Considering BK Ch.7 Need help!

[purplehrj]

first off. I live in AZ
My husband got a summon paper from a collection agency and he filed an answer couple weeks ago.
We worry that all of the other banks and collector might start to chase after him, so we are considering a bk, well he is, not me.
I dont have any financial issues at all ( have only 1 cc that im making payments every mos), but my hubbie has about debts adding up to about 7k and up. (this is all we know for now, need to fully check his credit report..)

We just got married over a year ago, and all of these debt were incurred before our marriage.
our debt might sound minimal, but in our situation, debt is still building up and we make so little to make a living..
I recently got laid off, and a full time student, and he is working part time and going to school, so i'd say we are expected to make about 25k all together for the whole year, which is way below what 2 ppl should make lol.
I get help from my parents for school tuition, along with the grant.

we've been to "A" lawyer today about ch7 and he said my husband qualifies.
he does not have any bank accts under his name, no joint accts either.
his direct deposit comes in to my acct, with my name on it (he is beneficiary), and i have about 500 in checking and 3k in savings right now.
I recently received 3k from my parents for school purposes, so that is sitting in my savings at this point.
the only thing that we own is my car which is worth less than 5k.
he is willing to keep his car, which has about 4k left to pay it off, and we dont own a house.

I need to know what i can do to use this 3k wisely before my hubby files ch7.
even tho it is under my name, and my name only, the laywer told me they will take it away still.
as much as i would love to use it for my school, the tuition is been paid already, and i cant make another payment til i register for the nxt semester... (which is not til dec that i can make a payment to school.)

I want to save this amount and hold it for school, but situation wise, that is not going to happen.. I guess ill just use it now, and get a reimbursement from my hubby, haha.

can i make a payment to the lawyer with that 3k? is that legal? (sorry if this sounds dumb..)
I know that i should use that amount for living expenses, but does that include making payments couple months up front?
for ex) paying off my insurance up front (i have 3 mos left), or paying his car pymt more than the normal, maybe pay off my cc, ect...
our lease for the apt is up in oct, and we want to move to somewhere a bit cheaper but bigger size. im 22 yrs old and i just made my cc like 4 mos ago, so my credit is in good standing but the score is really low, and plus i have no job right now... should we rent it before ch7 even tho he has a bad credit now? or would it have an effect? (he has income, i dont..)

Were gna go see several other lawyers before we file one, which i know we have maybe 3mos to find. the lawyer said we have about 3 -4months til the court date, which we have not received.
i cant just trust one person's word vs. what you guys have to say, since that lawyer wanted us to pay 2600 for filing ch7, even tho our case is probably a LOT EASIER than others with higher amout of debt.

Oh and also! what other things are there that we can add to filing ch 7? like many others saving cash, i wna know what my options are to save money to rebuild his credit!
sigh..... help us please!! Im very stupid about things like this so sorry for the confusing post and let me know if theres any questions.
just to clarify: my hubby is going to file ch7, not me.

[keepmine]

Do not file l over $7K.
At some point, as your finances improve you should be able to settle those debts. BK at this stage is overkill.
Your problem isn't debt. It's lack of income.Finding a job is your first priority.Your husband needs to consider dropping out for a semester or 2 and getting a better job or another pt job and help get your finances stablized.

[purplehrj]

the thing is.. im worry that it is not going to be any better.
parts of his debt are medical, but most of them are cc.
the collection agency thats sueing us originally purchased the debt of 750 from chase,
and now they want us to pay them back of 1400, and wont settle any lower than 1300 (after subtracting their attorny fee...)
there are more debt that are about to slapp our face pretty soon and we wont be able to afford all that and try to make a living.
I am trying to get a job, (have an interview nxt week), but i can only work so much even if i get one.
his job only lets him work part time, and if he wants to be a full timer, he needs to transfer, which is going to be another problem.
neither of our parents r in shape to help us out, and that 3k could be used up to pay off his debt, but then my school tuition would be in jeopardy since we cant save up another 3k by the time a new semester comes.

the laywer mentioned making deals to consolidate his debt with the debt collectors, but he said there might be a chance of denial.
would that be a better option to try, then to file ch 7?

[keepmine]

Filing bk over $7K should never be a consideration.

Put these debts on the backburner for awhile and concentrate on supporting yourselves. It's impossible to settle debts if you don't have the income to settle.
You're very young and dealing with some serious stuff. I'd just hate to see you make the mistake of a lifetime and file over a negible amount of debt.

You may want to post this on some sites that deal with collection activity.
Try creditinfocenter.com or creditboards.com

Also, check out the collections forum on this site.
Always remember that, the goal of a collector is to frighten you into paying. Don't give in. You 2 have very little anyone can take right now.

[bigtim6656]

WIth your income I doubt they can collect. Hard to garnishee the income. Might be bad advise but what about getting a student loan for your bills and use the extra cash to pay the debt.

If you filed your looking at spending 3k to cover your bank account. That cuts the debt down to 4k plus atleast 1500 would go to a lawyer(that is my cost for mine) that will be the 1400 for the debt you talked about. I do not knwo if I agree with the do not file. If I was being sued and dragged into court over 7k and I could file I might. Better to get it done and move on vs fighting it till yo0u build enough debt t file.

Though your looking at a high cost to file both money wise and your credit. Might consider taking the 3k and paying down some of the debt. Plus it will help his credit.

YOu said your tuition would be at risk if you used the 3k for debt. If you spend it ant it going to be the same.

Also check out the direct loans and pell grants should be able to get your tuition covered unless your going to a costly school.

[tcreegan]

don't file

but in our situation, debt is still building up and we make so little to make a living..

Hi purplehrj, this statement is why he should NOT file BK. As others have said, you don't need BK, you need more income. At present he is what they call "judgement proof"....this means that if they get a judgement there is no way to collect it; he has no assets, not enough income to garnish, nothing to collect.

there are more debt that are about to slapp our face pretty soon and we wont be able to afford all that and try to make a living.

You can't afford it now....and you don't have to, just let it sit until you get on your feet financially (out of school with good jobs) If they file for a judgement...well....so...what can they do? Nothing really.

Whatever happens, do NOT file BK until you both are out of school.

Do some research, find out exactly what happens/can't happen if you don't pay on the cc debts. As I told my wife when I was in school; remember that they did away with debtors prisons a hundred years ago.

Take a deep breath......

Tom in Colo

[IBroke]

Filing bk over $7K should never be a consideration.

I totally agree. If been thinking about BK for long time before I finally hired an attorney and my debt is $350K - so go figure..

[bigtim6656]

I would agree, I was sued when I had my business when it was on the way down. 2500 bucks never showed up to court. Then they tried to have my income granshied Got to love SSDI payments. Did not show up for that hearing. Got sued a few years back in the wrong state Thus they could not even try to take my money. Well they said they could. Then I got sued again and a third time did not show up. I did make 2 50 dollar a month payments to avoid driving 3 hours to the court house.

I am and will be unsueable till I get out of school. But unlike you my debt is done building and I need to work my way toward a better credit rating and I have ohh right around 30to35k in debt. Plus non of it is med, credit cards, or a house. If your income is enough to granshee then you need to go to court. Plus if there going to take so much of it you should file, though if you still are building debt then you do not want to.

Now if you can stop building debt then you could file, better now then later. No reason to build debt if you do not have to. I would likely wait untill you where 4 or 5 months from graduating. That way you can get it done and not be waiting for a good job or worrying your income will be to high

but in our situation, debt is still building up and we make so little to make a living..

Hi purplehrj, this statement is why he should NOT file BK. As others have said, you don't need BK, you need more income. At present he is what they call "judgement proof"....this means that if they get a judgement there is no way to collect it; he has no assets, not enough income to garnish, nothing to collect.

there are more debt that are about to slapp our face pretty soon and we wont be able to afford all that and try to make a living.

You can't afford it now....and you don't have to, just let it sit until you get on your feet financially (out of school with good jobs) If they file for a judgement...well....so...what can they do? Nothing really.

Whatever happens, do NOT file BK until you both are out of school.

Do some research, find out exactly what happens/can't happen if you don't pay on the cc debts. As I told my wife when I was in school; remember that they did away with debtors prisons a hundred years ago.

Take a deep breath......

Tom in Colo

[Exployer1234]

I would not file for 7K debt. Let them try to garnish wages. At this point each state has a cap on what they can take. Example in my state it is 25% of your pay after federal taxes are taken out. Now in the fine print you are supposed to be left with a certain percentage over the minimum wage amount in the state I live in.

I know it can be stressful to go through this, but a BK should give you a fresh start and basically all BK is going to do for you right now is take away old debts. It will not increase your income to start to save for the future.