Having trouble keeping our heads above water.

[rusty95]

It is getting harder and harder. We have gotten over our heads with charge cards. All of our interest rates have gone up to 29%. And has increased our monthly payments to the point it is hard to pay the cards anymore. We make good salaries, but we have a big mortgage and high taxes where we live. My wife has to declare 9 dependents during the year to bring home enough to pay the bills, I have to declare 3. At the end of the years we get almost no return back. We just did our taxes and this year we owed federal tax. Our accountant told us that next year we will owe again if we don't lower our dependents during the year. We have no savings top speak of.
We owe aprroximatly 45,000 to cards. Anmd I don't know how it got away from us.
We bring home $8800 a month and our monthly bills come in at $7300 that dosen't include car insurance, water bill and others that come in every 4 months. That leaves us very little for living. We usually have about $250 a week and that goes for food and gas to get to work. We have taken out loans from our 401k's to help pay down some cards but that really dosen't help much. We pay the bills on time to try to keep our credit good.

Well you get the picture. I am sure most of you have been in my shoes. What are my options with bankruptcy?

[blncd1]

It is getting harder and harder. We have gotten over our heads with charge cards. All of our interest rates have gone up to 29%. And has increased our monthly payments to the point it is hard to pay the cards anymore. We make good salaries, but we have a big mortgage and high taxes where we live. My wife has to declare 9 dependents during the year to bring home enough to pay the bills, I have to declare 3. At the end of the years we get almost no return back. We just did our taxes and this year we owed federal tax. Our accountant told us that next year we will owe again if we don't lower our dependents during the year. We have no savings top speak of.
We owe aprroximatly 45,000 to cards. Anmd I don't know how it got away from us.
We bring home $8800 a month and our monthly bills come in at $7300 that dosen't include car insurance, water bill and others that come in every 4 months. That leaves us very little for living. We usually have about $250 a week and that goes for food and gas to get to work. We have taken out loans from our 401k's to help pay down some cards but that really dosen't help much. We pay the bills on time to try to keep our credit good.

Well you get the picture. I am sure most of you have been in my shoes. What are my options with bankruptcy?

I completely understand. this is a personal decision for you. we decided after exhausting every possible angle, loan mod (grrr, banks...another topic), extra job, cutting out extras and after 2 LONG exhausting years of losing time with my kids because of being obsessed with saving the house, no vacations, no friends over for game night (how can you when you are so down, no money and VERY embarrassed) we are heading towards 7 after only looking at 13 (which was impossible to do). i have cried over losing the house for months and just today began getting a bit excited about living debt free. it will be so emotional and embarrassing to rent again, but as a family we CAN and WILL live again.

[BobMango]

...We bring home $8800 a month and our monthly bills come in at $7300 that dosen't include car insurance, water bill and others that come in every 4 months. That leaves us very little for living. We usually have about $250 a week and that goes for food and gas to get to work. We have taken out loans from our 401k's to help pay down some cards but that really dosen't help much. We pay the bills on time to try to keep our credit good.

Well you get the picture. I am sure most of you have been in my shoes. What are my options with bankruptcy?

You certainly can file for bankruptcy, my concern (based on limited information) is that a Chapter 7 might be hard for you. Chapter 13 is not the end of the world, just takes a long time to work through generally. Depending on the size of your family you may be over the median for the means test in your state. Add to that that you have some disposable income (not enough I know) now, you will have quite a bit more after your debt has been discharged, meaning Chapter 13 is the likely option.

Your best move at this point is to schedule a free consult with an attorney, preferably three or more. This will help you understand what your options are and how best to proceed.

[rusty95]

Right now we are paying everything on time. But once we lower our weekly dependents so we won't owe taxes at the end of the year we are done.
I found a median family income calculator on the internet and filled it out and we passed it. It appears we make alot of money but we also have alot of debt. Just on a larger scale.

When we got married 17 years ago we accumulated alot of debt, and we declared it 15 years ago and it was discharged. Are there any new laws besides the medium family income calculator.

[LSUTiger32]

Rusty.....part of being on this forum (and this is my opinion) is to help people because I received so much help through my process. I would love to see some more of your information like monthly bills because man with $8,800 a month coming in you can work through $45,000 in credit card debt if you have a sensible budget. Sounds like you have a crazy high mortgage. As far as the exemptions on your check, you don't want a refund. How much are you having to pay on federal?

The interest rates are sick and I would talk to the cards about either lowering them or risk losing you to another card. Is your credit still decent enough to get a credit card with a 0% intro rate?

BK might be the way you have to go, but I think with your income you are likely to be pushed to a 13 and I would not file a 13. Remember, buy food, pay the house (NEVER get behind on your mortgage), pay the lights and water and go back to basics. If there is nothing left for the credit cards right now so be it.

[backtoschool]

I think with $8800 a month coming in, the OP will have to have very large medical or other irs and bankrupcy court approved expenses to avoid a chapter 13.

[rusty95]

Rusty.....part of being on this forum (and this is my opinion) is to help people because I received so much help through my process. I would love to see some more of your information like monthly bills because man with $8,800 a month coming in you can work through $45,000 in credit card debt if you have a sensible budget. Sounds like you have a crazy high mortgage. As far as the exemptions on your check, you don't want a refund. How much are you having to pay on federal?

The interest rates are sick and I would talk to the cards about either lowering them or risk losing you to another card. Is your credit still decent enough to get a credit card with a 0% intro rate?

BK might be the way you have to go, but I think with your income you are likely to be pushed to a 13 and I would not file a 13. Remember, buy food, pay the house (NEVER get behind on your mortgage), pay the lights and water and go back to basics. If there is nothing left for the credit cards right now so be it.

My monthly bills with charge card payments is 7300. My mortgage alone with insurance and taxes is 4400. The 8800 includes overtime which my wife does that can disappear at any time. So subtract about 800 if the OT disappears. Also we claim 11 dependants 3 for myself and 9 for my wife) during the year to have more weekly money. At the end when we do our taxes we claim 3 and had to pay 1800. Th e accountant said we should lower our dependants, if we do that we will pay another 200 a month in more taxes. 8800 sounds like a lot but it isn't going to far. Like I said before if I have to pay more taxes I am done.

My fico score is 650 and my wifes is 675. So I am not getting any discounts on interest.

[backtoschool]

My monthly bills with charge card payments is 7300. My mortgage alone with insurance and taxes is 4400. The 8800 includes overtime which my wife does that can disappear at any time. So subtract about 800 if the OT disappears. Also we claim 11 dependants 3 for myself and 9 for my wife) during the year to have more weekly money. At the end when we do our taxes we claim 3 and had to pay 1800. Th e accountant said we should lower our dependants, if we do that we will pay another 200 a month in more taxes. 8800 sounds like a lot but it isn't going to far. Like I said before if I have to pay more taxes I am done.

My fico score is 650 and my wifes is 675. So I am not getting any discounts on interest.

If you claim dependents that are not claimed on your 1040 tax return as tax withholding, that will not necessarily keep you from a chapter 13. Exemptions are based on what you claim on your tax returns in most districts. If you have 11 dependents claimed on your 1040 then you will most likely be a chapter 7.

Credit card debt will not be counted towards your monthly expenses when deciding whether you are a chapter 7 or a chapter 13.

[cupcake]

What state do you live in and how many people are living in your household? Also, how much exactly are you currently paying per month on your CCs?

[asti]

Right now we are paying everything on time. But once we lower our weekly dependents so we won't owe taxes at the end of the year we are done.
I found a median family income calculator on the internet and filled it out and we passed it. It appears we make alot of money but we also have alot of debt. Just on a larger scale.

When we got married 17 years ago we accumulated alot of debt, and we declared it 15 years ago and it was discharged. Are there any new laws besides the medium family income calculator.

Here is the nolo means test, not sure if its the one you used or not...
http://www.legalconsumer.com/bankruptcy/nolo/

[OhioFiler]

Can you itemize your monthly expenses for us Rusty? It would be helpful to see them as a tool to guide your Chapter 7 qualifications.

[lovebirds]

You need to stop paying on those credit cards. You can barely keep your head above the water. Food, transportation, housing and mandatory insurance comes before cards.

[1kentwon]

To Rusty95 "keeping head above water"

Your situation sounds real familiar - what I call the harder you try the harder it gets repeating syndrome - One thing I did before I decided on bankruptcy -chapter 7 was to make an appointment with Greenpath. Very helpful information to begin with, help determine if you have options or not. GP rep sits down and does a realilistic budget with you on their computer software and prints it out for you. I had a glimmer of hope that I could pull out of the situation - so I indeed was able to create a budget, stuck with it for 6 months. I paid Greenpath $50.00 dollars a month to take my money to administrate negotiated payments with my creditors. Charge for service I do not believe ever exceeds $50.00 dollars a month. However, as the months progressed on the budget, my daily living expenses kept going through the ceiling. Just was not enough for everyday needs, on the simplest of levels while I continued paying the negotiated monthly payments with the creditors. I kept cutting my spending. I got rid of cable, buy cloths at second hand shops, clipped and used coupons, decreased driving the car and using up the gas except for the driving I planned ahead of time. I went to the library and took out books and movies, went to public beaches that do not charge for admission, etc. for rec. activities. And still my established budget held for only six months. I finally walked into Greenpath, had another talk with my counselor, and I told him the budget just was not feasible ANY LONGER and I felt I had no choice but to go ahead with bankruptcy. However, I did feel confident that I did everything I could possibly do before excepting the reality that I HAD to file Chapter 7. Two and a half years of dealing with a losing battle and all of its associated stress. WHAT a relief, a total feeling of relief. I knew what I had to do, excepted it. I am sure this story is similar to the experiences of many others. I do feel that using Greenpath services helped give structure to my financial, stressful nightmare. You may want to talk to GP, or an organization similar to GP, about your budget, and keep reading these wonderful posts for helpful information.

[haylo]

Like one of the other repliers stated above this is an all to familiar scenerio in America today. I found this article for you, hopefully it can give you a little more insight on deciding if filing bankruptcy is the best option for you.

Here is the Article:

http://www.filingforbankruptcyonline.com/resources/bankruptcy/filing-for-bankruptcy/make-sense.htm

I also copy and pasted it below, but it might be easier to read on the link above. I hope things work out for you.

"Since 2008, high unemployment rates, plummeting housing prices and mortgage rate adjustments have got many Americans searching for a way to get out from under seemingly insurmountable debt. It's no wonder that many people have become so overwhelmed by reduction in income combined with overextended credit lines that they are running out of options and considering bankruptcy. In fact, 2008 witnessed one of the highest rates of bankruptcy filings in history, the seventh highest to be specific.

So when does bankruptcy make sense as a way to turn ones financial situation around? The answer is not specific, but some general guidelines posed by financial experts are as follows.
When Debt Reduction is Impossible Without the Courts Help

The purpose of the bankruptcy court, in essence, is to function as a mediator between a debtor and his or her creditors. The court, or more specifically, the bankruptcy trustee assigned to the case, is charged with the responsibility of examining a debtors income (or lack thereof) against creditors claims against him. If it is found that repaying the debt outside of bankruptcy is not feasible then the court will step in to either eliminate the debt, or force the creditors to accept a realistic repayment plan.
If Debts Cannot Realistically be Repaid in 3-5 Years

The specific time frame varies depending on who you ask, but if debts cannot be repaid within three to five years, then bankruptcy should be considered as an option. That doesn't mean bankruptcy is necessary, but rather should be weighed against other alternatives.
When a Job Loss Leads to Spending Retirement Assets

This one is important. All to often, a job loss or other reduction in income will force many Americans to begin withdrawing funds from and IRA, 401k or other retirement account. While a honorable effort, the most frequent outcome of this method is the debtor will find themselves in the same situation a few months down the road, only now without their nest-egg. Filing bankruptcy at this point loses some of its effectiveness, as the retirement accounts are gone and can no longer be protected.

Retirement assets are protected under US Bankruptcy law, so many financial experts advise against withdrawing any funds before getting legal advice from a bankruptcy lawyer.
When Mortgage Adjustment Creates an Impossible Situation

Recently, vestiges of the sub-prime mortgage market have been coming back to haunt honest homebuyers. Sold terrible loans that are now adjusting to unmanageable payments, these people are facing the loss of their home. While the Obama Administration has been making efforts to force banks into modifying mortgages, many refuse.

Now facing a foreclosure lawsuit, bankruptcy can get the court to step in and stop the foreclosure process, force banks to accept a lower payment, and allow homeowners a way to get caught up on delinquent mortgage payments.
What about Debt Settlement?

While there are some legitimate organization that will attempt to negotiate a creditors' claims against a debtor, most are pretty much a scam. Any company that asks to give them money up front should be avoided. It is always wiser and more cost effective for debtors to negotiate for themselves.
The Bottom Line

There is no one "rule" that will help struggling Americans decide if bankruptcy is the best choice for their situation. The best thing to do is attend pre-bankruptcy counseling to find out more about the options available, or talk to a financial expert or bankruptcy lawyer to learn about the advantages and disadvantages of petitioning the bankruptcy courts for protection and help."

[rusty95]

What state do you live in and how many people are living in your household? Also, how much exactly are you currently paying per month on your CCs?

I am paying about 1300 a month.