Having trouble keeping our heads above water.

[rusty95]

I originally came here to get some advice, not to have my lifestyle ridiculed.
Not to have every penny I spend analyzed. I am going to give this problem to the end of the summer, if it is not going in a positive direction I am going to see a lawyer to see how this can be worked out.

[newbie2]

Rusty, since you want to keep your home, and a Chapter 7 to discharge the credit card don't probably wouldn't be possible, perhaps try to workout a settlement with those credit card companies. Sometimes a "look, I'm having trouble and trying to avoid bankruptcy.." will be the magic words to get the CC companies involved in reduction of the interest rates to something more manageable for you and your family.

After all, they know if you do file bankruptcy they will receive pennies on the dollar (normally) if nothing at all.

Give it a shot, and good luck to you.

[OhioFiler]

Ya thats the thing I want to do, leave great jobs and a great area and move to a state I don't have a job in or family or friends. That would really solve the problem.

No insult meant and if you took it that way I apologize.


I am happy for you that you have provided you and your children a great place to live.

Maybe you should take a vacation. It's nice to get away from the day to day problems.

I never encouraged you to relocate. I simply wanted you to realize that those of us who live in the third world aren't all that bad off and there really is life outside your tri-state bubble.

We do vacation. Thank you very much for your suggestion!

[OhioFiler]

I originally came here to get some advice, not to have my lifestyle ridiculed.
Not to have every penny I spend analyzed. I am going to give this problem to the end of the summer, if it is not going in a positive direction I am going to see a lawyer to see how this can be worked out.

You've been offered exceptional advice from others who know your plight. No one intended to ridicule your lifestyle though many wanted to analyze how you spend every penny...as a way of helping you.

Look us up again in August. Best of luck to you.

[backtoschool]

I honestly don't know where the IRS gets those numbers from but there is no way anyone out here with a mortgage can live at that level. Maybe a third world country but not in the tri state area. My electric bill alone is 285. And that is running around shutting things off.
I have proof for every expense that I have. NY has the highest rates in the country.It is all legitimate.

Rusty95,

I was in a similar situation to yours when I lived in nyc. (the only difference is that I lived in the city, so my allowable expenses by irs standards were a bit higher)

I made around 180-250k a year depending on my bonus, but had large student loan bills and large credit card bills and a very large rent payment and couldn't make ends meet. When I went to an attorney for a consultation on filing chapter 7 she laughed at me. She said that the nyc area (including Suffolk county) US Trustee's office takes a very hard stand on high income filers. You would have to have huge, provable medical bills, or some other "special circumstance" to even get a lawyer to take your case as a chapter 7 case, and then you would most likely go before the bankruptcy judge and would be guaranteed to go before the US Trustee. Do a search on this board for high income filers in the new york city area and you will see how things go.

I ended up moving and going back to school and only then was I able to file chapter 7.

[LSUTiger32]

Maybe next vacation you take the family for a raft ride down Da' Nile.

LOL! It ain't just a river in Egypt!!!!

[Dannmcg357]

I hate to tell you this but before I got into this mess with charge cards we had no financial problems we had more than enough money to live and save. So if you take out the equation of the cards it will be back to normal.

Remember that women that is blind folded wearing a robe, holding a scale? That scale must balance. The courts aren't going to just eliminate the cc debt and ignore your income and assets. I believe that is what everyone wants to convey to you. That and the fact that you have the means to make that happen with out BK from what you have posted.

[Flamingo]

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?

Just briefly going through this thread and seeing some excellent advice given to you, the problem is, and reality bites hard unless you are able to totally get out of denial, that you are just living beyond your means and now it is catching up with you. We too had high income, my hubby traveled the world with his job and we went crazy with the extra money, extra credit that came with the extra money and just did not save enough. With a merger came the layoff of his entire department and we were not able to recover after a 70% loss of our income, big bills to pay and unable to recover for a period of one year. We then had to bite the bullet, were up against the wall and borrowing from Peter to pay Paul witih the banks eventually catching on and upping interest rates to sky high rates. However, you still have the income and not the job loss but have now put yourself in a place from which you cannot recover unless you have some relief and you can betcha it will be a Chapter 13 if you want to keep your house.

In order to avoid bankruptcy, you would probably have to sell your house and alot of your assets to pay your debts and you would have to move to a lower rent district/relocate because this is not going to go away easy for you. You are facing it straight on and unless you hit the lottery, have a rich relative die leaving you a lot of money or someone knocks on your front door with a check for several thousand dollars, you've got a mess and you know it.

Speak witih several BK attornies and realize you have faced reality. However, I donnot yet think you are out of denial but it will come. Best of luck to you...

[BobMango]

rusty,

I understand where you are coming from and admire your desire to keep things as they are for your daughter. Most of the folks on these boards are very helpful and some have a bit of smart aleck in them, but this is one of the few places on the web where you'll get great advice with little judgment.

As to the debate about whether your house is the problem or not, it's really a question of perspective. You say it's not a problem because you were fine before you ran up the credit cards. This begs the question of why you ran up the credit cards. I find it a little hard to believe that if your credit card debt were wiped out you would really be fine. Devoting so much of your income to your house makes it difficult to take care of the other things.

You seem unwilling to consider some of the advice given to you and just want bankruptcy to wipe out your credit card debt and leave everything else untouched. Sorry, but that is not possible. Additionally, you indicate paying about $800 a month toward retirement accounts, and getting killed by $1,300 in credit card payments. If you stop paying the $800 and apply that toward your credit cards you might be able to make some progress getting those paid off. Scraping up another $500 a month at your income level should not be that difficult. When I made $150k a year, I had lots of "necessities" that I no longer seem to need. Get rid of your car payment and buy a reliable $1500 car. Your friends may not be impressed but so what?

So what happens if you don't file? You can try to negotiate with your creditors. Some will be willing to work with you, some may not. Those that won't work with you will look to garnish your wages or seize accounts or other assets. You will have a tough time preventing these actions without the protection of bankruptcy. Once this cycle starts you will then have a tough time making the mortgage payments, and eventually face foreclosure or a short sale or selling at break even. This approach will take years and you'll be under extreme stress for the duration.

Good luck to you in whatever path you choose. Be sure to keep us updated. I would love to hear from you in a year or two indicating that you were able to keep it together without filing bankruptcy.

Last piece of advice is one I gave you in post #2 or 3, go see an attorney or three. Then you can come back here and tell us all either that we're full of it, or that maybe the experience and advice you got here was actually on the right track.

[LSUTiger32]

#1- Taxes, 401k, 401k loans, medical ins, life ins, plus all the other misc deductions. I average 800 to 1000 a week in deductions. My wife fills in the rest.

I understand that, but those deductions should be looked at. They are incredibly high considering you already said your exemptions are crazy high so your taxes shouldn't be. Supsend new 401K contributions (just temporarily) while you repay the loan. You need CASH. You also said you are spending $208 a month on life insurance. So why are you buying it from work and from elsewhere?

#2 The house stays, The house stays the mortgage no matter what you think is not the problem, The cards are. If you have lung cancer are you going to cut your leg off.

Great analogy. Funny how you only seem to want the advice that you want to hear.

#3 Vacations..yes. We scrounge the money up for them. Like I said before, you ask a question and I will answer it to the best I can. You may not like the answer.

I don't really care what you do, once again though don't come here telling people how you can't get above water and then tell us about your yearly vacations. Are people supposed to feel sorry for you and your yearly trips?

#4 I don't think it is insane, we had plenty of cash before we got into trouble with the cards.

Think what you want. It's actually beyond insane, I just couldn't think of a better word.

#5 Yes 208 for insurance. Term insurance. 500,000 each. i got it when I was 45, thats why it is more. 500,000 to cover the mortgage. We don't want the other to be homeless if one dies. One less worry.

Finally, one thing we won't disagree on. You should have term life. Unless you are a vegetable though, even at 45 you are getting ripped a new one. I am not allowed to give the web site because of advertising rules but the company I used I plugged in 45 yo in good health, non-smoker in NY and got $48 a month for half a mil. Your wife would be even cheaper.

How can I lose my house. I pay the mortgage before everything else.

Cause #2 happens. Keep the house, I am cool with that. The rest of your life will be miserable because you WILL be house poor and unless you cut out cable, cell, car payments, etc. you will barely make it. If that is a sacrifice you are willing to make I totally understand. You already proved that you cannot make the house payment AND survive without racking up huge debt. Remember once you file (and they will likely send you into a 13) you can't file again for a LONG time. You better have it figured out because if you don't you will get that leg cut off. I have personally just been down this road you are on and you WILL have to make changes or else. Life sucks, get a helmet.

Again though, if you only want to hear what you want to hear then you came to the wrong place.

[rusty95]

I don't understand why people are saying I am living beyond my means. That would mean I am not paying my bills. I am paying all my bills on time. And I have money left over to get the things I need. I am saving with my 401k's. If there is an emergency there are avenues for me that I can get the cash needed. If you read my original post before the other 87 posts made me out to not paying my bill and having to sell my house because all of a sudden thats the problem, even though before I ran up the cards it was fine. I stated I was getting to the point where I would be having trouble.

Thanks to our fine president (hope and change)he changed the credit card laws and they are going into affect soon. So all my cards went up to 29% interest which added a bunch to my monthly payments. Also he is looking to raise taxes which would probably affect me. Also if he lets the "fix" that was put into place for the AMT tax run out I am sunk. My accountant informed me that I would probably have to pay an estimated 6 to 7000 more in taxes because some of my deductions would not be allowed. That is what is worrying me.

[rusty95]

I understand that, but those deductions should be looked at. They are incredibly high considering you already said your exemptions are crazy high so your taxes shouldn't be. Supsend new 401K contributions (just temporarily) while you repay the loan. You need CASH. You also said you are spending $208 a month on life insurance. So why are you buying it from work and from elsewhere?



Great analogy. Funny how you only seem to want the advice that you want to hear.



I don't really care what you do, once again though don't come here telling people how you can't get above water and then tell us about your yearly vacations. Are people supposed to feel sorry for you and your yearly trips?



Think what you want. It's actually beyond insane, I just couldn't think of a better word.



Finally, one thing we won't disagree on. You should have term life. Unless you are a vegetable though, even at 45 you are getting ripped a new one. I am not allowed to give the web site because of advertising rules but the company I used I plugged in 45 yo in good health, non-smoker in NY and got $48 a month for half a mil. Your wife would be even cheaper.



Cause #2 happens. Regardless, you only read what you want. Keep the house, I am cool with that. The rest of your life will be miserable because you WILL be house poor and unless you cut out cable, cell, car payments, etc. you will barely make it. If that is a sacrifice you are willing to make I totally understand. You already proved that you cannot make the house payment AND survive without racking up huge debt. Remember once you file (and they will likely send you into a 13) you can't file again for a LONG time. You better have it figured out because if you don't you will get that leg cut off. I have personally just been down this road you are on and you WILL have to make changes or else. Life sucks, get a helmet.

Again though, if you only want to hear what you want to hear then you came to the wrong place.

The term insurance is 20 year, I don't know how many years you put in for. I am 51 now so a change is out of the question.

[LSUTiger32]

I don't understand why people are saying I am living beyond my means. That would mean I am not paying my bills. I am paying all my bills on time. And I have money left over to get the things I need. I am saving with my 401k's. If there is an emergency there are avenues for me that I can get the cash needed. If you read my original post before the other 87 posts made me out to not paying my bill and having to sell my house because all of a sudden thats the problem, even though before I ran up the cards it was fine. I stated I was getting to the point where I would be having trouble.

Thanks to our fine president (hope and change)he changed the credit card laws and they are going into affect soon. So all my cards went up to 29% interest which added a bunch to my monthly payments. Also he is looking to raise taxes which would probably affect me. Also if he lets the "fix" that was put into place for the AMT tax run out I am sunk. My accountant informed me that I would probably have to pay an estimated 6 to 7000 more in taxes because some of my deductions would not be allowed. That is what is worrying me.

So why are you here? You have it all under control. Sorry about the 29% interest, that's the risk you take when you play with credit cards we all experienced that. While I am no fan of our president, it's been going on long before he became president. Almost everyone on this board was rate jacked and limit crushed at some point.

I am not sure what you want us to say? If you want to file BK to dump your credit cards, go ahead. No one said you WERE NOT paying your bills, you need to read again because I didn't see that said by anyone.

I am worn out, no idea what else to say. Good luck to you, I sincerely hope you get it figured out. In case you didn't notice those 87 posts were TRYING TO HELP. People are wasting their valuable time to try to HELP you. Try not to lose sight of that. No one here is hoping for your demise.

[lulabelle]

I really, really highly recommend that you get Dave Ramsey's "Total Money Makeover" book. I really think that his plan would work for your situation. If you suspended your 401K contributions, just for a short time, you could easily debt snowball and be debt free sooner than you may think. Also, if you have always paid your cards on time, give them a call - either tell them flat out you want your rate reduced (there is NO reason that someone with your income/debt/on-time payments should be paying 29% interest), or tell them you are having difficulty making the payments and some will be willing to set you up on a plan. Chase did that for me - they closed the account and reduced my rate to 2% without any negative impact on my credit score. I'm guessing they would be especially eager to work with you if you mention that you are trying to avoid bankruptcy. You really can make this work with a little bit of sacrifice!

Unfortunately, you did get taken on your life insurance policies. My husband is in his 40's and for a $750,000, 20 year term plan he was quoted $54/month by a company it sounds like I can't name on here.

I'm sorry that you've felt picked on here. It's just apparent that you haven't hit rock bottom yet. Once you do, you will be willing to take the hard look at things. Denial is a fabulous thing - I've lived it for many years myself.

So, cut up your cards - you have to stop using them completely. Pick up Dave's book. Sit down and make a really good budget. Work on your debt snowball. You can get out of debt!

[Backlyn]

In reading through all that has transpired from the initial posting. I am wondering why you are even going to file on a piddly $45K amount, if you have everything else covered and have avenues to get more cash. Cut up all cards after you attempt to get the rates reduced (good luck on that) and use whatever extra amount of cash you can come up with to make those CC payments.

I stopped paying my credit cards in August 2008 when I retained my lawyer. We were current on everything, just stupidly used up all savings and already used up all equity in the home trying to solve the CC situation in the first place. We just formally filed in October 2009. We were deemed a CH7 asset case because I used part of home equity loan to get the title to my SUV, another dumb move. What happened after I stopped paying the cards? Well for one we had actual money in our pockets for the first time in a while but unfortunately our income was affected with the economy. What transpired after that was the calls started. I told them we were pursuing ch7 and gave them my lawyers name and number. The calls kept up for well over a year, however, the notices then came with "Your balance is $20K but if you pay us $3K we'll call it even". The only problem with this is if you take the cash you are saving by not paying the cards and wait for the "deals" to roll in, they can slap you with a 1099. Because when they reduce what you owe them, they pass it off to you as income. We had the mentality that we would implode or something if we stopped paying our cards. I was actually shocked by the process that some places would be like "give us a call after you file and we can set you up with a new card"!!!!!

As you stated with the house you feel stuck there, have your jobs and family close. It may not be possible to move. I also understand about never owning a home again after you finally realize the American dream and are able to buy one. I have a $1100 mortgage, $555 a month is our primary with everything included taxes, insurances etc. I wish we never touched our home equity to pay down the cards. It just made the house payment higher and the need to use the cards greater.

If the terms of our cards didn't change with interest and limits, we would probably have kept on the same rat race trying to keep up with them. We should have filed back in 2005 but my husband refused. Eventually it becomes impossible to keep up with them and by giving your situation to the end of the summer to turn around, I just see the interest accumulating even more. I would probably try a debt counseling service or something. I don't see bankruptcy helping you out much. If you stop paying the cards, you will go to collections and that is where the deals are able to be made if they won't budge from the get go. Just be prepared when you start making those calls to have all of your cards closed. It has a domino effect.

Good luck wth things.