Unemployed. Was planning a 13, Now a 7

[Idjut]

Well, after months of careful planning in anticipation of filing a 13 in June, I found out today I am unemployed. Since we are now under median, we should be able to file a 7. We are current on our house and HELOC, and plan on keeping it. The mortgage payments are doable. Just clearing out all the unsecured debt. We need to figure out what to do about the vehicles. We have a truck worth around $11,000 and a van worth around $3000 (both paid for). We also have a vehicle with a loan which still has a balance of around $23,000. We bought this vehicle to get us through the 13; intending our daughter to drive the old van when she turns 16 next year. Not sure if we'll get to keep them all. Got a call into the attorney and am waiting for reply. Thought we had it all figured out, and now everything changes. I don't know...maybe it's a blessing in disguise and will get us out of the 5 year plan. I don't know.

[Pjmax]

You may have to delay filing. Your income is based on the last 6 months.

Sorry, don't have much knowledge on the autos, and I am sorry to hear about the job loss. That hurts, I know. Better days ahead.

[Idjut]

Thank you. I've been miserable in that job for a long time. I'm scared of the thought of hitting the job hunt trail though. One foot in front of the other and keep going though...what else can you do?!?!? I'm hoping we can still qualify for the 7, because from what I've read you have to at least be able to fund a plan of $100 per month even if above median??? I don't think we can do that now. Worse case scenario, we are forced into a 13, but maybe we can get the 3 year plan instead of the 5, and maybe convert to 7 later??? I don't know. I don't think I can put up with the creditor calls for much more than another month. Still waiting for the attorney to call me back. I left a detailed message, and he's good at returning calls. My guess is he's weighing the options before he calls me back.

[LadyInTheRed]

I'm hoping we can still qualify for the 7, because from what I've read you have to at least be able to fund a plan of $100 per month even if above median???

Yes, but that is based on your income in the 6 months before you file. So, if you can pass the means test based on your last 6 month's income, your good to go. Otherwise, you should probably wait. It could be anywhere from 1-6 months depending on what your income was before you lost your job. To qualify for a 3 year chap 13 plan, your income for the last 6 months has to be below median. Unless you have a good reason to file right away, like to stop a foreclosure, filing a Chap 13 while you wait for your 6 month look back income to decrease is not a good idea. Write letters to your creditors telling them not to call you. Or get Google Voice to handle the calls.

[Idjut]

Thank you. I'm wondering how long until the credit card companies try to take us to court? We're delinquent 1-2 months.

[LadyInTheRed]

Thank you. I'm wondering how long until the credit card companies try to take us to court? We're delinquent 1-2 months.

You still have some time. Even if they sue you, it takes while to get a judgement. Even if they get a judgement, that can be taken care of in your BK. Don't rush to file because you might get sued. If you are actually sued, you will have plenty of time to get your BK petition filed.

[ccmisery]

I lost my job 2 weeks ago, was going to file as a 13, lawyer said to file as a 7 and prior income would be claimed as phantom. I only had a job for 6 months, was unemployed 6 months prior to that, not sure if that factored into it?

I still do not have a job, my 341 is next month. If I do get a job, I was told it's possible the trustee will request a 13 and dismiss my 7. Wait and see at this point, my lawyer felt confident that this would fly, not sure yet if it will?

I was also 6+ months past due on a couple of my credit cards, I got the usual calls and mailings, but no judgements or threats to sue. Some people go years and nothing ever happens. Now that the petition was filed they are all being notified and the automatic stay is in progress.

I use a VOIP phone service to handle my calls, let's me block them all and the phone never rings. So I never talked to any of them.

I had a car that was paid for, old high mileage, but I was told to finance a new car and keep the payments under $500 or so, this helps with the means test and also having not much equity in it, they can't take it and make me buy it back.

Passing the means test is it, there are exceptions.

http://www.nolo.com/legal-encyclopedia/i-recently-lost-high-paying-job-can-i-file-bankruptcy-immediately.html

[Idjut]

My employment was steady, and we were definitely above median. Doubt that would be "phantom" income, whatever that is. I'm just hoping we can squeak by on one income. We have some savings, thankfully. We could wait a month or two if we had too. Impatiently waiting on a reply from my attorney. This really complicated things. I'm so glad I found this forum. Thank you especially LadyInTheRed. I've been following your posts for a long time. I love your helpful and knowledgable advice.

[AngelinaCat]

We also were planning a Ch13, even though the counselor for the pre-filing course we had to take, told us that we were really more suited to a Ch7 instead of the 13 because of our income/debt ratio. When I lost my FT job, that cinched it, we had no choice but to file the 7.

[AngelinaCat]

I need to add that if you had a pension plan at your prior position--if the employer gives it to you in a lump sum, roll it over into an IRA or other retirement instrument. Don't spend it like we did, trying to pay down bills. That was one of the mistakes we made.

Good luck to you.

[TRfromillino]

Idjut, there are many others qualified to answer your more technical questions, but on the creditor calls, I can answer. I stopped paying my cc a year ago this month, and didn't file until the end of this past February when I finally had enough money to pay the attorney. (Wish I had a do-over on that) I simply waited them out. I only have my cell phone, no land line and it took a long time for them to quit calling. Eventually they did taper off to almost nil. I just kept my cell phone on silent forever til they stopped. Annoying yes, but when all is said and done, I've really mostly forgotten about that time. Don't get in a rush because of the creditor calls, and end up not doing the right thing! Good luck!

[Idjut]

I do have a pension. I have no intentions of touching it. My attorney was adamant about it in fact. I've already changed my cell number, and I did get one creditor call at work while I was employed, and I politely told them not to call me at work, and they stopped. My hubby is more resistant to change his number, but he may have to get over it, since they are now calling him 20+ times a day.

This has been a craptastic day to say the least. The job loss I can handle, but no one knows about our pending BK. I just can't divulge that information. Maybe someday, but the shame & guilt is something I'm trying to get over myself. Not ready for the judgment of others yet, which is why I'm so thankful for this site. Makes me feel like I'm not alone, and I will survive.

[ccmisery]

If you do not have the option to use another phone service and only have a landline and cannot block your calls, I suggest you get a cheap prepaid cell phone and once you get that number go online and change all your credit card account contact phone numbers, only list the cell and remove your landline. Then you can just let the phone off and let it expire, they will soon fill your voice mail.

Also do not feel bad about filing bk, I was never late on my credit cards, paid them and was paying them off slowly. I tried to be a responsible consumer, but had a lot of events happen with my wife losing her job in the big downturn, and me losing my job twice in one year on top of taking a reduction in salary for the second job. This put us in dire straits that left us with no choice.

I originally thought about filing bk in 2007 since I was realizing my salary was not enough to ever get me out of debt, I held off and can only imagine the amount of interest and money I paid on my credit cards since. I even brought most of them up to date after getting my 2nd 6 months ago in hopes of not having to file, that was a lost cause.

[AngelinaCat]

I do have a pension. I have no intentions of touching it. My attorney was adamant about it in fact.

That is great! I wish our attorney had been adamant about this in our case. Alas, she did not do a good job educating us about the process, and she and her assistant were also AWOL whenever we had questions. We didn't realize it was my pension payout that hit our bank account when it happened. We were as dumb as a bag of hammers.

We too were thankful when we found this site--it just didn't happen until after we made a lot of horrible mistakes.

This has been a craptastic day to say the least. The job loss I can handle, but no one knows about our pending BK. I just can't divulge that information. Maybe someday, but the shame & guilt is something I'm trying to get over myself. Not ready for the judgment of others yet, which is why I'm so thankful for this site. Makes me feel like I'm not alone, and I will survive.

You will eventually get to the point that you can realize that filing BK is a business decision for the financial and emotional health of you and your family. I know it is hard now. Just keep tuning in and ask questions, or vent, whatever you need to do. {{{HUGGS}}}

[Idjut]

Thanks again for the support and encouragement. When I hear from my attorney what our new game plan is, I will report. Hopefully, it will help someone else down the road. I was just so ready to file and get it over with after the 3 months of planning. I was OK with the 13. Now the delay and uncertainty. (Sigh.) Thanks, and everyone have a great Memorial Day weekend!