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I guess I'm going to end up filing - do I stop paying?

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    I guess I'm going to end up filing - do I stop paying?

    Filing BK has been something on the table as a possibility for about a year or so. My husband, who is self-employed, did pretty well in business last year, and I had a part-time job for awhile, so all in all we were doing okay.

    Because he was so busy, and is the better earner (I had a minimum wage job vs his real estate appraisal business), he asked me to quit last summer, so I did. My time at work took away time from him working when he needed to devote all his attention to his business.

    After Thanksgiving, business took a dive, and we are waiting for it to pick back up. December's earnings were $2900 and this month is only slightly more at this point.

    I have about $40k in credit card debt that is in my name. He has about $23k in his name. Both our names are on the house and HELOC. The vehicles we have (one paid for, one being paid for) are in his name.

    With the business slow down, we find our cash on hand to be limited. We are being as careful as possible, but we really need to conserve. My debt repayments total ~$1k/month, his about $680. Taking my credit cards out of the equation, our financial needs are a minimum of $4000/month.

    I was recently approved for the Chase hardship program on my largest card. I wish I had found out about that sooner, but I did not know it was available. I was hoping the payment would drop this month, but they told me I have to make this month's payment and that would then trigger the hardship agreement ($280/month for 5 years at 0% vs the current variable rate of 9.24% and payments over $330/month).

    He just had a large order cancel tonight, so we find ourselves with less income than anticipated. We have about $8300 in the bank in his business account. We have been striving to pay off our debt and use only cash, which leaves us pretty much next to nothing to put in savings.

    Tonight I canceled the pending payment on my above-mentioned Chase card. It's due on the 30th. I have never missed a payment on any card, and I am freaking out at the prospect of doing so, even though I know that common sense says to pay things like mortgage, etc first.

    I don't know if I'm doing the right thing. We are stressed to the max. Our mortgage payment is $545, the HELOC about $165. We probably could not rent any cheaper. We are at this time current on all bills.

    We have baby #4 due in early May. He is hoping to wait until after the medical bills are in and have me file Chapter 7. I'm fine with doing that. He does not want to file at all b/c he's afraid it will have a negative effect on his business. He says that sometimes the companies that order appraisals pull credit reports, and his fear is that he will lose business if he declares BK. So anyway, I'm willing to take the heat, so to speak.

    My creditors are:

    Chase x 2 (one card has only $40 on it)
    Amex (jerks)
    1st National Bank of Omaha
    Discover
    Bank of America - I would probably keep paying them

    I forget what the exemptions are in Oregon, but with the state our house is in, I doubt that we have enough equity for my share to be significant. He wants to take me off the house with a quit claim deed, even though I tell him this is probably a bad idea.

    If I do stop paying my cards, what happens? Can we drag it out 90-120 days before I file BK? I have looked for jobs, interviewed once, but we live in a small town/rural area. There isn't much here. You can't tell I'm pregnant, as I'm overweight, but I would have to leave any job I might get in a few months. It would be senseless to pay for childcare.

    Could someone please offer advice? I've been reading but I just feel lost. I know no one can offer legal advice, but I just wonder what others would recommend given my situation.

    Thank you.
    Filed 5/31/11 341 & Report of No Distribution 7/28/11 Discharged & Closed!! 9/29/11
    "What I won't accept or buy any longer is that my credit score defines who I am. Screw that."

    #2
    Oh, a couple other things -

    We have 2 joint bank accounts. Well, one belongs to my husband's business, but my name is on it too. Can anyone touch those?
    Filed 5/31/11 341 & Report of No Distribution 7/28/11 Discharged & Closed!! 9/29/11
    "What I won't accept or buy any longer is that my credit score defines who I am. Screw that."

    Comment


      #3
      The business - is it a corporation of any type?
      All information contained in this post is for informational and amusement purposes only.
      Bankruptcy is a process, not an event.......

      Comment


        #4
        No, it is a sole proprietorship.
        Filed 5/31/11 341 & Report of No Distribution 7/28/11 Discharged & Closed!! 9/29/11
        "What I won't accept or buy any longer is that my credit score defines who I am. Screw that."

        Comment


          #5
          Hi NewPage,

          I went for about a year and not a peep. I just filed last week.

          When I stopped paying I didn't know I could send a letter to ask the creditors not to harass me. So I changed my cell phone provider and number and didn't give the new number out to anyone who would put it on my credit report (banks, etc). Look on the forum for how to avoid that kind of stress - you don't need collection agencies harassing while you're pregnant.

          I was kind of in your situation except my contracting business took a dive along with my health for a time.

          Comment


            #6
            Thanks for the replies. I went ahead and made the payment that I canceled, as we are trying to ride out until 2/22 when the remaining credit card legislation goes into effect. He wants to avoid universal default on anything I might use cc-wise (groceries, etc), so maintaining for now, but after this month payments will most likely stop.

            1) Should he quit-claim me from the house?

            2) Should he remove me from the business bank account? HE is the business; I am not. He is a sole proprietor. What about our regular joint account?

            3) If I send cease & desist letters, they can't call me?

            4) Should utilities, etc be in his name only? We have our natural gas, electricity, and HELOC as well as car & home insurances on auto-withdraw from our bank accts.

            5) Should bank accts have only enough money to pay bills?

            6) When do I get an attorney? When I am ready to file?
            Filed 5/31/11 341 & Report of No Distribution 7/28/11 Discharged & Closed!! 9/29/11
            "What I won't accept or buy any longer is that my credit score defines who I am. Screw that."

            Comment


              #7
              3. Depends on what state you are in. The FDCPA (federal) only applies to third party collection agents; it completely protects the original creditors. However, some states have debt collection laws that include the OC which means they cannot harass you. If your state does not cover this, you are sort of stuck. Google Voice, or a cheap prepaid is your friend. Make sure you change all your numbers before you quit paying.

              5. They cannot touch your accounts until they sue and win a judgment. This is not likely to happen the first few months.

              6. Can't hurt to talk to attorneys now. Most give first consult for free.
              First consult: You go now, no CH 7 for you. You spent entire buffet. 13 has a 95 percent payback. (Owwwch) On to next consult....

              Comment

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