I am new and totally lost and scared

[robin5kids]

I don't know where to start. We have 5 kids. My dh is a teacher and the district has had a raise freeze for 4 years now. We have not used or ccs for over 2 years now, and have not been paying on them. I am so ashamed! So these cc are not being collected on from the original people we had a card with. They have been sold to collections. Well we have no idea who is trying to collect what.
Is there a way to find this out? I know they send papers, but how will we know we have all of the collectors info? Would it be on our credit report?

Second question- How do we know which to file? Chapter7 or 13? We own a house, and want to keep it, but are behind on paments. We own two very old cars, one of which we still owe money on. (It is not worth what we owe, but we need it to transport 5 kids.)

We are sooo sad all the time. I feel like the whole world knows we don't pay our bills. I have dreams of going to jail. I am so afraid of what my parents are going to say. Here I am 35 years old, with 5 kids and I can't even pay my bills on time. I am glad i found this place, where I can be honest.

[lisac77]

I'm so sorry you are going through such a hard time. Things are going to be OK, though (something I have to keep in mind on a daily basis).

I grew up in a family with 5 kids and little income, and I know how hard it is to pay for everything all those kids need. The good thing is that you have not been using your credit cards... that's step 1 in this whole process, and you're already there.

We haven't filed yet (we're still in the decision making process) but from what you've written here I can share some of what I've learned.

Since you're already behind on the house payments and you want to keep that house, that puts you in chapter 13 territory. However, I'm concerned about you keeping a house and cars that you are having trouble paying for even though you don't pay your credit cards anymore (not a criticism, just an observation). That says to me that perhaps you are still living beyond your means, which will need to change.

Now if you are willing and able to find cheaper housing arrangements, chapter 7 may be better for you. You will have to meet the income requirements, but with a family of 7 that shouldn't be too difficult. Chapter 7 may be a better fit for you financially, allowing you to rebuild faster... but you would have to consider giving up the house.

You can find out who your creditors are by viewing your credit reports.

It really is going to be OK. So many of us here are in similar circumstances. I hope you find the information that you need. Best of luck to you.

[lrprn]

Welcome to BK Forum, robin5kids. We're glad you found us!

I don't know where to start. We have 5 kids. My dh is a teacher and the district has had a raise freeze for 4 years now. We have not used or ccs for over 2 years now, and have not been paying on them. I am so ashamed! So these cc are not being collected on from the original people we had a card with. They have been sold to collections. Well we have no idea who is trying to collect what.
Is there a way to find this out? I know they send papers, but how will we know we have all of the collectors info? Would it be on our credit report?

One way to start sorting out who owns what is to ask for your once-a-year free copy of your credit report from all three credit agencies - https://www.annualcreditreport.com/cra/index.jsp or call toll free 1-877-322-8228. Many, if not all, of your creditors (first creditor plus the collection agencies they sold your account to) will be listed there.

Second question- How do we know which to file? Chapter7 or 13? We own a house, and want to keep it, but are behind on paments. We own two very old cars, one of which we still owe money on. (It is not worth what we owe, but we need it to transport 5 kids.)

Sounds like it's time to make 3-4 free consultation appointments with experienced bankruptcy lawyers in your area. This will help you sort out what's best in your situation. As far as which chapter you file, that is decided first by whether your joint income falls above or below the median income for a 7-person family in your state. Which state do you live in, robin?

We are sooo sad all the time. I feel like the whole world knows we don't pay our bills. I have dreams of going to jail. I am so afraid of what my parents are going to say. Here I am 35 years old, with 5 kids and I can't even pay my bills on time. I am glad i found this place, where I can be honest.

When people say debtor's prison doesn't exist any longer, they obviously have no idea about the emotional toll not being able to pay your bills month after month has on many people. Don't let your shame overwhelm you. You are making a first step by posting here. Spend some time searching the forums and reading the posts - you will find that many good people sometimes don't make the best financial decisions or have things happen in their lives that are beyond their control and force them to the financial brink. You are not alone! Come talk with us anytime - we understand what you are going through and want to help you if we can.

As Lisa77 has already said, now is the time to take a hard look at your finances and figure out how to live within what you make. It's hard and sometimes hard decisions have to made. Dragging around a house, cars...whatever is keeping you from having money left at the end of the month isn't likely to get better over time - many bankruptcy lawyers say they wish their clients had come to them long before they fell off the financial edge because they could have relieved months, even years of stress and worry. Talk to several experienced bk lawyers and see where you stand - things will much clearer after that and hopefully you'll know the right thing to do for your family in the long run.

[ChainSmokin]