Collections and time.....

[chriskfromsc]

I posted this in the CH-13 forum but wanted a little more info from you guys. First of all I am a decently high income earner (>125k) but have a lot of debt including a second home (with 2nd mortgage that is worth less than the first mortage) that I could care less about. I am in the middle of a divorce and have filed for legal separation which establishes alimony and child support. Long story short, I can no longer afford to pay all my bills with the alimony and child support.

So on to my questions: I have already stopped paying on all unsecured debts and any secured debts that I don't care about. (Car, mortage and boat are being kept current since I want to keep them). A second car of mine and the 2nd house I haven't paid on in a couple of months. I have already been getting collections calls but never answer them. I would like to hold off on filing Chapter 13 as long as possible to avoid the inevitable high payment that will come with it.

How long do I have before some of these collections start trying to become lawsuits?
Are there any pitfalls to allowing my 2nd house to be foreclosed upon and my secured property repossessed as far as future bankruptcy goes?
Are there any other concerns I should be thinking about?

[keepsmiling]

Just a rough guess--- 6 months til a lawsuit. Purely a guess. Some have been sued in as little as 3, and for some it took years. You probably seem like low hanging fruit with your income, I'd hazard sooner rather than later.

You really want to schedule a few free consults with bk attorneys and get a feel for where you stand. No real reason to wait, the sooner you file the sooner it will all be over.
Some of us wait because we need income to drop off or income to increase. You don't seem to be in either of those positions so no reason to drag it out.

In fact, it is possible you could qualify for a 7--- income alone is not the sole determining factor. We can bang that possibility around if you give us lots more info

As to foreclosure... well you just don't know. It could drag on for months or years. In many cases the banks are not so eager to add to their inventory. Really it all depends.
A lot also depends on laws of your state. SC may be one of those states that doesn't allow garnishment. If that's the case you have a little more time.

[GoingDown]

Yes, with a high income like that you might as well ring the dinner bell for creditors.

Definitely go see some bankruptcy attorneys right away and start reading all you can in this forum about Chapter 13 bankruptcy, and get all your ducks lined up in a row, so to speak. Get everything ready so you can file bankruptcy as soon as one of them files a lawsuit against you.

Now is your time to learn and educate yourself as much as possible so you can avoid the errors and pitfalls along the way.

There is a huge amount of information and experience on this forum and you have months and months of time to read it and figure out what will be best for your situation.

P.S.-- EDIT--- Oh wait! I stand corrected, look at what I found....


"In South Carolina, judgment creditors of consumer debt cannot garnish your wages. But some other types of creditors can garnish your paycheck."

http://www.nolo.com/legal-encyclopedia/south-carolina-wage-garnishment-laws.html

If that's true, and they can't garnish your wages, then you have options.

If you don't care about getting judgments against you, and if your home has very little or no equity (or if you rent a home), and if you don't mind using cash and money orders and pre-paid debit cards to pay for everything, and closing your checking account, etc., so creditors can't get at your money... in other words, if you want to live the judgment proof life, which is not easy, then you might have that as an option.

Most people are better off filing bankruptcy, but if you are one of the ones who find the judgment proof lifestyle appealing, then read up on it.

[jacko]

What ever you decide to do, you need to be realistic about your life style choices going forward. Warning bells such as keeping the car, house and boat will keep you in indenture servitude.

I posted this in the CH-13 forum but wanted a little more info from you guys. First of all I am a decently high income earner (>125k) but have a lot of debt including a second home (with 2nd mortgage that is worth less than the first mortage) that I could care less about. I am in the middle of a divorce and have filed for legal separation which establishes alimony and child support. Long story short, I can no longer afford to pay all my bills with the alimony and child support.

So on to my questions: I have already stopped paying on all unsecured debts and any secured debts that I don't care about. (Car, mortage and boat are being kept current since I want to keep them). A second car of mine and the 2nd house I haven't paid on in a couple of months. I have already been getting collections calls but never answer them. I would like to hold off on filing Chapter 13 as long as possible to avoid the inevitable high payment that will come with it.

How long do I have before some of these collections start trying to become lawsuits?
Are there any pitfalls to allowing my 2nd house to be foreclosed upon and my secured property repossessed as far as future bankruptcy goes?
Are there any other concerns I should be thinking about?

[GoingDown]

Whatever you decide to do, you need to be realistic about your lifestyle choices going forward. Warning bells such as keeping the car, house and boat will keep you in indentured servitude.

Yes, this is true. You need to let go of anything you cannot afford. Get your living expenses down to a level that you can actually afford.