Very scared / 1st lawyer consult tomorrow

[andysmom]

Hi,
First I want to say how helpful & informative these boards are. I've been reading through the posts for the last few days when we've finally come to the realization that we can no longer do this on our own. We are drowning; I'm so scared & can't sleep, eat or anything. I don't even want to get up in the morning or get out of bed- the only reason I do is for my little boy.

A little background:
We're married, one child just turned 3. I'm a stay at home mom who was selling on ebay but after just fixing this years taxes, saw I lost money on it for the 2nd yr in a row so I have stopped / am in the process of closing it up. My husband has a good job for the last 16 yrs. I left my job when my son was born.

I had a missed miscarriage at about 11 wks pregnant, found out I was carrying a deceased baby for about 5 weeks & had to have an operation to have the baby removed. 2 weeks later I was pregnant with my now beautiful little boy.

I went through terrible depression & am still treated for panic disorder- which I've had for many many years but for the last few years has to be controlled by medication.

We own our home, but have a $107,000 mortgage. Equity is about $30,000- which from I read is below the federal exemptions. (we're in PA). We owe about $100,000 in unsecured debt- all credit cards; which have everything on them and unfortuantely we have resorted to using to keep ourselves afloat for what seems like quite awhile/ along with my father's funeral & expenses (died very early&unexpected with no ins.), dental work, medical, & the unfortuante overspending.

We have 2 old vehicles. KBB value at $2300 for 1 and $2500 for the other.

We do not have much of anything in real value in our home.

We definately want/need to keep our home. We have done everything we think we could to avoid this but we see NO other way out.
we refinanced our home iin dec/jan from 15 yrs to 30yrs (no cash out- couldn't cash out- HARP loan) to lower payments. Took a loan against 401k plan. Went to all cash spending last month. House is current/ never missed a payment or been late.

The credit cards have almost all raised interest to near 30% and minnimum payments- after negociating w/a few for hardship pymt plans, are now at nearly $2600 a month. Needless to say there is no way we can afford this.
Pymts have been current, but won't be as of this month. There's no possible way.

I don't know if we would qualify for a chapter 7 or 13 and what happens next?

What can I expect at the lawyers tomorrow? Then what would be the next step?

Since the cards were used at Christmas and we don't have our taxes done yet, is it wise to tough out a few months before filing? I read on here about lookback periods and such.

I don't know what to do or what to expect. I can't stop crying or getting sick. I can't even catch my breath. I'm typing this through alot of tears now. I never thought this would be the end; but we feel it's our only way out.

If there's anyone out there reading this, please post any info / guidance/tips/sugesstions. It would be greatly appreciated; I have no one at all that I can even talk to this about.

Thank you all for the info & tips that's on this great site.

[lulabelle]

First, just try to breathe - I know it's hard, but believe me, we've all been where you're at right now. It doesn't seem like it now, but things are going to be o.k.

Your income will help determine whether you qualify for a 7 or 13. I don't know what state you live in, but if you go here: http://www.justice.gov/ust/eo/bapcpa...anstesting.htm and click on "Median Family Income Based on State", you should be able to find out whether you are over or under the median. There's a lot more to it than that, but that will give you a starting point.

Stop paying on your cards - your minimum payments are outrageous and it would take you 30 years or more to pay off that kind of debt on minimum payments. The look back period is generally 90 days - mostly they are looking for cash advances or "luxury" purchases. By the time you are ready to file, you should have a cushion of time in there.

Plan to meet with at least 3 attorneys - believe me, it makes a difference. They will be able to give you an idea of what chapter you qualify for and how to proceed from here.

It does get easier. I remember all too well how I felt when we first realized we could no longer keep up. It was horrible and I was physically ill for several weeks, too. Now I'm calmer than I've been in a very long time. I finally woke up to the fact that worrying about how to pay those credit card bills and going backwards every month while they continued to stick it to me with lower credit, higher minimums and higher interest rates was taking its toll on me. I always made sure that I paid them on time and none of it mattered and I was sacrificing my marriage and my family to do it.

You'll get through this! Continue to read the boards and ask questions. Interview your attorneys, plan to handle calls from your creditors and just take it one day at a time.

[Mi Bankruptcy]

Your not alone. Your about to make a business decision to legally remove yourself out of debt. DEFINITELY interview 3 attorneys as stated above. Start getting together tax returns for 2 years. Pull your credit report to make sure there is nothing that you may have forgotten about.

You are in the best position to file because you are not late. Therefore, after you meet with 3 attorneys and you pay the retainer you will be able to provide your creditors with your attorneys information so they can deal with the creditors. Don't ignore their calls or they will start calling other people to get in touch with you. Keep reading this forum and asking questions. If you have definitely made up your mind to file stop paying on your credit cards. However, if you want to keep a house or car continue to pay them. You're on the road to freedom

[Mi Bankruptcy]

If creditors start harassing after you have retained your attorney just tell them one sentence

"my attorney can answer that question" Best of luck!

[andysmom]

Thank you so much for your kind reply. I can't live like this anymore. We're in PA and between what my husband makes and what i did / didn't make in the last 6 months we're right on the boderline for being under the median.

I have the w-2 from 2009,i don't know what box you use to figure gross income. box 1 is $58541.36, box 5 (medicare wages & tps): 61,832.90. Then on the explanation part of the w2 earnings summary it says gross pay: $67,768.70 less 401k less "cafe" (i think our insurance) $58541.36 reported wages.

if we wait a few weeks, which I'm sure we'll have to, to get the money to pay the lawyer at least, I'm sure we can come in right under the median, I don't know how far under you have to be?
Right now it's just week to week depending on what overtime my husband works- but if we stop paying all the credit cards he can ease up on the overtime- it's not all mandatory.
Also, about income tax refund, if we get it back before we file, can we use it to pay the lawyer? We were planning on catching up on overdue utilities, getting needed roof work done and paying part of my son's preschool for next year- 1st pymt is due in May.

What's considered a luxury item for the lookback period?

After getting through / dealing with the emotional part (which i don't think i'll ever get past), how difficult was the actual mechanics of it, weather it needs up being a 7 or 13.

I have another lawyer consult on March 18th, he wants us to bring waaaay more paperwork than the one tomorrow and by what he asked over the phone he seems to think it'll be a chapter 7 but won't be sure til the meeting.

Lulabelle: if you don't mind.... did you file a 7 or 13 and how did it work out for you? do you regret it? I tried following Dave Ramsey's total money makeover, but the money just isn't there.

I also contacted CCCS but they wanted nearly the same $2500/mo minimum payments- without the house payment or 401k loan- which i know there's nooooooooooooo way we could ever do. I know we have no other options but I'm petrified!

I'm so scared & can not get control of myself. I guess the only "good part" is that I lost about 10 lbs in the last week realizing how far deep we were in and what the outcome is.

[andysmom]

Thanks Mi Bankruptcy. What do I do about credit cards tha are on auto deduct from my checking account / payment plans? Just call & tell them to stop the payments?
Should I wait to stop paying all of them until I retain the lawyer? I don't have the money to pay all this month, should I pay some- especially if I need to wait a month or 2 to file?

After you file bankruptcy, will they close my checking account? I have never bounced a check in my life. I don't care about credit/ if these bills or most of them are gone, I can survive on our income.

Thank you all so much.

[Mi Bankruptcy]

Can you go online and stop the auto payments? Also, if you are filing on any card that is associated with your checking account go open a new checking account first. Then close the old one. The credit card company could do cross col-lateralization and take money out of your account because of terms in the agreement you probably signed with them.

Also.. how much did you take out for your 401K, when did you take it out and how much was it for. It's good the attorney wants a bunch of paperwork. If you are a chapter 7 the attorney can exempt what ever receive back from your refund. I would ask about this too. If you get it back before you file make sure you keep detailed records of what you spent it on. Fix your car, home, buy groceries etc. Several people also buy a new car before they file you want to think about this and talk to the attorney.

[andysmom]

Thanks Mi.
My husband borrowed just under $20,000 about 6 or 7 months ago. Chase raised the minimums of all of our cards and there was no way to keep up so - the one cards minimum went to almost $700- so we sent close to $10,000 to them to get the balanace down. The rest of the money paid off a few small cards, payments on other cards, backed up bills and some living expenses. Nothing fun.
I know it was really stupid & we should have seen this coming a long time ago - we just tried everything we could to avoid this - I wish I found this forum a long time ago.

my checking account is with a bank I have credit cards with, so I guess I should go open a new checking account ASAP- my husband's check is direct deposit. Do you think a bank (that you don't have a credit card with) will close your checking account if you have a bankruptcy?

Thanks again.

[Mi Bankruptcy]

Don't beat yourself up about the past. What's done is done. You and your husband are about to build a better future. Don't worry about the new checking account. It will be OK. Especially since your doing it before you file. Pat yourself on the back for filing before everything is late. Heres the hardest part.

Finding the right attorney & gathering all the paperwork. So.. you are on your way. Keep coming to the board and asking questions. My BK was a basic chapter 7 and I kept my house and two cars. More people will be along on this board that can answer your questions better than I can.

Thanks Mi.
My husband borrowed just under $20,000 about 6 or 7 months ago. Chase raised the minimums of all of our cards and there was no way to keep up so - the one cards minimum went to almost $700- so we sent close to $10,000 to them to get the balanace down. The rest of the money paid off a few small cards, payments on other cards, backed up bills and some living expenses. Nothing fun.
I know it was really stupid & we should have seen this coming a long time ago - we just tried everything we could to avoid this - I wish I found this forum a long time ago.

my checking account is with a bank I have credit cards with, so I guess I should go open a new checking account ASAP- my husband's check is direct deposit. Do you think a bank (that you don't have a credit card with) will close your checking account if you have a bankruptcy?

Thanks again.

[andysmom]

Hi,
How hard was it to keep your house? That's the only thing I'm really worried about.
Our cars are old and we don't owe anything on them.
I really hope you qualify for a 7 after reading alot of the stories on the Chapter 13 threads.
Thanks for all of your advice so far.
I do have most of my paperwork already put together that the 2nd lawyer wants. Appt is 3/18 with him. The one tomorrow only asked for a few things.

[Mi Bankruptcy]

If you don't have allot of equity in the home it should be easy to keep. However, if you have more than you can exempt that is where problems start. talk to your attorney about the cars. Again, you may want to get a new car before you file. We didn't but some people do. You will have to check your budget. When you find the attorney make sure you take your pre bankruptcy class, then after you file take your post bankruptcy class before your 341 hearing. The CH13 scared me too.

Hi,
How hard was it to keep your house? That's the only thing I'm really worried about.
Our cars are old and we don't owe anything on them.
I really hope you qualify for a 7 after reading alot of the stories on the Chapter 13 threads.
Thanks for all of your advice so far.
I do have most of my paperwork already put together that the 2nd lawyer wants. Appt is 3/18 with him. The one tomorrow only asked for a few things.

[LittleB72]

I was a nervous wreck for my first appointment...all for nothing! He just asked me basic questions (why I was considering filing and he took down some preliminary income and debt information and personal information).

Why are you worried about your house? Are you behind/close to foreclosure or something? If your equity is exempt AND you can keep making the payments, you should have no problem keeping it w/a CH. 7.

It all boils down to your monthly take home income less monthly expenses (mortgage, utilities, etc.)to figure out how much disposable income you have. That resulting figure is key!

Good Luck! HANG IN THERE!

[LittleB72]

House is current/ never missed a payment or been late

Sorry..I missed this. Don't worry about your house...just talk to your lawyer to make sure the exemptions cover it

[andysmom]

Littleb72,
Thanks for your reply.
According to the nolo online our equity is exempted but I'm a constant woorier and have been diagnosed with 7 intreatment for panic disorder- so I guess it's unfortunately in my nature- at least til I find out & it's done & over with.
No, I'm not behind on my house at all. Never been late/missed pymt on house. Before reading these boards I just had it in my head that you lose everything - including your house- that's why I tried everything to hang on as long as we could.
I'm just really really nervous & i know it won't be pleasant but I just wish it was all over with.
I want to make sure I do it all right & am completely prepared for what's to come.
Thank you some much & anything you have to offer is certainly tremendously apprecaited! Like i said earlier, we have no one at all to talk to about this- I don't know what I'm going to do when my husband's family finds out (i don't have much family left 0 unfortunately most passed on or don't live in area).

[andysmom]

If we're close/ boderline to the median income, is it best to wait a a month or 2 to get under it and that would also allow us to get our income tax back to pay for roofing work, car repairs that re needed, past due utilites & extra food- as other's say is acceptable? Also to help pay for atty?