Very confused, pros and cons of filing now or waiting 90 days

[murphsmom]

Reasons to file now:

1. I can't take the stress of this much longer
2. We returned a car to the bank in January and they are now threatening to sue us for the difference of $1800. I'd like to avoid that suit, and garnishment of husbands wages.
3. Our mortgage modification just went through and will become official on May 9th. The bank knows we are planning on filing Chap 7 and wants us to reaaffirm the mortgage ASAP. I don't know what will happen if we wait to file for a few months and can't reaffirm until we file?
4. Husband continues to look for another job. No interviews or anything in the near future, but it's "possible" that could change within 90 days, and I don't want to mess with the means test, which we comfortably pass right now.
5. I can no longer make my cc payment and my debt consolidation payment (together totaling $600 month). I'm up to date until now. The creditor is from a large local credit union, and they WILL begin judgements soon.

Reasons to wait 90+ days to file:

1. We just decided to file a joint case, we were just planning on my husband filing until about 2 weeks ago. I have charges within 90 days of filing date on my CC card equaling about $790. Necessary items, one hotel expense for my nephews out of town wedding.
2. If I understand it correctly, even if there was just a $10 charge on this card within 90 days, it could be considered an "abuse case" and drag this out further. All charges made within 90 days are automatically non-discharged, correct?
3. We are expecting a federal tax refund for 2009 ammended taxes to come through in approx 3 weeks. The trustee will claim this, and then we automatically become an "asset case" rather than a non-asset case. Without this tax return we clearly would be a no asset case. We have nothing of value, except for what falls under the exemptions.

I'm scared to file now. I'm scared to wait.

[tobee43]

i know this is so hard for you....but you need to sit and take a breath...and try and hard as it may seem to relax for just a few.

first, the stress is making you think that someone is going to arrive at your door in a minute and the sky will fall. promise it will not.

one of the best indications to me personally when i feel it needs to be done now...RIGHT NOW ...is usually the first sign you need to wait.

believe me, even if someone gets a judgment in between you filing dates..after the discharge you move to have a order to vacate the judgment. there is usually absolutely NOTHING that cannot be straighten out.

we file about this time and rec'd a HUGE tax return and the were advised by our atty to spend it ASAP...we did, there was no questions about it by the trustee whatsoever. i believe the mod hmm has an excellent thread that is sticky on the subject matter that oct is the time trustee's really begin their interest in your refund money...although, i'm sure it all depends.

many people are behind a year on their bills before filing. and while i understand the reason you feel this way is because you are honest and feel the guilt, it just goes along with the fears and tears with this process...it will pass.

i would do what you think and feel and KNOW what is right for you. however, the first...and i mean the VERY first thing i would do is take a REAL break from this and you need to attempt to remove yourself and your emotions to make a sound business decision for you and yours. read a book, watch a movie...numb your mind and then go back to it...i know...much easier said than done..really.

best of luck...you can and will do this!

[AngelinaCatHub]

Tobee has given you good advice. Have you an attorney yet? One good lawyer we had always told us that we pay him to worry so we won't have to. Very good advice. Unfortunately it was not our bk attorney who did NOTHING. If you get your refund soon, pay the $750 dollars to that card. It would not be preferential before you file and it would negate any chance of fraud. After all, you want release from your pain, the money does not count. If the Trustee asks why you paid your taxes refund to a CC, simply tell him what you said here. The truth. 'Hub

[murphsmom]

Thank you. I'm really trying hard not to be too emotional about all this, and just hang on for the long ride ahead. A huge part of me just wants this to be OVER, file and let the chips fall where they may and deal with the consequences, but another part of me understands the importance of carefully planning this out. I will kick myself if we make the wrong decision, though.

I should clarify, I owe much more than just $750 on that card. But $750 is what has accumulated for the past 90 days for living expenses. So, I'm not sure paying $750 toward the card would make a difference?

[MSbklawyer]

If you have charges that are within the 90-day bar of § 523(a)(2)(C), only those charges made within the 90 days are non-dischargeable. It doesn't make the entire credit card balance non-dischargeable, only those charges. And not ALL charges made within 90 days are non-dischargeable. See § 523(a)(2)(C) http://www.law.cornell.edu/uscode/us...3----000-.html

On balance, I'd say wait. Get your tax refund back, and get the 90 days behind you to avoid even the potential issues. If the bank hasn't actually filed suit yet, you're in no imminent danger of wage garnishment. Your mortgage bank can't do anything to you as long as you're current on your payments. Once you've filed, there will be plenty of time to reaffirm if that's what you choose to do.

Take a chill pill or beverage for the stress.


This will be behind you soon.

[IHateToBeEmo]

Hi murphsmom, this is obviously a very stressful time in your life! Just make sure all of your ducks are in a row, your attorney is paid in full, and you can push the "bankruptcy" button at a moment's notice.

We waited until our car lender filed suit for the difference of what we owed them and what they got at the auction. Then we filed bankruptcy.

As far as "re-affirming" your modified mortgage, I think you're safe to sign papers agreeing to the mortgage modification. You can put your "intention" to re-affirm in your bankruptcy filing. Any official "re-affirming" of the mortgage is done after the bankruptcy filing, and most people here, me included, would recommend that you don't sign a re-affirmation agreement. It puts you back personally on the hook for the loan, much like you currently are for the car loan.

While you wait, you'll have to keep track of your income each month so your past 6 months income for the means test will be accurate. Other than that, be ready to file at the drop of a hat.

[IamOld]

Murphsmom - everyone else here is I think very right - also - even even even if somehow your husband's wages were garnished - for which in NYS (especially NYC since courts are more clogged) takes a few months from lawsuit to judgment to garnishment. BUT even if the WORSE were to happen - which it won't - in NYS they can only take 10% of what NYS considers to be disposable income and you can only have one garnishment at a time. So at worst, you'd be looking at 10% of income after his taxes are deducted from his pay etc. TEN% NOT the fed max of 25%.

One nice think about NYS!!!!

[murphsmom]

OK, I will breathe and stop freaking out. It just threw a major loop when I decided to file, and I feel completely unprepared. I'm thinking that waiting 60 -90 days to file is the best course of action at this point, but will be ready to jump if need be. I haven't used the card in a month, so 60 days from now it should have no charges on it. My son has a $5 internet charge for a game he plays every month, need to cancel that payment asap.

I've read the sticky about the dangers of reaffirming the mortgage. I guess my question now is, what happens if we DON'T reaffirm it? What recourse does the bank have? Will our credit be ruined for ever and ever until we do? There is also a balloon payment at the end of the mortgage, if this house were to head to foreclosure, we could never get out from under it. There is no equity in it now, add the balloon payment and we're in trouble. I'm just not totally clear on what not reaffirming will mean to us over the long run, but more scared about what reaffirming will mean!

[frogger]

Take a chill pill or beverage for the stress.

Indeed, but don't ruin it by adding Coke.

[IamOld]

Hi - first, there is a lot of GREAT advice and very very smart people like frogger, despriteya, etc on this board! BUT one thing I do know - IF you do NOT reaffirm the mort, you do not OWE it and can walk away from the house and owe nothing. Now, whether the bank will let you keep mort w/out a reaffirmation and/or if the balloon payment is a monkeywrench, that I'd ask your future attorney. Again, if you do not reaffirm, and the bank allows you to keep paying, you can walk away at anytime and owe nothing. Of course the house will be foreclosed on, but they can't come after you for any $$$ as the loan itself was discharged in the BK.

OK, I will breathe and stop freaking out. It just threw a major loop when I decided to file, and I feel completely unprepared. I'm thinking that waiting 60 -90 days to file is the best course of action at this point, but will be ready to jump if need be. I haven't used the card in a month, so 60 days from now it should have no charges on it. My son has a $5 internet charge for a game he plays every month, need to cancel that payment asap.

I've read the sticky about the dangers of reaffirming the mortgage. I guess my question now is, what happens if we DON'T reaffirm it? What recourse does the bank have? Will our credit be ruined for ever and ever until we do? There is also a balloon payment at the end of the mortgage, if this house were to head to foreclosure, we could never get out from under it. There is no equity in it now, add the balloon payment and we're in trouble. I'm just not totally clear on what not reaffirming will mean to us over the long run, but more scared about what reaffirming will mean!

[murphsmom]

We do have a great attorney who was also a bankruptcy trustee in this area for many years.

I'm concerned with "if the bank allows you to keep paying"...

If they don't allow us to keep paying, then what? They foreclose, but we don't owe a penny? However, we also have no place to live with two teenagers and two much loved dogs. Credit ruined, wouldn't get another mortgage and there isn't anything worthwhile in our city to rent in our school district (son is a Sr. daughter is a Freshman, simply refuse to uproot them to god knows where). However, if they DID allow us to keep making the payments without reaffirming, we'd choose that option!

[IamOld]

I understand perfectly. You need a place to live! Again, I think this is a question for your atty, as the bank can insist on reaffirmation BUT - as I humbly understand it - BK case law MAY say that they cannot kick you out as long as you are ALWAYS current on the mort. Again, atty question :-) Worst thing comes to worst, you reaffirm.

I perfectly understand, as I have kids myself, and am pondering a job move to another state, which means moving kids HS age :-) This isn't easy...God knows....

We do have a great attorney who was also a bankruptcy trustee in this area for many years.

I'm concerned with "if the bank allows you to keep paying"...

If they don't allow us to keep paying, then what? They foreclose, but we don't owe a penny? However, we also have no place to live with two teenagers and two much loved dogs. Credit ruined, wouldn't get another mortgage and there isn't anything worthwhile in our city to rent in our school district (son is a Sr. daughter is a Freshman, simply refuse to uproot them to god knows where). However, if they DID allow us to keep making the payments without reaffirming, we'd choose that option!

[debee]

You don't have to reaffirm the mortgage to stay in the house. You can do something called a "stay and pay". The lender cannot foreclose so long as you remain current (payment, taxes and insurance). Your lender has to abide by state law.

As others have said, indicate "reaffirm" on your statement of intentions come filing time and then don't sign any reaffirmation agreement. Just keep making your payment on time. The lender cannot foreclose simply because you will not reaffirm. You have to be in default.

The worst possible case scenario (& so far this has only happened in real estate cases in one circuit and that circuit is not yours) is the lender will initiate a bankruptcy proceeding in order to compel you to follow through on your intention to reaffirm and if you don't, then to surrender the house. However this is rare and has never happened in your circuit. But you leave any decision to reaffirm or surrender until such a time as you actually have to make it. And then you confirm your property value/equity position, etc before you make it. For 99.99% of us, that day never comes.

[tobee43]

please there are some of US that changed at some points in our lives...also single barrel PLEASE if it's goin be JD..

Indeed, but don't ruin it by adding Coke.

[debee]

Party hearty marty