I'm in a pickle... like so many of you. Advice?

[Amy26]

Hi there, I'm in a bit of a mess and I just have no idea what to do. I really hate being in a situation that you just can't see the light of day out of.

I'll try to keep it in a nutshell... last year I moved to Denmark for a job/boyfriend. It was crazy and I had to borrow a lot of money from credit cards to pay for moving and paying of negative equity in my car etc... but, I figured it would be fine down the road with 2 incomes and we'd just get everything caught up and paid off. I get to Denmark, work permit gets delayed 3 months and then yay I get laid off from a job I hadn't even started.

So.... I had borrowed money from credit cards to pay my mortgage etc... to keep everything current. Terrible stuff... So, then I was forced to move back to the US. I did manage to get a job back here that I started last month. So far, I've only received 1.5 paychecks.

I'm currently behind on my first mortgage (submitted a hardship package back in March and they still haven't gotten to mine yet), I have over 40,000 in credit card debt...and one of my cards just decided to raise my interest rate to 27% with a 405 dollar a month payment...yay.

My home is my biggest thorn in my side. When I moved to Denmark I tried to get rid of it but found out that I owe over 150,000 more on my home than its worth...I can't believe this happened in 2 years. So, couldn't sell it... mortgage companies wouldn't help me. Rented it just to have people in it. Had to rent it for 1000 and the total mortgage is 1950. So, I'm paying almost a grand for someone else to live in my house. Now that I'm back in the US I have to rent from a friend because my renters have a 2 year lease and they pay on time so I can't kick them out.

So, technically I make good money. The job I just started is at 90k a year. However, prior to this I was receiving no income for 6 months.

Is my only option to just suck it up and deal with this mess? Or might I be able to file for bankruptcy? I was unsure of this because even as of yesterday I have been charging things to my cards. I also have some balance transfers from one card to another that I did recently.

Yes it was my choice to move to Denmark but not my choice to be unemployed, laid off and forced to come home.

I'm paying 1000 for the mortgage, 700 in rent, 393 car payment, HOA 228, 104 insurance, 405, over 700 a month in credit cards, 150 in student loans... technically I can afford all this but saving money is almost impossible. Anything that comes up unexpectedly I have no money for.

Not sure if anyone has any advice, but at least I got to vent... the whole situation makes me frustrated and so emotional.

[woeisme]

With your income, you will have to file CH 13. Not sure you'd be able to keep house and claim rent expenses though, will want to talk with some experienced attorneys to figure out if you can keep house or not, but if you are so underwater, why would you want to? But if you want to avoid CH 13, you could let your house go back to the bank, and that would eliminate $1228 a month from your expenses, which you could use this to pay down other debts, especially those with high interest rates. But BK would protect you from the renters and home owners association from coming after you (lawsuits). Best of luck to you!

[Amy26]

Hi thanks for the reply!

I was told though awhile back that even though I make a lot of money now, they take an average of how much money you have made in the last 6 months... so I may still qualify for a 7?

I would actually really love to just get rid of the house... I really like it but I can't ever see it coming back up 150,000 any time soon.

Also, your suggestion to just stop paying it and let the bank take it back... I'm not sure I can do this without reprocussions on me for the negative equity... I have a first mortgage with Acacia Federal for 191,900 and a second mortgage with a credit union for like 70,000 (some of which was bad debt I put into the second because believe it or not 2 years ago I had 60,000 in equity). So, if I just stopped paying it and let it go back.... (also since I live in VA) wouldn't they come after me for the money???

[Amy26]

I actually just spoke to a lawyer and he suggested that I start with a chapter 7 if he can make it work and then move to a 13 if they reject it.

I'm just so confused as to if I should do it or not... I'm just afraid they will find something I didn't dot an I or cross a T and will deny it or something. Grrrrr....

[whipster1]

They will do the six-month lookback to see if you qualify for a seven, but they will also ask about changes in income and might ask for current paystubs. I doubt a 7 would fly.

Good luck!

[walkthaplank]

Talk to a couple more lawyers in the area and get 2nd and 3rd opinions. Ask them best case, worst case, what is likely in your area. Every district is a little different. You can walk away from your house in either a 7 or a 13.

Good luck!

[mgmadara]

So, if I just stopped paying it and let it go back.... (also since I live in VA) wouldn't they come after me for the money???

They would come after you for the deficiency balance, but that would be discharged if you filed for bankruptcy.

[Amy26]

I'm even more confused now as my attorney wants me to do chp 7 and file before I get married in 2 weeks. How am I supposed to give him 1500 in less than 2 weeks if I can't pay my bills?

How do you guys afford the attorney fees? Do I take my renters 1000 dollars and not pay my mortgage to pay the attorney?

I also have to do immigration for my fiancee and we have money saved up for that after we get married. I'm so confused.

And how do I know that I will definately get qualified for this stuff after giving this dude 1500 bucks.

[Flowers]

Amy - it took me a good 6 mo. to gather the funds to pay for the filing. Ugh, and the phone was ringing.
See if there is anything you can sell on eBay, Craigslist, etc.
Or, just take a large portion from your next paycheck and pay the attorney.
You might have to be late on electric, gas, telephone, but just call those folks and make other arrangements.
If you stop paying the cc you should be fine.
You are already in trouble with the mortgage company , yes? then going into BK will get you protection from any action they may want to take (probably none so quickly.

[Amy26]

Thanks, I'm starting to feel that I need to do it asap. I'm just so scared! I have so many questions for my attorney... like I'm just freaked out about what I do with my money in the next few weeks.

My lawyer told me it was ok for my mom to lend me the money for the lawyer fee. I'm also freaked out about any deposits I've had into my account or anything are they gonna wanna know where it came from and what it was for?

I'm also a little concerned that I'm going through immigration with my fiancee. We have put aside a bit of money for that...its quite expensive. His parents have given us some and my family... do I need to withdrawl that money? Will they wonder why?

Me so confused... O.o