Looking a Chapter 7 as a way to eliminate credit card debt, many questions...

[DoctorPC]

OK, So I am unemployed and benefits end November. I am current on all bills but I see a train wreck headed my way if unemployment benefits end and I remain jobless.
I own my home with a $83,000 balance and a valuation of $190,000, payment is 1,100
I have 5 credit cards, 2 have near zero balance, the remaining three total 50,000.
I have a rv loan with 15K owed and the value of the vehicle is 20K. I have various other vehicles in various states of repair. I also have a brokerage account that I'll utilize when the UI benefits end. But it won't include paying credit cards.

Will Cha 7 work for me to eliminate the credit cards and leave my few assetts alone?
I was working with a laywer but they blew me off because I was asking too many questions...

[ccsjoe]

Just by the fact that you apparently have 100K equity in your home, plus assets in a brokerage account, equity in vehicles, etc, I would seek another attorney. Interview 3 or so, then choose one. As you had been working with an attorney already, did he explain how he was going to exempt your assets under a CH7? I'm also concerned with your pulling the bk trigger without a source of income. BK will solve your debt problems (most of them) but not your income problems.

[AlmostAmos]

What state are you in? To be honest, it is not looking good. The equity in your house would be a killer IMHO.

[ccsjoe]

What state are you in? To be honest, it is not looking good. The equity in your house would be a killer IMHO.

You and I are thinking the same Amos!!

[tcreegan]

Hi Doc,

Will Cha 7 work for me to eliminate the credit cards and leave my few assets alone? Completely depends on what state you are in....post that and this can get answered.

I was working with a laywer but they blew me off because I was asking too many questions... The wisdom of the forum is to meet with a half dozen attorneys who have free consultations. Find one that is a good fit for you.

Another consideration is doing a Ch 13 instead of a Ch 7

Post your state so we can check the exemptions,

Tom in Colo

[DoctorPC]

In Washington state, former atty stated tax assessment for home are misleading, and to deduct apx 50,000 to have a realistic and saleable price. The 200K is King county's value.
Also keep in mind my monthly house mortgage payment is less than what a small appartment would cost, so it wouldn't be pointless to force me to become homeless ? imho
All the vehicles are older than 2000, the newest is the only running car with a value of apx $4,500, the rest are 77, 84, 84, 90 model years and have little resale value until repaired at a cost of several hundred or thousands of dollars. I was informed that the brokerage account would have to be liquidated or transferred into 401k. But with UI ending, I'll need it in cash to pay the bills..
Bk won't fix the employment issue, but hopefully after a few more college courses & several months and degree the employment picture will have improved a bit. Figure 9 months to complete.

[DoctorPC]

So interview several atty's and choose the one that tells me the most convincing story? That doesn't bode well..

[ccsjoe]

No, not one that tells you the most convincing story. One that you're comfortable working with. For example, I knew nothing about this when I interviewed attorneys. I went with my gut and chose the attorney that did not make my consultation feel rushed, answered my questions and explained why the answer I was getting, was well known to the trustees (check your local bk court website for the trustee calendar, it'll show attorneys), and was willnig to discuss mutual expectations and parameters for our relationship, e.g. expectation of when he will return a call, etc.

[tobee43]

have you done the means test....??? how far off are you?

from what info you have given it appears that they will push you into a 13...unless you plan carefully....is your state a homestead state? is the "other" source of income a retirement plan??? these are all questions that will make a difference as to what you can file. do you want to keep your home??? these are all questions you need answered.

also, don't wait until you are up against a brick wall...which it sounds like you are close to now. that's the time one's "panic" button starts to go and one stops thinking correctly. if you are indeed going to file bankrutpcy do not cash in your savings to pay your bills.

go to 10 atty's if you have to. find the right one that can match your needs. do not settle for less, there are TONS out there that are good and MORE than are terrible...so it's a painful filtering system you need to go through.

a 13 has you by the neck for 3-5 years...and with no job in your immediate future that's difficult to establish regular payments. i would find an atty to get you in a position to advise you how to file or get you to a chapter 7.

[DoctorPC]

With only unemployment as my source of income (30,500) I am well below the means test for single person and median income of 45,000/yr.
Also, former atty stated I needed 3 months of no activity on credit card statements, unfortunately with a emergency home repair that means waiting until Jan 2011 for clear statements.
Can I cha 7 the 3 cards with balances and keep the other 2 with $0 balances.
With UI set to end in November (unless Federal emergency benefits somehow get extended) I'll be forced to liquidate muni funds to pay living expences.

Homestead state? how would I determine it

atty, I guess I should start looking now so when the time is right they can file and I can be done with it...

[tobee43]

well, actually it appears you are asking the "right" questions...

For more than a century, Washington homeowners have been protected from judgment creditors. Specifically, there is a “homestead” that exempts a limited amount of home equity from foreclosure on judgment liens.

The homestead was created to protect families from losing their homes in hard times,1 but in relative terms the homestead has shrunk over the years, so that it now covers only a small portion of the value of a modest house. The Washington state homestead exemption has been limited to $40,000 since 1999, while the average price of a home in Washington has skyrocketed. (Pursuant to Chapter 6.13 of the Revised Code of Washington, there is a $40,000 homestead or, in other words, there is $40,000 of equity in a home that is unavailable to creditors unless voluntarily transferred by a deed or mortgage.)

The median price for a home in Washington state has jumped from $136,600 in 1995 to $225,000 in 2004.2 And the failure of the homestead to keep pace with rising home prices is not a new phenomenon. U.S. Census data show that the median price of a house in King County grew from $9,200 to $236,000 between 1950 and 2000,3 but during the same period the homestead rose from $4,000 to $40,000.

soooooooo...it appears yes, indeed it is a homesteaded state with a max.....that was just a quick google search on your state...i'm certain you can find out much more.

jan...sounds perfect! just hold tight and say close to this site for support...LOL!!!

[IBroke]

Can I cha 7 the 3 cards with balances and keep the other 2 with $0 balances.

In theory, yes. Practically, it is very likely that these accounts will be closed by the CC companies as soon as they know about your BK-filing. I'm trying to "save" two small CCs as well but I keep my hopes down..

[ccsjoe]

In theory, yes. Practically, it is very likely that these accounts will be closed by the CC companies as soon as they know about your BK-filing. I'm trying to "save" two small CCs as well but I keep my hopes down..

You and I are in same boat. I was trying to carry 3 zero balance credit lines (2 cc's, 1 loc). The loc already slammed door shut. The two cc's remain. We'll see, but not really hoping at all.

[tobee43]

nope...didn't work for us either...they closed all my zero balance ones on us...even tho we were never late and were not even listed on the bk....so there really isn't much of a chance...although i have heard it happen...but rare.

[oregonpilot]

I had one CC with 0 balance go from a 2k credit line to $100. to closed within a week of filing.