Scared to death!

[dagz]

Hi everyone! I'm new to the forum. Have over $50 000 in unsecured debt and make around 60 000 a year.

My expenses: $715.00 mortgage
HOA $175.00

My car: $595.00
Wife's car: $555.00
Child support: $500.00
Car insurance $ 75.00
Phones: $ 175.00
Power: $ 150.00
Heater: $ 50.00
Cable & internet: $150.00

My wife does not work, have a 13 year old stepson that does not get any child support. I feel pretty bad since this will be my second time filling bk. First time was chapter 7 in 2007 after my first marriage divorce. I'm having to spend more money on health insurance and my prescriptions expenses are about $135.00 per month since my health insurance has a high deductible.

I have a parent coordinator pointed by court that I now owe about $2800.00 and can't pay her back. She charges 125.00 per hour every time my ex acts up about my son.

I'm in NC, my townhome is worth around $125 000 (per Zillow) and I owe $100 000. I don't qualify for chapter 7 again until June 1st and have been paying much less than mimimal payments to all debtors. I'm pretty scared since don't want to loose my home or cars. My wife needs her car to take care of my mom and take child to school. Cars and mortgage are up to date.

I need a fresh start. Do you think I qualify for chapter 7 or chapter 13 this time?

[justbroke]

You'll need to try one of the free Means Test calculators, such as the one at legalconsumer.com. You're missing expenses such as car maintenance, home insurance, "entertainment", health insurance, taxes, etc. I did a back of my hand calculation and what you listed above, would only account for $3140 of your $5000/month income. If you included the missing items, you may be a good candidate for Chapter 7 so long as you wait until the 8 years has passed since you filed your last Chapter 7.

[LadyInTheRed]

You say you are paying less than minimum on your debt. If you are going to file BK, I suggest you stop paying dischargeable debt all together and start saving for attorney fees. They are unlikely to sue you, get a judgement and start a garnishment before June. Is June 8 years from the filing date of your last BK? That's the important date.

Are you over or under $60K a year? Median income for a 3 person household in NC is $56,782. If you are above that, don't worry. You very well may still pass the means test.

You can read about NC bankruptcy exemptions at http://www.nolo.com/legal-encycloped...xemptions.html. You have a $35,000 homestead exemption. If both you and your wife file and both your names are on the deed, you can double that. You might want to get a realtor to give you an estimate of value to make sure you don't exceed the exemption. You and your wife can each exempt $3,500 in equity in a motor vehicle, again you must each have your name on title of the car you will exempt.

[dagz]

The townhome is on both of our names. The cars are both on my name only but no equity in either one. (we need to keep them) I'm worried about a Home Warehouse Synchrony bank card because I had to replace floor in part of my house and charged $5000.00 to it in the middle of December. I may be a little over $60k. Thanks or all the help!

[LadyInTheRed]

If you have no equity in the cars, you can keep them as long as you keep payments current.

The $5,000 December charge is very unlikely to be an issue. The creditor would have to prove that you incurred the debt with no intent to pay it. Even in the unlikely event that the filed a complaint to determine that the debt is not discharge AND they one, the consequence is that that one debt would not be discharged.

It doesn't sound to me like you have much to worry about. If you liked the bankruptcy attorney you used before, make an appointment with him/her for a consultation.

[Drazil65]

Hi, you should be good for a chapter 7 in NC from the sounds of it. I do have to comment on a couple of things though but please take this as honest suggestions to help you in the future. Your willingness to take suggestions and take a financial inventory and/or adjust the things that you can is very telling of your general attitude about filing and whether or not you will most likely or not be able to right the sinking ship in the future (or want to).

The amount of money you pay for each car is ridicules, hands down you need to get cheaper cars. No excuse for you or your wife to have to drive anything that has that kind of payment being that you have a limited amount of money to live on. Maybe you rolled over a previous negative equity into a new car payment but you need to work those payments out and reduce them.

Also, wife needs to work, at least part time. You have step child in school full time and even if she helps your mother then a job at night when you are home is warranted, you cannot continue to live on your salary and acquire that kind of debt, have cars that cost over a thousand a month, cable and internet that costs $150 a month or you will be right back here for the 3rd time in 8 yrs. You need more income, a lifestyle change (no more credit card use), a savings/emergency fund and an attitude change.

Should you lose your job (and it happens) or have a medical issue, you will be in hell with no way out this time once you file again, take a real look at your attitude and leave the excuses at the door. Health insurance and child support is your reality and you and your wife will need to do what you need to do at all cost to right the ship (reducing your payments and bringing in more income). Filing bankruptcy is more about adjusting your lifestyle and learning from your past mistakes than it is about wiping out your debt. You will never get that "fresh start" you talk about with out the adjustments, you just wont.

[dagz]

Hi, you should be good for a chapter 7 in NC from the sounds of it. I do have to comment on a couple of things though but please take this as honest suggestions to help you in the future. Your willingness to take suggestions and take a financial inventory and/or adjust the things that you can is very telling of your general attitude about filing and whether or not you will most likely or not be able to right the sinking ship in the future (or want to).

The amount of money you pay for each car is ridicules, hands down you need to get cheaper cars. No excuse for you or your wife to have to drive anything that has that kind of payment being that you have a limited amount of money to live on. Maybe you rolled over a previous negative equity into a new car payment but you need to work those payments out and reduce them.

Also, wife needs to work, at least part time. You have step child in school full time and even if she helps your mother then a job at night when you are home is warranted, you cannot continue to live on your salary and acquire that kind of debt, have cars that cost over a thousand a month, cable and internet that costs $150 a month or you will be right back here for the 3rd time in 8 yrs. You need more income, a lifestyle change (no more credit card use), a savings/emergency fund and an attitude change.

Should you lose your job (and it happens) or have a medical issue, you will be in hell with no way out this time once you file again, take a real look at your attitude and leave the excuses at the door. Health insurance and child support is your reality and you and your wife will need to do what you need to do at all cost to right the ship (reducing your payments and bringing in more income). Filing bankruptcy is more about adjusting your lifestyle and learning from your past mistakes than it is about wiping out your debt. You will never get that "fresh start" you talk about with out the adjustments, you just wont.

I do appreciate your suggestions...I do have a spending problem...

[TXskyblue]

Filing bankruptcy is more about adjusting your lifestyle and learning from your past mistakes than it is about wiping out your debt. You will never get that "fresh start" you talk about with out the adjustments, you just wont.

Your whole post was excellent, but I thought this bears repeating because you said it so well.

[LadyInTheRed]

Drazil65 gave excellent advice. Cutting yor spending is essential to a fresh start. One word of caution: If you are going to file BK, don't do anything to lower the car payments before filing without first consulting with an attorney to make sure that the lower payments won't prevent you from passing the means test.

[rustymich]

Could you sell the cars and get cheaper paid for cars to get around till its cleaned up,1200 month in car payments might help you out....

[dagz]

I have received a 2 notes from mail delivery person for certified mail from Synchrony bank to be picked it up at post office. I'm afraid they are suing me already!

[LadyInTheRed]

I have received a 2 notes from mail delivery person for certified mail from Synchrony bank to be picked it up at post office. I'm afraid they are suing me already!

Don't panic. You don't know that it is a lawsuit. It could be a threatening letter. Even if it is a lawsuit, it is not the end of the world. Even if they get a judgement before you can file BK, the judgement can be vacated after the debt is discharged.

Have you talked to your BK attorney yet? If you do get served with a lawsuit, that may be a good time to make an appointment.