Alot of people are surrendering their houses...

[Brookamy]

Is that common in BK? It expected? I'm hoping to file chapter 7 but I'm not sure if I'll be accepted so I may end up with 13. I don't have much equity in my house with the market not being the greatest. I've owned the house for two years and am current on the mortgage.

Do I walk away from the house?


My situation:
I make $2600.00 a month.

Basic Bills:
1220.00 mortgage
400.00 car
16.00 life insurance
220.00 daycare
120.00 school loan
50.00 college fund for daughter
50.00 sewer, water, garbage
70.00 car insurance
90.00 electricity
100.00 cable/internet
90.00 natural gas
200.00 gas
250.00 groceries
EQUALS: $2934.00

Credit Bards/Unsecured Loan (per month, minimum payments):
$479.00 Bank of America
$200.00 US Bank
$200.00 Discover
$25.00 Chase
$30.00 Sears
$10.00 Maurices
$50.00 Old Navy
$50.00 Home Depot
EQUALS: $1314.00

So I owe $4248.00 per month and make $2600.00.

I do get expense checks for milage claims from work which help ($500 a month or so). My husband brings home around $2000.00 a month. He also has a side job that pays him cash...he makes between 5-8 hundred a month doing that) He has a truck payment of $425.00. His own truck insurance, a couple of loans, our cell phone bill, his own credit card debt (maybe $2,000) and pays atleast $400.00 a month in gas.

[lrprn]

Is that common in BK? It expected?

Whether it's best to surrender your home or keep it depends on your financial situation. If you are working with lawyer, he/she can advise you whether keeping your home is best in your situation or not.

I've owned the house for two years and am current on the mortgage.

Stay current on your mortgage until you know whether keeping your house is best in your situation. You must be current on your mortgage to file Ch 7 and keep your house.

My situation:
I make $2600.00 a month.
Assets, utilities, etc. EQUALS: $2934.00
Credit Bards/Unsecured Loan (per month, minimum payments):
EQUALS: $1314.00

So I owe $4248.00 per month and make $2600.00.

Here's your first problem - the credit cards and unsecured loan are going away if you file Ch 7, but with the income you've listed here, you still don't make enough to cover your basic expenses if you keep your house. If you are married, did you count whatever your spouse makes that is contributed toward the household upkeep into your income total?

I do get expense checks for milage claims from work which help ($500 a month or so).

This counts as income. Is this added into your income above? If it isn't, then you need to add it in. That will help make up the shortfall if you are able to file Ch 7.

My husband brings home around $2000.00 a month. He also has a side job that pays him cash...he makes between 5-8 hundred a month doing that) He has a truck payment of $425.00. His own truck insurance, a couple of loans, our cell phone bill, his own credit card debt (maybe $2,000) and pays atleast $400.00 a month in gas.

If you are filing alone, then you have to count whatever your husband contributes toward running the household into your income total. However, if he does not file with you, then you need to take a close look at all your debts that he co-owns or is listed as a co-signer for. If you file on those debts (no matter what they are), the creditors can come after your husband for the full amount.

How much shared debt do you have between the two of you? Are you planning to file alone or are both of you filing together at the same time?

[epiphany]

Hi lrprn. We just had a discussion about the mileage checks in another thread. Mileage checks are reimbusements, not income, and they are supposed to cover gas, maintenance and depreciation of one's personal vehicle. One would only have to claim it as income if one was also claiming the full cost of gas (both business and personal) and the full cost of maintenance (both business and personal) as an expense.
ep

[lrprn]

Hi lrprn. We just had a discussion about the mileage checks in another thread. Mileage checks are reimbusements, not income, and they are supposed to cover gas, maintenance and depreciation of one's personal vehicle. One would only have to claim it as income if one was also claiming the full cost of gas (both business and personal) and the full cost of maintenance (both business and personal) as an expense.
ep

Thanks, epi - I should have been more clear.

Whether mileage reimbursements are counted as income or not depends on whether you want to count the entire allowed car expenses amount or want to deduct the mileage reimbursement. If the employer adds the reimbursement into the regular paycheck that can create some confusion, but that doesn't appear to be the case for Brooksamy.

Brooksamy should do whichever option works out in her favor. I'm sure her lawyer will help her sort out what that is, especially given that she's close to the median.

[Stilltheone]

We noticed at our 341 that every single person, besides us, gave up or had already given up their home. It's sad, really...

I think it's a personal decision for everyone and, for us, we wanted to keep our home....not just a house, but our home. Throughout our struggles with paying our bills, our motto has always been "our mortgage will ALWAYS be paid"...

[JRScott]

This is really a personal decision.

Your house is only 26.5% of the total household income, which actually is fairly reasonable. (Of your income it is almost 50% of your personal income and that is to high which is probably what has led you to this situation, but with the marriage and thus higher total income it is very reasonable.)

Your vehicles combined are 17.93% of total household income, slightly higher than suggested by some economist. However before considering trading them in or anything you need to figure out if its worth it if you have to spend more on gas/car maintenance/insurance.

At this point it appears you've kept your finances separate which should help in the bankruptcy, but as lrprn says you need to include in your petition how much your spouse contributes to household expenses.

I'm surprised your food is so low though for a family of 3. I spend between 160 and 180 dollars on a family of 1.

Some of your expenses might not meet local expectations such as daycare and cable/internet, a local lawyer can help you there.

After I filed bankruptcy I was introduced to a nice program I enjoyed taking. It's called Financial Peace University. It is written/produced by Dave Ramsey. His website is daveramsey.com. If you have budgeting concerns it is a nice program to switch how you think about things, including lessons on budgeting and planning. It does cost a little bit of money, it is generally cheaper if you find lessons offered through a church or other charity in your area.

[keepmine]

I'd agree with the others that your house does seem affordable once, all the cc debt is gone and, your husband is contributing to the mortgage payments.
The only caution I'd have is, do you have a reasonable fixed rate mortgage? You don't want something that will adjust sharply higher in a few years.

[JRScott]

That's a good point keepmine, Amy is your mortgage a fixed mortgage or an ARM?

[Brookamy]

Okay...to answer a few questions....

*my mortgage is fixed at 6% for 30 years.

*my husband is not on any of my debt and we don't have any debt together (we just got married on 5-31-08). he just sold his own house two months ago.

*i get a separate mileage check once a month...it is not included in my paychecks.

*my daycare is only $220 a month because my ex husband pays the other half. once my daughter is in kindergarten, that will drop to me paying only $75.00 a month.

*my husband makes a little over $2000.00 a month with his full time. he also works part time for cash and can make up to $800 a month.

[AngelinaCatHub]

Okay...to answer a few questions....


he also works part time for cash and can make up to $800 a month.

I'd keep this to yourself. If he is not declairing it on your income taxes. Just DON'T mention it. You will be dealing with a Federal Trustee in the future and under Federal rules. Only my opinion. 'Hub

[Brookamy]

Hub....I wasn't planning on mentioning it...it's not a steady job and we can't really rely on it to be there all the time. I don't want to break the rules but....

[keepmine]

If the mortgage payments are affordable, absolutely keep the house. That's a great rate in this environment.
And, if you're running your husbands pt job incomethrough your bank account, you need to ley your lawyer know. That could be a paper trail that'll trip you up.

[Brookamy]

He does give me cash sometimes that I put in my checking account...so he should be keeping it in his then huh?

I'll let the lawyer know. I don't want something to bite me in the ass later!

[AngelinaCatHub]

Hub....I wasn't planning on mentioning it...it's not a steady job and we can't really rely on it to be there all the time. I don't want to break the rules but....

Hey, don't think I would not do this. I earned it and in my opinion, the politicians have a confiscatory tax scheme anyway. I make it, I earned it, I spend it, I'm not paying the guy under the bridge holding the sign a damned thing. Just wanted to pass some info as some others have. If cash, purchase things you need. Keep it to yourself. 'Hub

P. S. Ms.Cat says: Cash? Stick it under your matress and 'shut up', but don't tell her I quoted her. We are following you in your quest. That means....we care.

[Brookamy]

We are following you in your quest. That means....we care.

That means a lot guys.