to file or not to file....advice needed

[optimist]

My wife and I had a rough year last year, a series of unfortunate events including loosing 50K cash in a Florida real estate deal have left us 6+ months behind in our primary mortgage residence (In forclosure, NY takes roughly 18 months). owe 545K and the house is worth roughly 550. We also have 50K in cc debt, which are also way behind 4+ months. Owe the IRS 24K (can;t be included in bk). Have 350K in student loans (yeah I'm freakin smart, but broke), which can't be included in bk, I don't think. I make 200K+ per year, but after taxes, have a lot less than that. We also have a business, which was draining a lot of our money (yes it was loosing money), which we are trying to sell (potential 50K to 150K), but business has to be sold with the house (I'd give it a 20percent chance of sale) and probably 6-9 months to sell. I've been told by two attorneys to go bk and that I could probably qualify for ch 7 (I don't know how with the income). My credit score is 400+ (from 700+ last March).

I think we could pull out of this within 3-5 years of living gp and renting or lease optioning so here are my choices as I see them.

1. I could tough it out and negotiate with my creditors to bring down interest rates and decrease amt owed and try to pay them off. Rent for a year and improve my credit. Then buy a new house.

or

2. Give up and go bk (ch 7 assuming I qualify).

I'm afraid of the consequences of my filing bk for the rest of my life. Maybe they're not as bad as I fear. That is why I request your feedback on my situation.

Sorry about the long post and for not proofreading.

Thanks.

-Rob

[325Falcon]

I dont see how you could do a 7 with that income unless of course your a family of 50.

[optimist]

I have a family of 5...maybe the lawyer was taking into account the business losses? Can they do that?

If i have to go ch 13, dos'nt that mean you still pay your bills back with the negative of the bk still on your credit for 7 yrs?

[tallberry]

I am only over the median income in FL by $2000 and I am attempting a Ch7 with no guarantees. I can't see how you could make it work when you make the kind of money you do.

[car67]

Most definite will be chapt 13
If they let you file 7 someone is committing fraud

[cool33097]

I don't know much, but if when they put creditor vs debitor and if you are negative, you will qualify for chapter 7. How would you be able to pay for a 13 if you are negative?

[ssdsco]

The attorney's are probably talking about a business chapter 7 where I don't believe the means test comes into play.

Can you sell the house and business and pay off the credit cards ? In a month or two you'll start getting offers from the credit card companies to settle the debt for 30-60 cents on the dollar.

[optimist]

The atty's mentioned a means test and seemed like they believed that I could qualify (no guarantees).

ssdsco- I am trying to sell the house, spoke with the primary leinholder today and due to attys fees I am now upside down about 40K in the house, the primary agreed to a short sale and I need to hear back from the 2nd. It is possible to sell the business, but it is a long shot. I plan to call all the cc companies tomorrow and try to negotiate the debt down to 30-60 cents.

My fear is that I'll try like crazy to keep up with payments and throw money away paying the high interest 20%+ credit cards and then in a month or two realize that I can't do it and go bk anyway.

Re: cool- I think that's how the atty believes I can qualify...2100 month student loan payment...1300 IRS payment

PLUS I'm too broke to go bk....the first atty wanted 2500 and the second (who seemed more organized) wanted 3000 for their fee.

Thanks for the replies everyone, I value your input.

[ssdsco]

I plan to call all the cc companies tomorrow and try to negotiate the debt down to 30-60 cents.


PLUS I'm too broke to go bk....the first atty wanted 2500 and the second (who seemed more organized) wanted 3000 for their fee.

The 30-60 cent deals require a lump sum payment or repayment over 3-6 months from my experience. Sounds like you may not have the bucks for that. "Treehugger1" has a lot of info in his posts on negotiation with creditors.

[optimist]

thanks...