Having trouble keeping our heads above water.

[Flamingo]

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.

This is why I state in my posting to you above that you are not yet out of denial (see my red highight above). You are living beyond your means because you could not afford what you wanted and purchased it on credit and now you have come to rely on that and have run up bills you just not now can afford to pay but state you can pay all your other bills. So you are living beyond your means. It's embarrassing to you and you are trying to be defensive about it and cover it in other ways. What you need to do is free up some cash if you want to avoid BK and that is by reducing your savings at the moment to pay off debt, or take on another job to make more cash to pay the debt. The debt is not going to go away unless you supply extra cash to pay the debt, sell assets to pay off the debt or file bankruptcy if you are actually eligible to file. You first need to figure out you do have a cash flow/living beyond your means problem and when you realize that, either see a financial counselor to help you get back on track or visit a few BK attorneys who will tell you like it is if you don't want to hear it from others who have been in your position and found it out. You will eventually see what I mean/am taking about. If you take some of the advice on here and open up your eyes as to what is being said to you, you can start taking the proper steps to get yourself back on track. First you need to cut up those cards which is a horrifying thought to you, I know...

[rusty95]

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.

Thank you for telling me of your experience. It was a big help.
Unlike the others that gave great advice and opened my eyes you weren't dead set on me selling my house.

[JackBondLove]

I think I understand what the OP is saying w/r/t the dependents. He has used a high number for the purposes of the W-4, which only affects the amount of tax deducted from his pay. It is really an irrelevant number so long as he has enough tax deducted for his total tax liability. The important number of dependents is what is on the 1040 form. This is what the bankruptcy court uses.

[JackBondLove]

Maybe it's time for a little education. I live in Suffolk county. Now I don't care what the IRS says but you can not live out here or any where else on the Island or the city area for 1650 a month. Not going to happen. Now you can look up houses all you want but you won't find anything under 400,000, unless you want to live in a crappy area where you are not safe. So if you look find out the good areas.

As I understand it, there are folks that live in Pike County, PA and commute into Manhattan. Evidently it is very inexpensive to live there. You could get a car like a Smart ForTwo for only $12K that gets 41 mpg.

[LSUTiger32]

Thank you for telling me of your experience. It was a big help.
Unlike the others that gave great advice and opened my eyes you weren't dead set on me selling my house.

Dude, do you read well or not? I have said three different times that if you wanted to keep your house that I understood. I could not afford my house when I decided to file but guess what......I build the house from the ground up with my own hands after Katrina tried to take it from me forever. I understand wanting to keep a house more than anyone, I promise you that. I knew though that I had to make changes in order to keep it. That said, I was never over 60% of my net income but I was just below 50%. I think you can do this and keep the house but as I said several times already you will make serious SACRIFICES in order to keep it.

I give up.....again.

[rusty95]

As I understand it, there are folks that live in Pike County, PA and commute into Manhattan. Evidently it is very inexpensive to live there. You could get a car like a Smart ForTwo for only $12K that gets 41 mpg.

One would need money for a down payment on a house and the 12K for the car. Other wise it has been thought about. I actually have a friend at work that commutes from the Poconos.

[Backlyn]

I reside in PA and know several surrounding areas that have bus service to NYC daily so people can commute. The Pocono area in particular used to be this lazy country area with skiing and resorts and now its become ghetto land in some areas. Makes for quite a culture shock for the people who have lived there their whole lives. The schools have had big problems as well. You have a mix of backward poor farm kids with street smart city kids and the drug situation is out of control. This is all irrelevant to this topic but someone mentioned commuting. You can get a banging house here though compared to what you will pay in NY/NYC. It personally would drive me nuts having to ride a bus 3-4 hours every day. That isn't a life in my opinion but its not a choice for many.

[rusty95]

I think I understand what the OP is saying w/r/t the dependents. He has used a high number for the purposes of the W-4, which only affects the amount of tax deducted from his pay. It is really an irrelevant number so long as he has enough tax deducted for his total tax liability. The important number of dependents is what is on the 1040 form. This is what the bankruptcy court uses.

Bingo. And that is where my problem will lie. This year I owed fed tax. So I am going to lower the weekly dependants which will take away from my take home pay. Plus if they don't do something with the AMT tax I will owe a ton next year and that will be a big problem.

[rusty95]

I reside in PA and know several surrounding areas that have bus service to NYC daily so people can commute. The Pocono area in particular used to be this lazy country area with skiing and resorts and now its become ghetto land in some areas. Makes for quite a culture shock for the people who have lived there their whole lives. The schools have had big problems as well. You have a mix of backward poor farm kids with street smart city kids and the drug situation is out of control. This is all irrelevant to this topic but someone mentioned commuting. You can get a banging house here though compared to what you will pay in NY/NYC. It personally would drive me nuts having to ride a bus 3-4 hours every day. That isn't a life in my opinion but its not a choice for many.

Yes it has become increasing bad in some areas. And the commute is a killer.
Plus I work around the clock 12 hour shifts, so the train wouldn't work for me.

[bigsapper]

... 87 posts ...

Do I know you from another board?

[backtoschool]

I think I understand what the OP is saying w/r/t the dependents. He has used a high number for the purposes of the W-4, which only affects the amount of tax deducted from his pay. It is really an irrelevant number so long as he has enough tax deducted for his total tax liability. The important number of dependents is what is on the 1040 form. This is what the bankruptcy court uses.

Yes I agree JackBondLove. But I wasn't sure how many of those he was claiming on his 1040 and wanted the OP to be aware that the 1040 dependents are what the bankruptcy court uses.

Even with the lowered take home pay after he adds the dependents back in, the OP makes too much money and has too much disposable income (by bankruptcy schedule standards) to be a viable candidate for a chapter 7 in my opinion.

[flyinbroke]

He said it himself: without the unsecured debts, he has plenty of money left over. This right there puts him out of CH7 territory. If you have money left after base expenses, you are most likely going 13, like it or not.

[rusty95]

Do I know you from another board?

What board would that be?

[LSUTiger32]

He said it himself: without the unsecured debts, he has plenty of money left over. This right there puts him out of CH7 territory. If you have money left after base expenses, you are most likely going 13, like it or not.

Can't be possible, he doesn't want to hear that so it can't be true.

[OhioFiler]

What board would that be?

I'm guessing the Magic Wand Makes All Problems Go Away board!