I haven't been on the site for a while, because there was nothing new to report. I wanted to come back and give an update on our situation and get some advice.
Our situation, in a nutshell:
Purchased a business in 2004. It never made money. Then DH was shot in an armed robbery last November. It was at that point that we decided to look into bankruptcy. I wanted to file right away for a number of reasons, but we had some obstacles (savings accounts that had to be spent, and two bonuses coming in this year from my job). The banks that own our business loans have been very accomodating and we are finalizing a recast program with them now. We will still have to pay the regular payments starting next month. Our chance to file before my large bonus comes in has passed. I get ownership of the rights on March 31, and will get the money April 15. I already received my yearly bonus on February 28.
Now that the bonuses have come in, we will have to wait several months to file for bankruptcy. When we spoke to the lawyers last year they all told us that waiting was a definite choice, but the money would have to be spent long before we filed if it came to that. Well... it's come to that.
As frustrated as I am with my husband's denial over this situation, there's little I can do about it now. I know that he wanted a chance to try and sell the store, but I think he's realized that is just not going to happen. Unfortunately his denial pushed us past the point of no return with the money that needs to be spent, so here we are, with bankruptcy several months away.
Now on to the questions:
We live in TX, a very debtor friendly state, and we've been in our house for 4 years, so we get to keep all the equity in the house under the homestead exemption. We currently have two mortgages (we originally financed the house under an 80/15/5 schema). We want to pay off the second mortgage with the bonus money I'm getting at the end of the month. Our lawyer was leery of us dumping cash into the home equity right before we filed bankruptcy, but now we're going to wait 7-8 months to file (or longer, depending on the legal situation). Does anyone think this will cause complications with our case? I don't want to jeopardize our case any further. The upside to paying off the 2nd mortgage is that it puts $200 back into the budget every month.
What about credit cards? The sad reality is that we need to use them to stay afloat as long as DH is working at the business. Should we use them up to a certain point and then stop paying the minimums? I see so many conflicting reports on this... the lawyers we spoke with were very lassiez-faire about the whole situation, and just said that we should only worry about charges that were incurred during the 90 day window. Well, the 90 day window is a long way off. I'm not talking about going on a shopping spree here, just basic necessities. And yes, some of the bonus money will be going to basic necessities. The charges wouldn't even be that much, only about $300 per month or so.
Now that we have time to plan for this I really, really want to do it right and make things as easy as possible. Any help would be appreciated.
Our situation, in a nutshell:
Purchased a business in 2004. It never made money. Then DH was shot in an armed robbery last November. It was at that point that we decided to look into bankruptcy. I wanted to file right away for a number of reasons, but we had some obstacles (savings accounts that had to be spent, and two bonuses coming in this year from my job). The banks that own our business loans have been very accomodating and we are finalizing a recast program with them now. We will still have to pay the regular payments starting next month. Our chance to file before my large bonus comes in has passed. I get ownership of the rights on March 31, and will get the money April 15. I already received my yearly bonus on February 28.
Now that the bonuses have come in, we will have to wait several months to file for bankruptcy. When we spoke to the lawyers last year they all told us that waiting was a definite choice, but the money would have to be spent long before we filed if it came to that. Well... it's come to that.
As frustrated as I am with my husband's denial over this situation, there's little I can do about it now. I know that he wanted a chance to try and sell the store, but I think he's realized that is just not going to happen. Unfortunately his denial pushed us past the point of no return with the money that needs to be spent, so here we are, with bankruptcy several months away.
Now on to the questions:
We live in TX, a very debtor friendly state, and we've been in our house for 4 years, so we get to keep all the equity in the house under the homestead exemption. We currently have two mortgages (we originally financed the house under an 80/15/5 schema). We want to pay off the second mortgage with the bonus money I'm getting at the end of the month. Our lawyer was leery of us dumping cash into the home equity right before we filed bankruptcy, but now we're going to wait 7-8 months to file (or longer, depending on the legal situation). Does anyone think this will cause complications with our case? I don't want to jeopardize our case any further. The upside to paying off the 2nd mortgage is that it puts $200 back into the budget every month.
What about credit cards? The sad reality is that we need to use them to stay afloat as long as DH is working at the business. Should we use them up to a certain point and then stop paying the minimums? I see so many conflicting reports on this... the lawyers we spoke with were very lassiez-faire about the whole situation, and just said that we should only worry about charges that were incurred during the 90 day window. Well, the 90 day window is a long way off. I'm not talking about going on a shopping spree here, just basic necessities. And yes, some of the bonus money will be going to basic necessities. The charges wouldn't even be that much, only about $300 per month or so.
Now that we have time to plan for this I really, really want to do it right and make things as easy as possible. Any help would be appreciated.
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