What should I do?? BK, Let goto chargeoff etc.. getting bad

[Nick9075]

I have close to $70,000 in credit card debt aquired thru years of overspending as well as being unemployed for 5 months. I finally found a job but it is out of state and they are not giving me any relocation. I am relocating from CT to outside Boston MA.

Anyway, my credit situation has been worsening such that I feel like i am in a state of total capitulation. I am at the 60 day late mark for Chase, 30 days (and counting) for AMEX gold totalling $990 (original balance) + $4950 Optima (original balance).

Outside the above I have about $55,000 in debt that is getting harder & harder to keep current. I have already received those dreaded 'rate increase' amendments to over 28.74% from BOA effective May 1. A sizable portion of the debt is on various retail cards with rates above 20%.

What will happen if I just let everything go and file in June. I will be making well over the limit for one person in the state of MA for chapter 7. How much in a chapter 13 will I be required to repay?? I hear usualy 50%.

I have been spending close to $5,000 a month in the past year and from savings & unemployment after I got laid off just on rent, incidentals, groceries (which are beyond ridiculous here in CT). If I 'stopped' paying, that would free up well over $2,000 a month.
I will be breaking my lease as well and not paying May rent beyond so I guess I will have an eviction and possible judgement on my credit rap sheet as well so BK may be the only option to stop a potential judgement if the Landlord here gets a judgement for the rest of the lease which runs until end of Dec09

[lrprn]

What will happen if I just let everything go and file in June. I will be making well over the limit for one person in the state of MA for chapter 7. How much in a chapter 13 will I be required to repay?? I hear usualy 50%.

How much your monthly payment is in a Ch 13 is determined by how much disposable income shows up on your mandatory Means Test and Schedules. The Means Test is a complicated cross-comparison of income vs. asset equity vs. real and set expenses controlled by the state you live in. It's not just your real expenses subtracted from your real income.

Depending on your personal financial situation, you can end up paying back anywhere from 0-100% to your non-secured creditors in a Ch 13 plan.

Read here to learn more about Ch 13, how it works, and what to expect - http://www.uscourts.gov/bankruptcyco...chapter13.html

Since you've been umemployed for the last five months, you *may* qualify for Ch 7 because the Means Test looks at your last six calendar months of income before filing. Don't wait - set up free initial consultations with 3-4 bankruptcy lawyers in your area NOW before your income starts to climb again. You'll learn a tremendous amount about what's going to be possible in your financial situation.

Hang in there and keep us posted about what you find out. We've all been where you are right now - there is a way out, I promise.

[Nick9075]

How much your monthly payment is in a Ch 13 is determined by how much disposable income shows up on your mandatory Means Test and Schedules. The Means Test is a complicated cross-comparison of income vs. asset equity vs. real and set expenses controlled by the state you live in. It's not just your real expenses subtracted from your real income.

Depending on your personal financial situation, you can end up paying back anywhere from 0-100% to your non-secured creditors in a Ch 13 plan.

Read here to learn more about Ch 13, how it works, and what to expect - http://www.uscourts.gov/bankruptcyco...chapter13.html

Since you've been umemployed for the last five months, you *may* qualify for Ch 7 because the Means Test looks at your last six calendar months of income before filing. Don't wait - set up free initial consultations with 3-4 bankruptcy lawyers in your area NOW before your income starts to climb again. You'll learn a tremendous amount about what's going to be possible in your financial situation.

Hang in there and keep us posted about what you find out. We've all been where you are right now - there is a way out, I promise.

What about unemployment benefits?? do they count. I was getting unemployment from Dec. new job doesn't start until mid may.

I have also been getting harassing calls from BOA's credit department. I am NOT late on this card but they are threatening to accelerate the entire balance if I do not provide them with income & valid contact info.

[catleg]

Unemployment may or may not count, it is considered a benefit under the Social Security Act so might be able to exempt it. If you've been out of work since December and the new job starts in mid-May you probably want to file no later than sometime in June. That way they will be looking at your income from December thru May. Add that up and tell us what it comes out to, with and without unemployment.

Even if you have to file chapter 13 it will still be better if you do it so your income for the last 6 months looks as low as possible, as long as it just barely covers your monthly expenses. Do a spreadsheet with your income by month and figure your monthly expenses and then go see a lawyer.

[StartingOver08]

I have also been getting harassing calls from BOA's credit department. I am NOT late on this card but they are threatening to accelerate the entire balance if I do not provide them with income & valid contact info.

Well, if you are going to file - this is a moot point. You will lose the card once you file BK.

I say ignore them. There is nothing they can do to force you to provide income info. BOA obviously has your contact info!

Now is time to look out for YOU. Do what you need to do by getting your paperwork together, etc. You may want to file before you relocate - this is a good question to ask the BK attorney in your interviews. There is a residency requirement - and it seems your income is at a very low point with the past 4 or 5 months of unemployement. Take advantage of it...