New...questions..

[geye]

I've been reading for a couple of weeks now, but it seems like the more I read, the more info I have, which changes my understanding of what I read, which means I'm confused

We are in Michigan, and are looking to file in August. DH's OT from December and January will be off the lookback, and we'll be under the median.
We met with an attorney for a free consult, but haven't retained him yet, and won't until we're positive that DH's income will stay low enough for us to file. The attorney didn't seem to have issues with us being barely under, as long as we were under.

I keep hearing people say to buy the new car before you file, but this attorney said NO WAY as it could possibly be fraud. He said repair the one we have. On the flip side, he said to go ahead and refinance our other vehicle with a new bank so there's no cross-collateralization issues-that it would be the same as opening up a new bank account and moving the money. Does that sound reasonable? I assume the attorney is basing his knowledge on local procedures.

We have a timeshare. I'm having trouble with this one. Morally I think it's wrong to keep the timeshare if we're having trouble paying our bills. From what the attorney says, though, we should keep it, and the trustee will be happy that we do (it has about $2000 in equity, and is mortgaged). My concern, though, is this: If I fill out my schedule to show that we can afford the payments on the timeshare, can the trustee force us to NOT reaffirm the debt and then force us into a Chapter 13 using that money to fund the plan? Or would I have the opportunity to amend the schedule without the timeshare to show that we don't have the money to fund it?

We've been living bare-bones for so long that I'm not even sure how to live without squeaking, and I think that's part of the issue, too. I looked at the IRS guidelines for a family our size, and we spend WAY under those for food, clothing, etc. I bought paper cups for the kids' bathroom last night and felt like I was recklessly spending!!!!
I've been trying to up our outlay in those areas so our expenses will actually match the schedule which will match something like normalcy, but that means eventually I'll have to miss a credit card payment. Never done that in my life, and I'm not willing to until we know for sure that we'll be able to file. So at the moment I'm feeling a bit under the gun.

The attorney wants us to wait until at least August because DH bought a tv and stand for it on a credit card last month ($1100). That was kind of the straw on my back that made me look into bankruptcy. Most of our other cards haven't been charged on in a few years. He did say, though, that if we filed sooner we would have the option of agreeing to pay that amount in question, which is fine by me, because, really, we have a tv, don't we? On the flip side, he said with four kids the trustee wouldn't think twice about a television, especially since we don't have boats, trailers, ATV's, etc.. It's just the cc company that may have an issue.

And along that same vein, he told us to quit paying our credit cards as soon as we knew for sure we were filing. I know missing even one payment will start a spiral that I can't stop..
But reading here, I should continue paying since DH charged the tv, but if I'm paying one I have to pay all, right?

Input? Advice? A hug? Gosh, this is stressful. But it's also liberating to see that light down there was turned back in, even if it's blinking at the moment...

[Exployer1234]

If you plan on filing in August I would personally stop sinking money into the CC's. You could save that money to pay for BK. Also with the extra money you can get any items that are a neccessity, such as toliet paper, paper towels, garbage bags, and etc. If you plan on filing BK you are spinning your wheels by giving the CC's more money.

[geye]

Oh, and another question..I swear I read that in Michigan you were required to reaffirm your mortgages? Of course, I can't find that information now. We want to keep the house, but may (or may not) need to sell in about 4 years. We're underwater by about 9% at the moment.

[geye]

But we're not 100% sure at this point that we'll be filing.

[bobbyquefour]

But we're not 100% sure at this point that we'll be filing.

Well, only you can answer that question, then, and believe me, we have all been right where you are now. It is like alcoholism, though, most of us finally filed when we realized that we were just never, ever going to get out of our situations. I think that I have read that if you can reasonably expect to be able to dig yourself out of your situation in 5 years (or something like that) then maybe it is not the option for you. Looking back for me, though, personally, I was DOOMED to bankruptcy, in that I had (due to my own fault) set myself up to where BK was inevitable, just a matter of when I was going to be brave enough to do it.....I was discharged very recently, and I will be truthful with you: it was a very emotional and painful experience...a lot of soul reflection and deep, deep thought. But now I find this ENORMOUS sense of relief, and am blown away because I don't think I really thought I could ever be free........so, it is for you to decide......but if you decide to go forward, life can be good...you can have hope again. You should not have to feel guilty about buying paper cups for your kids. That is just crazy. None of us should have to feel desperate like that, and believe me, WE ALL have felt that desperate. You are among friends!
Bobby

[StartinOver]

Hi, I'm about where you are with respect to confusion and from the same cause - the more we find out the more we realize how much more we need to find out to feel comfortable with knowing.

And who ever thought we'd be knowing this arcane stuff?

I'll give you a hug - you expressed very well the state of confusion about how it is that you can find yourself feeling guilty for buying a package of paper cups on the one hand and then in the next breath be thinking about that TV purchase that your other half made on a credit card.

I found myself this afternoon waffling between purchasing no name brand body bars that are made of detergent, which makes hubs itch madly, vs trying some genuine glycerine soap for 3 times the price to see if it helps him. 15 minutes, I waffled over that. This is not how we are supposed to be living.

And we are both waffling about whether we need to file. Reading your story, it's obvious to me that you probably do. Like you, we're current on house payments and have only just started to fall behind on some of the credit cards and loans. And I keep trying to figure out how to keep my house, but I did the same thing you did with the budgeting and OMG, it became so obvious that its a non-starter for me. I think it's going to take another week or so to sink in all the way so I can start to let go.


Anyway, I've barely been here a week myself, but welcome, I hear some of what you're saying and it sounds familiar.

[freeatlast98]

Hi, I'm about where you are with respect to confusion and from the same cause - the more we find out the more we realize how much more we need to find out to feel comfortable with knowing.

And who ever thought we'd be knowing this arcane stuff?

I'll give you a hug - you expressed very well the state of confusion about how it is that you can find yourself feeling guilty for buying a package of paper cups on the one hand and then in the next breath be thinking about that TV purchase that your other half made on a credit card.

I found myself this afternoon waffling between purchasing no name brand body bars that are made of detergent, which makes hubs itch madly, vs trying some genuine glycerine soap for 3 times the price to see if it helps him. 15 minutes, I waffled over that. This is not how we are supposed to be living.

And we are both waffling about whether we need to file. Reading your story, it's obvious to me that you probably do. Like you, we're current on house payments and have only just started to fall behind on some of the credit cards and loans. And I keep trying to figure out how to keep my house, but I did the same thing you did with the budgeting and OMG, it became so obvious that its a non-starter for me. I think it's going to take another week or so to sink in all the way so I can start to let go.


Anyway, I've barely been here a week myself, but welcome, I hear some of what you're saying and it sounds familiar.

I loved your reply. It expresses exactly how I've been feeling knowing I'll have to file soon. I have pondered and pondered this for a few months now and realize if I want any real quality of life I have to do this. Still it's scary and I too want very much to keep my home. So far, I'm current and pray each month it will stay that way. It's such a bad economic time here in California as it is in other states. The cost of living here is extremely high. I'm on my own now that I have been divorced for 1 1/2 years. Not having someone to share this horrible time is very lonely so I'm glad I can share this with others and I can't tell you how much it helps.

[momofthree]

I'm a bit confused as to how the attorney can see a difference between taking out a loan to buy a new auto or taking out a new loan to refi your old auto....either way, you're taking out a new loan that you plan to pay back 100%. That's not fraudulent....many of us bought new cars right before filing and it was never questioned....If you know you're going to need a new car and that you can afford the payment once the credit cards are gone, then by all means, get it now while you can qualify for a decent interest rate...

[geye]

Well, thank you for nobody beating me up

I've got to wonder if the day-to-day wasn't so pared down, maybe the impulsive TV wouldn't have been bought. Like a blown diet as opposed to eating reasonably?

Anyway. As for the car, I'm not really sure on why the attorney feels there's a difference. It's likely a good thing for us, though. We could save up cash and be responsible about the purchase.

I know we can't dig out in 5 years. Or 6. Or 7. Say what you want about the credit card reform......those calculations on the bottom of the statement are an eye-opener.

[Ann]

geye, I'm in Michigan also. There is no law that says you must reaffirm your mortgage. In fact my lawyer is advising against it even though I know we are still going to live here. We will file in the next few days. Quit paying those cards NOW. You will only be wasting your money. It makes no sense to give money to the credit card companies when in a few months you are going to file anyway. I haven't paid on ANY card since last summer. You will be amazed at home much money you can free up for all the necessities including those paper cups!

[geye]

Ok so I could NOT reaffirm, but keep paying for now in order to stay. Then what? How does that affect my ability to get a loan for a new home in the future? What do I do with the one I have? How does the bank keep track of how much you owe them to release the lien if you don't owe them anything? Could I buy a new home before I stopped paying on this one since i don't actually owe anything on this one, and then just let this one go?
(see what I mean about the more I learn, the less I know?)

[newbie2]

Ok so I could NOT reaffirm, but keep paying for now in order to stay. Then what? How does that affect my ability to get a loan for a new home in the future? What do I do with the one I have? How does the bank keep track of how much you owe them to release the lien if you don't owe them anything? Could I buy a new home before I stopped paying on this one since i don't actually owe anything on this one, and then just let this one go?
(see what I mean about the more I learn, the less I know?)

You can keep paying and stay if that is your wish. Once you stop paying the lender will initiate foreclosure proceedings. Your bankruptcy discharge means you are not liable for the loan any longer, but the lien remains.

If you choose to leave after a bit then you can walk away. I do believe though that a foreclosure will hit your credit report also.

As to purchasing another home in the future, your credit report after discharge will show your current home loan "Included In Bankruptcy."
You will probably have to wait 3 years or so to qualify for another mortgage.