What's best for us?

[moneyproblems]

My husband and I are considering filing BK. He left his job 2 years ago for another job, and recently was forced to take an unexpected pay cut due to "downsizing". I'm a grad student with a part time job and make next to nothing.
We are able to pay most of our bills, but there are a few in particular that we can not catch up on, and are out of options. They've trashed our credit to the point that I don't think BK will make much difference. One is a loan that is secured by a motorcycle that we no longer own (it was wrecked and never paid out by the insurance company due to a technicality in the accident). It is with a CU that we no longer bank with. The other is a credit card with our current credit union that is maxed out. There's some other smaller CC accounts that I would like to lump in there too. Total debt to be discharged is about 28,000.00.
So how do we "not include" the bills we can keep paying, and since one of the accounts to be filed on is at our current credit union, could they still take our car (our loan with them for that car is current)? Should we switch banks to avoid them taking what's in our bank account or stopping our debit card? Not that there's anything in our bank account anyway.
Also, can we file ourselves, or is it wise to have an attorney? We can't afford an attorney, unless he/she would let us do a payment plan, so how hard is it to muddle through ourselves?
We are located in Wisconsin, so what can they take from us? We don't really own anything of value except our cars, my wedding ring, our computer and big screen tv.
We've been getting all sorts of threats from creditors and I just want it to end. The woman at our credit union (where the credit card is past due) actually told me that they could take my husband's car (the loan for it is also at the same CU) as cross collateral for the debt. Is that even possible?

So, would chapter 7 or 13 make more sense for our situation?

Also, what happens if after the 341, one (or more) of our creditors object? I'm guessing there is one that will. If they object, does that mean the case is dismissed and we're back at square one?

Sorry- that's a lot of questions, and I'm sure I'll have more, it's just very stressfull- but I'm trying to look at it optimistically- as a way out.

[CATCHMEIFYOUCAN]

Bk Bk Bk

File Bk, depending on you disposable income, after all expenses are accounted for, if you go for a 7 and you have disposable income I think you are forced into a 13. Definitely seek an attorney, these days many have payment options (some go pro-se (they file themselves to save money)). I heard creditors can object, but they need to prove that there was fraud. Stop using the banks you have cc debt with, but don't close your account, open a new one. Credit Unions are notorious for using what they call "cross collateralization," they can take what you have in your checking or savings and apply to the balance you owe on your credit card.

Im not a lawyer, just going throug Bk13 myself, and have read alot of advice, this site is very friendly and won't knock you down how you got into debt in the first place.

Good Luck, Catchmeifyoucan

[CATCHMEIFYOUCAN]

Some Helpful Info

Bankruptcy
Bankruptcy information


Bankruptcy - Occasionally, there are times when people or businesses run into severe financial troubles. When put to paper, it seems as though they cannot manage to continue to make necessary payments on their current income. For many, bankruptcy seems to be the only way out. But bankruptcy should only be the option of last resort.

Credit collections vs. bankruptcy
In such cases, creditors often resort to a variety of collection methods, usually starting with statements and letters that require your response. These letters are generally somewhat threatening and the purpose is to get you to pay their bill. Keep in mind that many creditors lose large sums of money to bankruptcy proceedings and they often want to collect early before you start thinking of bankruptcy as an alternative.

Most creditors will seek to get you to pay the bill until such time that they have run out of non-legal options and then turn it over to a collection agency who promises to ruin your credit or take you to court and seek a judgment against you.

Types of debt
Where the debt is owed on secured property such as real estate or cars, they will often seek to reclaim (or repossess) that property, meaning that you are required to turn the property over to them and your property rights are terminated.

Other debts such as credit card bills, doctor bills, store credits and other similar debts are generally not secured. Though they may not be able to repossess any specific asset, this doesn't stop the creditor from seeking restitution through the court and they may be able to have other assets seized and sold in order to pay the debt.

You are granted many rights as a debtor and one of those rights is to declare bankruptcy. In declaring bankruptcy, you are stating for the court that you don't have the capability to pay your bills with your current income.

Bankruptcy is the last resort
Bankruptcy sounds rather easy at first. Filling out the bankruptcy paperwork and going to court won't cause to many problems as long as the procedures are followed and you have been quite thorough.

In many cases, the relief of the immediate aftermath of filing for bankruptcy can also make your life quite a bit easier. If you have been hounded by collection agencies and merchants, the mere filing of the bankruptcy forms causes them to cease contacting you or any other action that they may be taking against you. In other words, they cannot sue you or take your property once you have filed for bankruptcy. Though secured creditors don't give up their rights indefinitely, they too must stop all action.

Catchmeifyoucan

[lrprn]

So how do we "not include" the bills we can keep paying, and since one of the accounts to be filed on is at our current credit union, could they still take our car (our loan with them for that car is current)? You can't pick and choose which debts you include in bankruptcy - everything has to be listed.

Should we switch banks to avoid them taking what's in our bank account or stopping our debit card? Not that there's anything in our bank account anyway. Personally just to be safe, I would switch banks or credit unions to one that has no connection with any of your family's current debts.

Also, can we file ourselves, or is it wise to have an attorney? Again personally, unless you have a very simple, straightforward case, having an experienced bk lawyer on your side is worth its weight in gold!

We can't afford an attorney, unless he/she would let us do a payment plan, so how hard is it to muddle through ourselves? Typically most bk lawyers want a downpayment. If you file Ch13, the rest is paid through your Ch 13 plan.

We are located in Wisconsin, so what can they take from us? Here's the link to the Wisconsin bankruptcy exemptions - http://www.bankruptcyaction.com/wiexemptions.htm

We don't really own anything of value except our cars, my wedding ring, our computer and big screen tv. Typically unless one of these is worth a considerable sum, it isn't worth a creditor's or the trustee's time to come after these.

We've been getting all sorts of threats from creditors and I just want it to end. The woman at our credit union (where the credit card is past due) actually told me that they could take my husband's car (the loan for it is also at the same CU) as cross collateral for the debt. Is that even possible? Only if you stop making the payments on the car or pay late.
So, would chapter 7 or 13 make more sense for our situation? Impossible to say without knowing more about your specific situation. Most bk lawyers give free consultations - schedule 3-4 in your area and lay out your finances for a knowledgeable opinion about what you should do.
Also, what happens if after the 341, one (or more) of our creditors object? I'm guessing there is one that will. If they object, does that mean the case is dismissed and we're back at square one? No, the objector has to prove to the court that their objection is legitimate.

Hope this helps!

[moneyproblems]

Originally Posted by moneyproblems
So how do we "not include" the bills we can keep paying, and since one of the accounts to be filed on is at our current credit union, could they still take our car (our loan with them for that car is current)? You can't pick and choose which debts you include in bankruptcy - everything has to be listed.

So if there are bills that we can keep paying (and want to keep paying to avoid too much damage to our credit), how do we go about that with bankruptcy?

[SinkingFast]

So if there are bills that we can keep paying (and want to keep paying to avoid too much damage to our credit), how do we go about that with bankruptcy?

If the loan is for your car, then you can reaffirm that loan. Provided, the Court believes the car payment does not impose an undue burden on you financially post BK.

Here's a link for you:

http://www.usdoj.gov/ust/

You can access the list of DOJ authorized Credit Counseling Agencies there. In the BK Reform Box, click on Credit Counseling and Debtor Education. Credit Counseling it the BK Reform Act required pre BK Cert. Debtor Education is the post BK Filing requirement.

You can click on the Means Test to get income info for your State. Since you'll likely be filing after 10/1, select that in the drop down menu.

About your Credit Rating,............. You've got to forget about Credit Rating for the time being and focus on the here and now. Dealing with the issues at hand. Credit Rating you can work on repair and rebuilding later.

[NowOrNever]

Originally Posted by moneyproblems
So how do we "not include" the bills we can keep paying, and since one of the accounts to be filed on is at our current credit union, could they still take our car (our loan with them for that car is current)? You can't pick and choose which debts you include in bankruptcy - everything has to be listed.

What our attorney told us was that we can continue to pay any creditor that we want to, but we have to include them all in the bankruptcy filing. For example, we had a small loan with a local bank that we (and our whole family) have done business with for years. We had to include them in our filing, but wanted to pay off the loan for our peace of mind if nothing else. The balance is just a few hundred. When we filed, DH went in and talked to the bank pres to explain what was going on, and told him that we would continue our payments until the loan was paid in full. The pres was understanding of the situation and said they would not freeze or withdraw funds from the checking account we have with them.

[moneyproblems]

Thanks so much for all of the helpfull answers so far- this seems like it can be quite confusing!
So as far as continuing to pay the creditors that we want to keep paying- what is reafirming? Do we have to do this at our 341, do we have to contact our creditors directly? Do we keep paying them after we file?