When should we file? Opinions or experience please.

[BananaCabana]

We stopped paying on CC's and mortgage a year ago. Somehow we have avoided most collection calls due to not having a home phone any longer and having changed cell phone providers at least twice since we originally filled out the cc apps 5+ years ago so they did not have current contact information on hand (phone-wise). So we haven't rushed to file due to not being able to take the calls anymore.

We will file because we lost income due to job loss and then from under-employment. Now we are way too behind to ever catch-up on the mortgage or CC's. Yet the lawyers we have consulted with have all said wait to file until you get sued.

Now here is our delima. Reasons we want to go ahead and file soon:
1. We would like to get this behind us more quickly so we can stop worrying about having too much cash on hand and can start seriously saving again with out being afraid that when we file a trustee will take anything over our exemptions.
2. We qualify for a chap. 7 now but who is to say that possible raises may occur in the future that could put us into 13? That is also a concern and makes us want to file earlier. And we have one "dependent" who is leaving for college this summer which could reduce our family size and affect our means test.
3. I am tired of needing things like new appliances or a mattress and being afraid of getting anything that may cost more than $600 and have it questioned by a trustee. I need a mattress and I want to buy one without having someone judge my purchase and whether or not I really needed to do so.
4. I want to be able to save for fun things again without being questioned about why we choose to go to the themepark when I need to file for BK.
5. I want to avoid any additional changes in legislature that may adversly affect the BK as things seem to change with every new case. Usually for the worse, putting more restrictions on what you can and can't do, etc.

Those are some of our reasons for wanting to file earlier.
Reasons for delaying are as follows:
1. We have five children, two dogs and five cats in our home. This has not been a problem as we own it. But when we file we will surrender the home as we are $20,000 in arrears and finding a home to rent with five children is a problem. Throw in the cats/dogs and the difficulty of finding something in our school district & budget will be really hard.
2. The sooner we file the sooner I have to give up my timeshare property which is not covered by exemptions and is the only thing we really want to keep as it is the only real "toy" we have.
3. We haven't been sued yet so we can continue to buy decent groceries, clothing that is needed for the kids, etc. Of course, I am so concerned about someone scrutinizing our spending that it has been hard to buy anything that isn't absolutely necessary. I still feel guilty about buying a floor lamp for our bedroom when the lighting we had in there was not enough to fire up my solar caluculator. Yet did we really need it? No, but it sure makes life easier with the additional light. And with five kids, deciding to buy them all new shoes for the next year will be an expensive thing no matter how you look at it. Will a trustee really look at "oh, she has five kids so clothing will be a lot more expensive than for someone with two kids" or will it just look like an extrevagant purchase? So the longer we wait, the more money we do have to purchase things I am really tight on normally.
We really need some things but I still can't get past the "it will cost HOW much?" part.
4. Once we do file and have to pay for rent again our budget will be so tight that there will not be any savings until the income does go up. We can save now without the mortgage/rent but a trustee will just take it anyway. Or we file, pay rent and have nothing left to save.

I apologize if this is hard to read as I am trying to type this quickly before I have to leave for job #2. But any advice or opinions or questions would be appreciated. I know every situation is different but I am trying to decide whether delaying BK will be beneficial for us or detrimental.

[keepmine]

If, you are able to support yourself post bk then I'd go ahead and file.
Don't worry about justifyng shoes for kids or buying a lamp. Nobody really cares about that stuff.
At the end of the day, the best time to file is when it'll work to your best advantage.

[helpmeout]

If you aren't paying your mortgage, you will not be able to live in the house forever. You will eventually have to move. The bank will still have to do a foreclosure (how long this will take depends on your state and its laws) to get a clear title to the house.

Trying to keep the timeshare is the least of your worries, right now. Getting a post bankruptcy budget into place should be a priority. But only you and your husband can decide when the right time to file is.

[BananaCabana]

Yes, we will be able to support ourselves after BK and we do have a post-bankruptcy budget already made based on our current FT jobs. Everything is accounted for in the budget except for savings/retirement. That is what our second jobs are covering. Savings; retirement & fun. But second jobs can be temporary actions. Sooner or later working two jobs will get to be too much and then that income will be gone. The hard part for me is knowing it is preventing me from spending time with my kids who really do need me home more. Of course, if grocery or neccessity spending comes under budget during certain weeks then that will also go toward savings. And depending on what "corporate" decides I may have a raise soon. Or they could decide to wait until next year before granting one.

There is something else I thought of yesterday. I noticed more rentals being offered in our area in the paper this week compared to the previous weeks for the past six months. So now may also be the time to try and find something. Is this the time most rentals come available what with the end of school and the summer coming?

Most will agree that you should live as long as you can without paying a mortgage or rent. And every lawyer I have talked to has said that the banks don't WANT another foreclosure on their hands so they will move slowly yet you still see a lot of houses being foreclosed on every day. We are in SWFL-Middle District and have received a "notice of intent to foreclose" but have still not seen a lis pendens filed with the circuit clerk's office.

I also have a friend that works for a major bank, name will be w/held, and he told me they have been "prodded" to back off on hounding people and collection efforts and that I very likely will not be sued anytime soon even though it has already been a year of no payments. That makes me wonder if they are also waiting for the general population to get into a better financial position so that they will have a better opportunity to collect on what is indebted. I don't know what the statute of limitations is on a creditor being able to come after you for a debt you owe.

So, in short, before filing we have plenty of money to spend/save although we will only be able to have about $6000 cash on hand, which will be needed for 1st & last month's rent, security deposit and animal deposit plus extra incentive deposit for renting to someone with unhealthy credit.
**$2000 exemption for DH's vehicle
**Our van is upside down but has been kept current so we hope to keep it and keep paying on it
**$2000 for household items which we have nothing of any real value, how can you with 5 kids and that many animals living in a small space together?
**That leaves $6000 left since we are surrendering the home and timeshare with the hope of being able to "buy-back" the TS but I am prepared to see it go if it must.
After BK we will be just like most people and living with a budget but still basically paycheck to paycheck.

As helpmeout said, we will eventually lose the house, I just don't know when which keeps you on pins and needles a bit. So my inclination is to keep going as is. Yet there are many times when I go with keepmine and want to just file and get it over with.

Thanks for the responses. I will get as prepared for this as possible (paperwork, etc) and see if the opprotune time presents itself to me.

[JackBondLove]

To me, the main determinant as to when to file was "when will the cash run out?" In my particular case, I had the problem of having some cash in a bank that was to be put towards a home, so I wanted to get the home quick enough to avoid having it be confiscated. If you have cash that you cannot spend (i.e., without possibly getting the wrath of a nosy trustee), then you should definitely spend it rather than have to fork it over.

Of course, there is always the reason to just get it out of the way and get on in life. For example, you know that you are not going to be in your house at some time in the near future. So getting over the move to a new house now would make sense (especially before the new school year.)

As for renting a house, even with 5 kids and 7 carnivores, I'll bet you there's someone out there with a house that is not in mint condition that the owner would love to rent and get cash flow, so you should not have a problem getting something to rent, even if it may cost a few hundred $ more because of the carnivores.

[AngelinaCat]

When it makes good financial (i.e. a business decision) sense to file, do so. Never mind what the lawyers say about waiting for a suit. When being pressed because of lawsuits, many errors in your paperwork can occur. Keep that in mind as you plan.

In our area are many rental and for sale signs. Shop around in your school district and see what you can find to rent. Summer is at hand and now is the time to make a move or stay put--whichever you think is best for you and your family. The banks don't homes vacant; nor do they want yours vacant, so you may be able to work a deal with your bank, or another distressed person.

Good luck to you!