Being sued by Chrysler, U.S. Bank, Chase, and more. Need advice desperately.

[Broke2011]

I have over $65,000 in credit card debt and a $75,000 SBA loan that I stopped making payments on a year ago with about nine different creditors. Our business sales dropped in half after the 2008 financial disaster and we ran up debt to live on and make payroll. Eventually we had to let the two employees go and move my business home to survive.

At this time we are starting to be sued ny multiple creditors with more on the immediate horizon. Until now we have eluded any judgements, but we are less than a month away from getting several of them. I am desperate for advice right now.

Since late 2008 we have weathered the worst financial storm of our lives. I have been working 20 hour days and stressing myself out to the point of exhaustion to try to avoid losing our home and vehicle for over two years now. We lost a newer vehicle last year when Chrysler repossessed it, and they took us to court last month. I asked for a continuation and got one until June 22. I went to a U.S. Bank court date for a $20,000 VISA last Friday and denied the debt... otherwise the bank would have gotten a judgement against me right then.

Did I do the right thing? We have several more creditors getting ready to sue us, not to mention the $75K SBA loan. I don't know what to do, and I am at my wit's end. I think our home has too much equity to be able to qualify for Chapter 7, and my income is not stable enough to be able to guarantee a Chapter 13 payment. Plus I don't want my business checking account to get locked up or my business PayPal account seized - if either of those things happened we wouldn't be able to eat!

If these creditors get judgements against us, can they seize our checking accounts and/or PayPal account? If so, how can people survive when this happens? I would like to have bankruptcy protection, but with $100K home equity and $150K in debt, I am not really bankrupt. My income is right on the edge to qualify for Chapter 7... so it could go right into 13.

What would you do if you were in my shoes? I am desperate for advice, so any input would be very much appreciated!!!

[newbie2]

If I were in your shoes and facing the lawsuits I would file for bankruptcy, realizing that I may lose my house in the process. For me, the "gut wringing" trying to keep a house wouldn't be worth the stress of what you are going through (and will be going through).

You may want to get an appraisal of your home (certified appraisor, not a CMA) to find out the current market value. That can differ from what your taxing authority says it is worth.

I also highly suggest you make appointments to consult with a couple of bankruptcy attorneys to go over your options.

Good luck to you.

[disconapper]

Being sued is what was the nail in the coffin for me, so to speak. That triggered my decision to actually file. I was served with one summons and I knew for sure more were coming, it was only a matter of time. I had met with an attorney for consultation prior to being sued and about 2 months later I was sued, that following Monday I put the attorney on retainer. I can say that filing for Bankruptcy is stressful but I'd rather go through my current stress 100 times over than having to worry about pending lawsuits, wage garnishments, etc. A bankruptcy could be a definitive resolution to your problem, rather than living in day to day fear.

[tobee43]

as newbie points out, is this all worth it....really?

we personally, after 33 years and after many tears and all the fears, realized it was time to give up the house. it was the most sound and the most difficult business decision we ever made. but, for us, it was the right one.

i know it's so hard right now and the world seems likes it's falling down around you....but you need to step away and look at it outside the circle and really think about what's best for you and your family.

you can hold these creditors off for a bit, but in the end they will get their judgments and usually garnish, or put liens against what you own, depending on your state laws. (also, note that even IF they do get a judgment now, if you end up filing bk, you can file an order to vacate those judgments once your bk is discharged and get them removed.)

i can only say this to you. for us, filing bk and surrendering our home, even after living in it for 33 years, was the BEST thing we ever did....except marry each other over 40 years ago...(although, we both might not exactly see it that way)...LOL ...oh and our kids of course.

memories are in your heart and not the walls around you...and you carry your heart everywhere you go.

best of luck to you...i'm sure you'll do what's right for you.

[ssmdem]

I agree with tobee -- memories are in your heart not the walls. And it took my 12 year child to make me see that. I was working two jobs and getting about 3-4 hours of sleep a night. My husband was gone more than he was home with his job. All of this to try to make a mortgage payment that we just could no longer afford because of a change in job situations. When I asked my 12 year old how she would feel about leaving our home, her response was that she just wanted us all to be together. She said it didn't matter that they had the pool and the huge lakefront home if we never got to enjoy it with them. That was my breaking point which helped me to let it all go and make the decision to file.

[AngelinaCatHub]

It is bk time for you, my friend. You do not want a Judgment, not one. I own a Judgment for only 1200, took the thief's $6500 car on a writ, purchased it and only satisfied $8 of her debt to me. I could have pecked her to death, but got my pound of flesh from that thieving person. You don't want anyone doing that to you as they will very quickly clean you out. Filling will stop (toll) all suits. You don't know 7 until you try. You are killing yourself trying to maintain, and death is natures way of telling us to slow down. Best you get that paper work filed and get some stress off of you and your spouse. Trust me you will get your 7.

I suggest download the Chapter 7 book about 21 bucks from Nolo Press. It and this forum is all you will need except a lawyer. 'Hub

[daylate]

And another thought-if your calculation of the equity in your house is correct and you want to keep it maybe you could work a deal to buy the equity from the trustee. And probably for a bit less than the 15k you think is there because it is rare in this day and age when a house sells for its tax appraised value.

As to the equity in your house is it 100k or 15k like you said in your other thread? Obviously big difference.

[tobee43]

And another thought-if your calculation of the equity in your house is correct and you want to keep it maybe you could work a deal to buy the equity from the trustee. And probably for a bit less than the 15k you think is there because it is rare in this day and age when a house sells for its tax appraised value.

As to the equity in your house is it 100k or 15k like you said in your other thread? Obviously big difference.

that surly would make a huge difference in the view of the bk courts. OP should really be certain as you point out, exactly what the equity in the house is.

[Broke2011]

The equity in the home AFTER all the exemptions is around $15,000 over the limit. (That is what I referred to in the other thread.) However, I just talked to my mortgage company and the rep said we owe $10,000 in late fees, etc., so we are only $5,000.00 over.

One thing I didn't mention is that I have a rack of web servers in my basement that I run my business on. I host websites for clients and I need a stable T1 connection to feed my web servers and database servers, not to mention a whole-house generator to keep them from going offline when the power goes off during storms.

This is the main reason I dug my feet in, because moving my web servers to a rental home or apartment is not a viable option. The business would probably be ruined if I lost my home and was driven out, because things such as the move of a T1 connection can take 45 days to schedule.

Given this new information, would any of you consider trying to workout settlements with my creditors? Do you think it would work if I called them and said it's either a settlement this week or bankruptcy next week?

Another option would be selling our home, which could probably happen very quickly because the real estate market in Central Illinois is pretty good right now. However, if I don't beat the judgement collections, the creditors would just grab the money from the sale of the home like hungry wolves going after a carcass.

Thanks for all your help. I hope to be a part of this community for a long time and maybe I can help others after I go through it.

[daylate]

I'm not sure but I think the late fees are added to your mortgage balance and therefore reduce your equity. So if that is the case then you would seem to be fine on the equity-if you hve ot buy back 5k from the trustee you should be able to work it out.

However form reading your other threads, it seems to me that you have a multitude of issues to deal with. First and foremost is your reluctance to file-you are angry and probably rightfully so, but the situation is what it is so you need to get your head straight and deal with the problems at hand. Then there are the business assets to consider,servers in basements, etc.

You need to get a very good bk attorney. listen to them and take appropriate action. What are you waiting for? If you don't file you are going to get sued and have judgments issued against you. Ultimately you will probably have to file anyway. Quit being angry, feeling screwed, etc and get it done. You will feel so much better and hopefully you can save your home and business.

We have all been where you are to some degree or other-I don't remember one person reporting back that filing wasn't the best thing they ever did. It is time for you to join the club. Get a very good attorney and take action.

[overit]

I think you should consult at least one BK attorney, to get his/her take on where you stand. Assuming that your hosting service income is vital, you need to talk to a professional to find out what your options are in regards to protecting that business.

You don't want the judgments against you to start, and you need to act before they do.