards and soon will be unable to make minimum payments on them. We have not missed or been late on a single payment thus far, but I am so stressed at the thought of bankruptcy, that I'd rather file before we are in default and being harassed. I have looked up the means test, and we are under the monthly amount for a family of five, based on the reduced salary. And even if we were above it, I think we should qualify. We have huge health insurance costs (private insurance for all 5 of us is over $800/month directly out of our pocket...+ co-insurance, etc.) It may or may not be relevant to mention the following:
We own 2 vehicles outright. (150K miles & 225K+ miles, and are happy to keep driving them as long as they'll run)
We had 2 major appliances go out just before the salary cut 5 months ago and had to put the new ones on credit card (about $2K).
We had to put all of Christmas expenses/presents on credit card.
We have had to put a few thousand in medical expenses on credit card in the past 4 months.
Total c.c. debt right now is probably up to 45K.

Questions:
1. Since we know, and have known for a couple of months, that, barring a miracle, we would probably have to go the route of bankruptcy, are we getting ourselves in big trouble by continuing to use the cards to live on? (I don't know what else to do right now)

2. There is no danger of losing our home, correct? (We are doing whatever it takes to continue making the mortgage payments as usual)

3. Timing-wise, do we need to worry about how close to tax time we file? (I'm guessing we should get several thousand back...but will need that to live on post-bankruptcy, til hubby's salary is restored).

4. How can I find a good attorney, other than googling "good bankruptcy attorney"? I know it is recommended to visit several, but I don't think that will be possible. Hubby's salary is cut, but not the hours he needs to be at work. And childcare is always an issue. So it would be really nice to be pretty confident in who we choose to meet with first, in hopes that will be the one we go with. Can names be posted here? Or could someone send me a message if you know of a good one in either the Austin or S.A. area? And maybe a ballpark on the price?

5. We have about $1,500 of furniture financed that we'd like to try to settle on and not include in the bankruptcy. Is this common? Difficult?

6. The debtors that we don't want to include in the bankruptcy....will anything change with them? Will they find out about it and raise our rates anyway?

Sorry this is so long...thank you to all who have taken the time to read the post

[JEM]

Questions:
1. Since we know, and have known for a couple of months, that, barring a miracle, we would probably have to go the route of bankruptcy, are we getting ourselves in big trouble by continuing to use the cards to live on? (I don't know what else to do right now)

2. There is no danger of losing our home, correct? (We are doing whatever it takes to continue making the mortgage payments as usual)

3. Timing-wise, do we need to worry about how close to tax time we file? (I'm guessing we should get several thousand back...but will need that to live on post-bankruptcy, til hubby's salary is restored).

4. How can I find a good attorney, other than googling "good bankruptcy attorney"? I know it is recommended to visit several, but I don't think that will be possible. Hubby's salary is cut, but not the hours he needs to be at work. And childcare is always an issue. So it would be really nice to be pretty confident in who we choose to meet with first, in hopes that will be the one we go with. Can names be posted here? Or could someone send me a message if you know of a good one in either the Austin or S.A. area? And maybe a ballpark on the price?

5. We have about $1,500 of furniture financed that we'd like to try to settle on and not include in the bankruptcy. Is this common? Difficult?

6. The debtors that we don't want to include in the bankruptcy....will anything change with them? Will they find out about it and raise our rates anyway?

Sorry this is so long...thank you to all who have taken the time to read the post

1. You MUST stop using the credit cards. Today.

2. If you are current on the mortgage--you should be able to file a Ch. 7 and keep the home.

3. From my research, it's hard to protect cash on hand during bankruptcy in TX. (I'm in TX also) If you use federal exemptions vs. TX exemptions, you can protect "some" cash.

4. We haven't started interviewing attorneys yet. Here in the next couple of weeks we will be.

5. Not sure the answer to this.

6. I believe you have to include all creditors. However, I believe you can chose to pay them AFTER you file. BUT, I've read that very few credit accounts survive the filing. Meaning, they'll close you down once they get wind of the bankruptcy.

[LimpDisc]

Welcome to the forum.

Question 1. If you're planning on filing BK you need to quit using the CC's

Question 6. You don't get to pick and choose what creditors wil be included in BK.

[Overmihead]

Thank you JEM and LimpDisc.

If we stop using the credit cards, we will have to stop paying at the same time...which doesn't seem to work in our favor either. Chasing our tail I'm afraid. The only other possibility is trying to borrow money from a relative to keep paying the minimums for another month or two after we quit using them ??? Would this make a difference?

Has anyone out there used cc for living expenses up to the time of filing Ch.7 and come through okay?

And on point #6, does this mean that any of our creditors (including mortgage company) can raise our interest rate/change our terms, even if we never have a hiccup in our payments to them?

I appreciate the replies and hope more will chime in. I'm going to look up some attorneys in Austin right now and would still love to hear from anyone with input and/or an attorney recommendation.

[JEM]

We were in the same boat--we couldn't pay all the minimums AND not use the CC's. We were using what available credit we had to buy groceries, or pay utilities, get gas etc...

The cards we used recently, we made minimums on those--the ones we hadn't used recently, I stopped those so that we could afford to make the minimums on the cards we needed to, AND stop using credit at all.

On secured loans, auto and mortgage, the terms will stay the same after you file.

Edited to add...don't borrow the money from a relative. You will have to include that relative as a creditor. You don't want to have any "money" transactions with relatives right now.

[LimpDisc]

Get free consults from several attorneys. That's where you will get the best advice on your overall situation.

Using the CC's will need to stop because you can't see a BK attorney and continue to use them. As suggested by JEM, I would at least try to make minimum payments on the cards used recently and stop payments on the rest.

[Overmihead]

Thx again, to both of you. Will quit using the CCs, try to pay what we can toward them, and try to set up a consult w/an attorney in the next week or so.
If it's not a good idea to accept any money from family, maybe if it comes down to it when can just ask them for a grocery store gift card to help get us through.

[JEM]

Thx again, to both of you. Will quit using the CCs, try to pay what we can toward them, and try to set up a consult w/an attorney in the next week or so.
If it's not a good idea to accept any money from family, maybe if it comes down to it when can just ask them for a grocery store gift card to help get us through.

Or just to have them bring you over some groceries, or fill up your gas tank for you.

[Overmihead]

Or just to have them bring you over some groceries, or fill up your gas tank for you.

Yes! That'll work

One more general question that popped into my head:
If we do an initial consultation in the next couple of weeks, but wait a few months before actually retaining attorney & filing, will the date of our initial consultation ever be brought up/scrutinized?

[JEM]

Yes! That'll work

One more general question that popped into my head:
If we do an initial consultation in the next couple of weeks, but wait a few months before actually retaining attorney & filing, will the date of our initial consultation ever be brought up/scrutinized?

If you continue to use CC's after that...possibly.

But if you stop using CC's and go have a consult with a few attorney's, then no, I don't believe I've read about anyone being questioned why they waited a few months (some here have waited years!) to file.

[Overmihead]

If you continue to use CC's after that...possibly.

But if you stop using CC's and go have a consult with a few attorney's, then no, I don't believe I've read about anyone being questioned why they waited a few months (some here have waited years!) to file.

OK, thx. No, we are not going to be using them.

[keepmine]

As others suggested, stop using the cards as well as, stop paying the cards. Use the money you were sending to the cc companies for your normal living expenses. If you still can't make ends meet, you have a problem bk can't fix.
You need to figure out a budget going forward. After all, you still have to support yourself post bk.

[Overmihead]

As others suggested, stop using the cards as well as, stop paying the cards. Use the money you were sending to the cc companies for your normal living expenses. If you still can't make ends meet, you have a problem bk can't fix.
You need to figure out a budget going forward. After all, you still have to support yourself post bk.

Thx, keepmine. Hubby's salary cut should end at some point this year, we're pretty sure...hopefully by mid-year. With full salary, we can make it, but not with all of the CC payments we have now. So I know, if we can survive the BK, that we can come through this okay. I hate the CCs (though it is our own fault for using them), I hate how our whole way of thinking has taught us not to wait & save up, but to buy now and pay later. I never want to go that route again, and I want to make sure our kids don't either.

[nickifan]

//One more general question that popped into my head:
If we do an initial consultation in the next couple of weeks, but wait a few months before actually retaining attorney & filing, will the date of our initial consultation ever be brought up/scrutinized?//

I asked this exact question during one of my consults. Attorney said that the creditor would have to "bring an action" to get the date...in other words, by contesting at an adversary proceeding.

As others suggested, stop using the cards as well as, stop paying the cards. Use the money you were sending to the cc companies for your normal living expenses. If you still can't make ends meet, you have a problem bk can't fix.
You need to figure out a budget going forward. After all, you still have to support yourself post bk.

I also asked, what if I simply HAVE to keep using CCs? Attorneys all cited the usual preference that I "stop using for 90 days", but if the expenses are for normal, critical expenses -- food, gasoline, health insurance premium -- they felt it would be okay. Still, I was advised to try to make minimum payments to the CC's I still used. I'm trying to keep those cards to 3which are just about maxed out (the result of severe cuts by the CC to my credit line, of course.)
[I]]Yes, when you're still unemployed...you have a "problem BK can't fix." I get that. I'm trying desperately to find a job, preferably before filing...I've been fortunate to have a few dear friends helping me keep a roof on my head. But that can't go on forever of course. I still wrestle with the timing (not using CCs/filing)...but it may be out of my control with NO income[/B][/B][/I]

P.S. I'm in TX too but not Austin. Still need to fine-tune with an attorney whether to go for state or fed exemptions...I'm thinking now that if there is little cash in my CU account I don't need to protect it...the state exemps otherwise are very friendly. My main concern is protecting my 2002 Toyota, worth at least $7K, it appears.

[Overmihead]

Hi nickifan,
Thx for the insight! I was under the impression your vehicle would be exempt...since most people need a vehicle for their livelihood. ??
Is it financed or do you own it outright?

I'm trying to take deep breaths and actually get more than 4 hours of sleep at night. We have all of our available CCs about maxed anyway, due to having to rely on them so much these past 5 months for our household bills. So we won't be using them anymore. Will try to make what payments we can this month, perhaps next...but we have nothing in savings and our checking account is completely depleted at the end of each pay period. So if (when) it comes down to making a CC payment or paying the electric bill, gas, etc....the matter is going to be out of my hands. We will do what we have to do. If my hubby's salary is not restored within the next couple of months, then we will have to use inc tax refund to hire an attorney and file BK. Best of luck to you..this is so stressful. I really wonder what toll it will take on me & my DH.