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**ShouldWeFile** · 02-23-2009, 05:36 PM

Originally posted by HipHop View Post

The way I am going, I'm going to remain in debt for quite some time. Is there any way I can qualify for Ch7?

Not unless you loose your job or take a big pay cut...

Your situation is rough. How did you manage to get $120k in unsecured debt anyways?

And as far as I now the 401k loan will have to be repaid or there will be additional tax liabilities and no tax liabilities are discharged in ay BK.

**HipHop** · 02-23-2009, 05:40 PM

Originally posted by ShouldWeFile View Post

Not unless you loose your job or take a big pay cut...

Your situation is rough. How did you manage to get $120k in unsecured debt anyways?

And as far as I now the 401k loan will have to be repaid or there will be additional tax liabilities and no tax liabilities are discharged in ay BK.

Who knows...I remember having $15,000 in credit before my 19th birthday. No way I should have ever been able to obtain that much of a credit line. It is spread out across 8 CCs.

So what options do I have? Do I go to a credit conseling service and see what they can do? It all just seems so overwhelming to deal with.

**AngelinaCatHub** · 02-23-2009, 05:54 PM

The first thing you need to do is adjust your spending habits. Stop using any credit cards. And adjust yourself to a cash only life style. Next if you stop paying your cards get a bk lawyer with those saved payments.

That being said, your biggest problem is your age, and lack of dependants. In any case, 7 is best but you may have to go 13. Think back and become realistic. You have trained yourself to live above your means. Now it is time to become more realistic. I wish you good fortune. ‘Hub

**HipHop** · 02-23-2009, 05:56 PM

Do you think Chapter 13 is a better option than going through a non-profit credit counseling services?

**deadbroke99** · 02-23-2009, 05:57 PM

Maybe you should adopt a couple kids...LOL

Just kidding!!!

**Trixie007** · 02-23-2009, 05:58 PM

Generally we don't question people on how they got into so much debt in the first place.... We're all in the same boat! That is a tough situation. From the looks of your income, you probably wouldn't fit into a Ch7, but anyone can file a 13. Even if your income put you at a 100% payback, it still knocks out a lot of the interest that they would continue to charge you, so you can end up way ahead. For that amount of cc debt, I would definitely recommend that you start getting some free consults, and find the best attorney who can help you get into a 13 that is to your benefit.

-IMHO, Ch 13 is way better than the credit counseling, since those are mostly scams!

**kornellred** · 02-23-2009, 06:05 PM

If your numbers are correct, Chapter 7 is out of the question. You earn way too much money. Chapter 13 is going to be pretty rough on you as well if your expenses are that low.
There are things you can do to increase your living expenses, but doing them with the obvious intention of decreasing your disposable income won't earn you any points with the trustee or the Court.

One of the safest and legal ways of decreasing your disposable income would be to take a maximum amount out of your 401K as a loan and using the money to pay down some of your unsecured cc debt. Then, you will at least be paying yourself back some of the money during the Chapter 13. 401 K loan payments are legitimate expenses in a Chapter 13 that decrease disposable income. I know because I am in Chapter 13 and I have 401 K loans.

One thing is virtually certain - you will never get out from under the unsecured debt without bankruptcy protection. Good luck......

**AngelinaCatHub** · 02-23-2009, 06:09 PM

Originally posted by Trixie007 View Post

Generally we don't question people on how they got into so much debt in the first place.... We're all in the same boat! That is a tough situation. From the looks of your income, you probably wouldn't fit into a Ch7, but anyone can file a 13. Even if your income put you at a 100% payback, it still knocks out a lot of the interest that they would continue to charge you, so you can end up way ahead. For that amount of cc debt, I would definitely recommend that you start getting some free consults, and find the best attorney who can help you get into a 13 that is to your benefit.

-IMHO, Ch 13 is way better than the credit counseling, since those are mostly scams!

**fltoo** · 02-23-2009, 06:36 PM

At first glance, it looks like you make a lot of money, but, let's face it, you are one of the unfortunate approaching the 50% tax bracket, paying the bulk of income tax.

If you decide to settle the debt, do it yourself, those counseling agencies are rip offs.

Sounds like you should consult a lawyer and go with a chapter 13. With so little money leftover after taxes and expenses, the payment should not be that bad.

Don't touch your retirement money as it probably is exempt.

Get in the 13 program, try to put money away in savings. You are young enough that you will recover quickly.

Don't worry about how you got in debt, just learn from it and don't do it again. Best of luck.

**fltoo** · 02-23-2009, 06:39 PM

Originally posted by kornellred View Post

If your numbers are correct, Chapter 7 is out of the question. You earn way too much money. Chapter 13 is going to be pretty rough on you as well if your expenses are that low.
There are things you can do to increase your living expenses, but doing them with the obvious intention of decreasing your disposable income won't earn you any points with the trustee or the Court.

One of the safest and legal ways of decreasing your disposable income would be to take a maximum amount out of your 401K as a loan and using the money to pay down some of your unsecured cc debt. Then, you will at least be paying yourself back some of the money during the Chapter 13. 401 K loan payments are legitimate expenses in a Chapter 13 that decrease disposable income. I know because I am in Chapter 13 and I have 401 K loans.

One thing is virtually certain - you will never get out from under the unsecured debt without bankruptcy protection. Good luck......

The guy makes 4000. a month. How is that "way too much money".

OP, consult with a lawyer before you do anything with the retirement funds.

**krielly** · 02-24-2009, 04:57 AM

whoops, posted in the wrong spot, and can't figure out how to delete now.

**Trixie007** · 02-24-2009, 05:58 AM

Originally posted by fltoo View Post

The guy makes 4000. a month. How is that "way too much money".

That's his net - his gross is $7,000/mo for a household of one.

**fltoo** · 02-24-2009, 06:03 AM

Yes, and after he deducts his tax "expense", he makes 4000 a month.

**HipHop** · 03-13-2009, 10:52 AM

Thanks all for the responses. I still have a few more questions. I did meet with a lawyer and he said Chapter 13 is really the only way to go to take care of my situation.

Here are some current (more accurate) numbers for me:

Gross - $6994
Net - $4200 (after taxes, 401K loan ($5400 balance), healthcare/dental/vision)

Tax Debt - $8500
Unsecured Debt - $116,707 ($1200 is on a Best Buy card...I've heard that Best Buy cards are handled differently, is this true?)

Auto Loan - $650 ($15,500 owed, value around $9,000)
Rent - $750
Parking - $150
Cell - $50
Utilities - $400
Food/Clothing - $500
Misc (Dry Cleaning, Healthclub, etc) - $100
Gas - $200
IRS Taxes - $141 ($8500/60 months, is this correct?)

I know there are more detailed expenses that I should be able to list out right?

With what I have listed above, I calculate my DMI to be $1259. Take the 10% truetee's fee out of that and you get $1134.

Am I doing this math correctly, that I would probably be in a 5-year plan (based on my income) and have $1134 deducted from my paychecks? Making my repayment plan at $68,040 over 60 months?

Am I missing anything, or doing anything wrong?

Another question is about my vehicle. I'm in the process of trading it in because it's on it's last leg and needing expensive repairs. I want to get something new as suggested by a handful of people so that it will last me the 5 years of the plan and beyond. If my auto loan went up from $665 to $750, what are my options in the Chapter 13? I am planning on trading in my current auto for a 2009 CTS. Before you all beat me for wanting to do this, I know it's not as practical as getting a honda accord, or something, but it is VERY important for my job that I have a somewhat classy car. I know the stated monthly allowance is $489 for the car payment, so will I need to cover the extra $260 from other areas of my budget/expenses?

Thanks all for taking the time to work with me on my specific situation/questions.

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