Having trouble keeping our heads above water.

[rusty95]

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.

I will get them to you later. What do you need. Which expenses. Elec, oil , cable.....

[rusty95]

The whole problem started with the house we bought. It was a mess. I wanted to get it done and got 5 Home depot cards. Maxed one out and the others are high. Didn't plan on it but it happened. No luxury stuff on any of my cards. All the other cards are up high from just general living expenses.

Yesterday my wife took a 2500 loan from her 401k in trying to get some of this in order. But it is like a drop of water in the ocean.I have also lowered my 401k from 9% down to 2%. Which will hurt me with my taxes next year. And if I get hit with the AMT tax next year, I don't know what I will do.

[OhioFiler]

I will get them to you later. What do you need. Which expenses. Elec, oil , cable.....

All of them. What is your typical monthly budget look like?

[rusty95]

All of them. What is your typical monthly budget look like?

Mortgage--- $4365 but my taxes went up so that will too.

Second mortgage - $555

Car Lease---$399

Electricity---$285 thats on a monthly budget.

Oil--------$250 monthly budget.

Cable---- $140

cell--- $100

Life insurance my wife and myself--- $208

Train---- $75 we have a transit deduction in our payrolls Total train is $295 My wife drives to the train then takes the railroad to the city then has to take a train to her job.

Misc----$150


All charge cards---- $1385


Total bills and charge cards are $7912. That is the total for my February bills.
We usually have about $250 to $300 left over per week. That goes towards gas ($75), food ($80), subway seperate from the train ($40). Anything left over goes towards bills or savings (which there isn't any). We are usually short and take from the next month. We try to make it up on the months with the extra week. I can cut out the cable and cell, but it dosen't really make a difference.

This is a mess.


This also dosen't include car insurance, water bill and other small stuff. I find the money for them, but don't know where it comes from.


Once we dump the dependants down it will be a real mess.

[Mi Bankruptcy]

You said you are bringing home about 8800 a month. So, from the numbers above you should have an extra $1,000.00. Do you know where this is going? If not, your going to have to figure it out. Good thing is your looking at doing this before you are late on everything. This should help you.

gas 75.00
food 80.00
train 40.00
misc 150.00
CC 1,385.00
Car lease 399.
Elec 285.
cable 140.
Ins 208
Mtg $4,365
2nd Mtg 555

[rusty95]

Yes the $1000 is going for weekly expenses. That comes out to about 250 a week. Gas and food eat up most of it. 75 for gas and about 80 for food. The rest goes towards other weekly expenses that crop up. There isn't alot left.

Go over my list again, you left some things out.

[Klesko]

What state are you in? How much is owed on your house 1st and 2nd?

You are paying $4900 a month for mortgage which is 58% of your income, that is insane.

[rusty95]

What state are you in? How much is owed on your house 1st and 2nd?

You are paying $4900 a month for mortgage which is 58% of your income, that is insane.

My first mortgage is $4365 that includes the house insurance and real estate tax. I pay over 11,000 a year in taxes. I owe about 485,000 on the house. The second mortgage is 555 a month and I think I owe 46,000 on that. And I am taxed to death in the great state of New York.

[BrokeOR]

Rusty,

I will sound like a broken record to others who have heard this before, but when was the last time you got a market value report on your home from a reputable, licensed realtor? A $4,400 dollar PITI (half your take home pay) would suggest a whole lot of houseor a crazy mortgage or both, but if you don't know your home's current value, how do you know if it's worth all this pain to keep it?

You are focusing on your credit cards. (Believe me-after having lived on ours for a year and a half, in large part to chase a house payment, I totally identify with the sky-high interest rates. ) But you should also get realistic about what your home is actually worth. Don't know what part of the country you live in, but most have seen values plummet.

If, after finding out the real value of your home in today's market, you find out you have a bunch of equity, your problem could be solved by simply selling the house and renting/buying something cheaper. A great option that allows you to get our from under what's really killing your budget and into something that you can afford plus pay off/down your credit cards and possibly use the $ as a negotiating tool to lower your rates on any balances left.

If, however, you find out you have no equity or very little equity, you have another situation to deal with. Many, many people are finding out that instead of being an investment, their primary home has become a liability. They find out (as we did) that they are little more than renters with a very expensive mortgage and maintenance liabilities, as well. In our case, a home that we bought the traditional way (20% down, no funny stuff, a great fixed interest rate) has decreased in value nearly 50%-yes, half-since the height of our market in 2007, and 35% since we bought it 6 years ago. But our neighbors, who have been here for 10-20 years, all also have suffered the downturn and some of them are actually selling to get their equity.

Bottom line: BK is a very personal decision, but one you shouldn't make until you really know what your assets are.

[Backlyn]

I want to know how you are claiming all those dependents on your paychecks if in fact they do not exist. I do not know what your house value is at but at my 341 hearing the trustee told this other couple that they could certainly downsize the house. I reside in PA and this couple had a home valued at $400K and he didn't think it was going to fly to be able to keep it. They asked me about my home first and I don't have a lavish house but it is my home. We easily qualified for chapter 7 with my husband being a carpenter and having really lousy years of late and we still are over in assets by $9K and have to go to court next week to buy back my SUV which I have my title to. I know how it is to be making good money but have massive debt that it has to go to but when the credit card debt is gone and you are paying a more realistic mortgage, you will have a lot left over as long as you both have your jobs. Just be sure to research every avenue before taking action. I should have tweaked a few things before filing but hindsight is 20/20.

[rusty95]

Rusty,

I will sound like a broken record to others who have heard this before, but when was the last time you got a market value report on your home from a reputable, licensed realtor? A $4,400 dollar PITI (half your take home pay) would suggest a whole lot of houseor a crazy mortgage or both, but if you don't know your home's current value, how do you know if it's worth all this pain to keep it?

You are focusing on your credit cards. (Believe me-after having lived on ours for a year and a half, in large part to chase a house payment, I totally identify with the sky-high interest rates. ) But you should also get realistic about what your home is actually worth. Don't know what part of the country you live in, but most have seen values plummet.

If, after finding out the real value of your home in today's market, you find out you have a bunch of equity, your problem could be solved by simply selling the house and renting/buying something cheaper. A great option that allows you to get our from under what's really killing your budget and into something that you can afford plus pay off/down your credit cards and possibly use the $ as a negotiating tool to lower your rates on any balances left.

If, however, you find out you have no equity or very little equity, you have another situation to deal with. Many, many people are finding out that instead of being an investment, their primary home has become a liability. They find out (as we did) that they are little more than renters with a very expensive mortgage and maintenance liabilities, as well. In our case, a home that we bought the traditional way (20% down, no funny stuff, a great fixed interest rate) has decreased in value nearly 50%-yes, half-since the height of our market in 2007, and 35% since we bought it 6 years ago. But our neighbors, who have been here for 10-20 years, all also have suffered the downturn and some of them are actually selling to get their equity.

Bottom line: BK is a very personal decision, but one you shouldn't make until you really know what your assets are.

Selling the house is out of the question. The school system where I live is one of the best in the state. My daughters education is very important to me. I paid more for the house because of it. I paid 489,000 for the house and it is probably worth about 575,000 to 600,000. At the peak houses similiar to mine where going for 700,000. If I didn't have the charge card bills I would have plenty of cash.

[rusty95]

I want to know how you are claiming all those dependents on your paychecks if in fact they do not exist. I do not know what your house value is at but at my 341 hearing the trustee told this other couple that they could certainly downsize the house. I reside in PA and this couple had a home valued at $400K and he didn't think it was going to fly to be able to keep it. They asked me about my home first and I don't have a lavish house but it is my home. We easily qualified for chapter 7 with my husband being a carpenter and having really lousy years of late and we still are over in assets by $9K and have to go to court next week to buy back my SUV which I have my title to. I know how it is to be making good money but have massive debt that it has to go to but when the credit card debt is gone and you are paying a more realistic mortgage, you will have a lot left over as long as you both have your jobs. Just be sure to research every avenue before taking action. I should have tweaked a few things before filing but hindsight is 20/20.

You can claim all you want as long as you claim the correct amount at the end of the year. Why give the government a interest free loan.

[Klesko]

My first mortgage is $4365 that includes the house insurance and real estate tax. I pay over 11,000 a year in taxes. I owe about 485,000 on the house. The second mortgage is 555 a month and I think I owe 46,000 on that. And I am taxed to death in the great state of New York.

Your house is the problem, the cards are only a small part. Before even considering BK you need to figure out the real value of your house. If you truly have 100k in equity then you will more then likely be pushed into a BK13. However even with your house payment you wont be able to afford a BK13 nor would I recommend it in your situation.

You need to sit down and realize that the house is your problem. Until then nothing will change.

[rusty95]

Lets see I sell my house for 575,000. I have 525000 in mortgages, after paying the real estate broker a 5% fee for selling it, thats 28,000 that would leave me with 22000 to pay off half of what I owe on my cards. Now I still have 23000 in charge card debts and no house. I also don't have 100,000 in equity because most companies won't finance 100% of the value.To rent a house in my area is about 3500 a month, that dosen't solve the problem.The house isn't the problem.

The problem is my real estate tax went up $5000 since I bought the house, the fuel oil has tripled and so has the electric bill. The charge card rates going up to 29% also didn't help.

[Klesko]

Option A

Mortgage--- $4365
Second mortgage - $555
Car Lease---$399
Electricity---$285
Oil--------$250
Cable---- $140
cell--- $100
Life insurance --- $208
Train---- $75
Misc----$150
All charge cards---- $1385

Total $7,912
Income $8,800
============
Left over $1,112

Option B

Rent--- $3500
Car Lease---$399
Electricity---$285
Oil--------$250
Cable---- $140
cell--- $100
Life insurance --- $208
Train---- $75
Misc----$150
All charge cards---- $650

Total $5,757
Income $8,800
============
Left over $3,043

Ya, do I even need to explain this?