About to file, nervous!

[adm]

So, we consulted w/a BK atty about 6 wks ago. Stopped making CC payments about then (now on 2nd month of missed payments- never late before)--- and have been paying atty instead..figuring we'd file in about a month.

(She was determing 13 vs 7 and today said 7)-- and said she's ready for me to sign!!!!!!!!!!!!!!! I just feel overwhelmed. it's our only option at this time, long run a good thing...but well, I just thought I'd have another month or so to emotionally prepare. (Also thought I should save $ for emergencies, etc).

Spouse unemployed since fall 08 and on UI. So things have been stressful...

This board has been very helpful w/background info-- wonder if I should do anything before signing-- like I was just thinking of changing cell providers...

unsecured: 50K
student loans 160K
affirming house & cars (1 = paid off).

Atty even said I don't need to spend down $ (the money in our acct is for bills, mortgage, etc but still it's not 0....and I get paid tomorrow )...

anyhow, just shocked. it's such an emotional journey but I keep saying its the smartest financial decision we can make b/c even w/spouse being employed it would take forever and a day to pay down all that debt and I have 2 small kids, I want to teach them proper money habits (sure I'm guilty of the occasional indulgence-- but it's a mix of unemployment, all our rates when way up and then I have furlough at work)....

[shark66]

You may want to re-think re-affirming the house...I would if I were in Ch. 7...

My $0.02 only...

Good luck.

[adm]

Shark66- we definitely want to re-affirm the house. I can afford it on only my income...After tax write-offs we would need to rent something for like $700 to = the write-off on our house. And since the going rent on a decent 3br rental is like $1500 (to 1,800) around here-- it makes no economic sense. Most importantly, I can afford the mortgage.

Also I am filing single, in a community property state, so if there ever was (another) unforeseen situation economically, my husband could still file for BK w/in the next 8 yrs.

Why would you advise otherwise?

Thanks

[shark66]

I wasn't saying that you should give up the house.

What I was advising is not to re-affirm, which is a completely different ballgame, because it gives you the option of walking away if the need arises.

You can skip re-affirming the house, keep on making payments and stay in it.

Hope this clears the fog.

Good luck.

[SeattleBK]

I was nervous and scared too, but I've never regreted filing. It was the best financial decision I've ever made, and I should have done it sooner.

If I had, I would have a fat IRA and a lot more money saved by now instead of the tiny IRA I have now.

It sounds like you are telling yourself the right things, "A BK can be a smart decision". Good luck and try to relax.

[KAKRN97]

I too am getting ready to file and am nervous as well. My 86 yr old mother in law lives with us and apparently they take her SS income and pension into consideration when we file even though she only contributes groceries to the household.

I'm hearing that yes they do take her social security benefits into consideration and no they don't. The lawyers office said that because she is counted as part of the household for the median, they have to include her income(including social security) as part of my household income,which makes no sense because she isn't responsible for my credit card debt nor can I expect her to give me money for anything other than her contribution to groceries.

My DH is not filing. I've got over 88K in unsecured credit card debt. I've got nothing saved for retirement or my child's college fund. NOTHING! After I've paid my cc bills, I've got nothing left over for groceries or gas money. So often times, those things would go on a cc. No savings account either . Just had to pay for 3K in car repairs borrowing money from my parents and put some on DH's credit card.

[adm]

Thanks all. Thanks also about the reaffirming comments. I thought you automatically had to reaffirm debt you were keeping (for me that's our house and car)-- but apparently you don't. Do they try to make you? We are current.

KAKRN97- as for SS, since that comes FROM social security I don't think it's supposed to count?!?! That was our back & forth w/UI, it does come from SS (spouse is on EUC, so it's all fed $)...and apparently it's by circuit and the judges here tend to say it's included. Boo. But she thinks we're still able to do a 7. My spouse is also not filing.

I feel good but now I have a new concern: The scrutiny to our information, how money is spent, etc. I mean we don't live the high life or anything.

Too bad I'm going to sign at 10am, I might deserve a cocktail afterwards!

[KAKRN97]

I found out yesterday afternoon that I no longer qualify for CH 7 since DH is back at work and making his normal income...was told we have 1K extra income per month so that disqualify's us for Ch 7 and I have to file Ch 13. Since I pass the means test I only have to repay over 3 yrs about 36K at 1000/month.

So today I am going to sign the papers. I wish I'd have done this two months ago then I'd qualify for Ch 7 for sure! I just hope DH doesn't get laid off again..I don't know if he went back on unemployment if I could convert to Ch 7.
I'm worried also about being scrutinized with my expenses. I just had to have 3K worth of car repairs done to my vehicle. A new transmission, engine tune up, coil springs..etc. I borrowed $1250 from my mother with plans on paying her back. The remainder went on DH's credit card. Now DH is ticked because I told him I can't pay him back until my debts are discharged, same with my mother. Now if I file CH 13..are they prevented from getting paid back until I'm finished with my payment plan?

[GettingGoing]

Thanks all. Thanks also about the reaffirming comments. I thought you automatically had to reaffirm debt you were keeping (for me that's our house and car)-- but apparently you don't. Do they try to make you? We are current.


No you do not have to reaffirm your home. The bank does not want your house. As long as you keep up on your payments then you will be fine. Not reaffirming the mortgage gives you the ability to walk away in the future if the payments become hard to manage.

KAKRN97- as for SS, since that comes FROM social security I don't think it's supposed to count?!?! That was our back & forth w/UI, it does come from SS (spouse is on EUC, so it's all fed $)...and apparently it's by circuit and the judges here tend to say it's included. Boo. But she thinks we're still able to do a 7. My spouse is also not filing.

I feel good but now I have a new concern: The scrutiny to our information, how money is spent, etc. I mean we don't live the high life or anything.


I too was worried that my expenses would be scrutinized heavily by the trustee since we claimed 500/month on student loans as an expense and also 300/month transportation expense. We had our 341 Monday and noting was said about expenses at all. Hopefully it continues to go well. We were way under median for our state so that may have helped us though.


Too bad I'm going to sign at 10am, I might deserve a cocktail afterwards!

.