Question Should I file now or wait ??

[arsenafan]

Im a noob and am tired of losing sleep at night so I'm thinking of foling BK. Here is a small snippet of where things lie.

I was recently laid off unexpectedly. Went from making approx 5k per month to $1800 on unemployment. I received approx 8k in severance in May.

My girlfriend lives with me and makes 34k and we have a joint checking acct. We have had this joint acct for years.

I own home..owe approx 118k..home prob worth about 110k, 15k in CC. Auto loan ( Suv ) worth prob 8k and I owe 22k. Auto loan ( car ) owe 28k, worth prob 25k.

I also recently opened a local checking acct so I can deposit my UI checks instead of overnighting to BOA as there are non around me.


Also there are things coming up that need to be paid ( ie auto ins)..if I put those on my credit card as I usually do will that be frowned upon - I need to extra cash to pay mortgage and daycare/school costs as trhey dont accept credit cards as payments)


How does this work now - we have about 3k left in a savings ( what is left of severance ). We are about $1500 upside down each month and know that is the 6 month means test were ran today I would prob not pass due to my employment earnings.

I dont know what do do as that $3k will be gone VERY VERY soon !

[eddiep]

That is the scarest place to be, right on the edge. It is tough to answer your questions without knowing whether you want to file or not. I know I found a lot of relief from the stress once I decided to file. (I haven't yet, but hopefully in July) But that's me, and I knew I did not have any other choice.

I guess if you have decided to file and just not sure if you need to wait or not it would be important to do the means test using your last six months income and then try it again using your future six months income (after the 8k and employment income drops off). If that makes a difference between ch7 and ch13 then you should probably wait for that income to fall off.

It also sounds like you have some big decisions to make, like whether or not to keep the SUV. If you let that go back to the bank would that be enough to hold you over?

Are you still making payments to the cc? If you are sure you are going to file than you should stop paying them. If you are not sure, continue to use them and pay them. But you should not have any new charges withing 60 days of filing.

Most bk attorneys will give a free consultation, you should interview a few of them.
Whatever you decide to do, I wish you luck. You are not alone.

[arsenafan]

Thanks for the kind words. Irs really strange because deep down I'm worried about being worse off down the road. I don't know how it will be viewed as my GF and I share a checking and savings account but all the money in there is not mine. I also hate the thought of the trsutee taking my tax return.

Its all confusing !

[LuciluS]

We met with our Attorney late last Sept. He told us to quit Using and Paying our Credit Cards, besides one CC I had a balance transfer of $3,500 in early Aug. He told me to make 3 pymts on that CC & try to add a little bit more and told us we could do a Chapter 7.

Hubby found this forum in early Oct. and come to find out some monies I was receiving would have been considered income. Due to the market tanking, it ran out in Feb. 2009.

Attorney is paid in full. We will be filing a Chapter 7 in 9/09 using Mar-Aug. income. I am 100% disabled and receive a monthly SSD check. Hubby is an OTR Truck Driver.

We are current on mortgage payments (closed on home 12/20/07). Last house sold in our area was 10/08, but 3 new listings this past week. We've probably lost about $10,000-$12,000 which is not too bad. So, we will keep home.

Dang. I checked several months ago and the NADA retail on my 1999 Toyota Sienna Van (paid for) was $3,600, today it is $6,000. Used car prices are going up & new ones are coming down. I have less than 100,000 miles on it. It also has a remote control lift for my scooter, so the rear seats are gone. Federal exemption is $3,220 (I think), but hopefully, I can use part of vehicle as exempt for disability aid.

Hubby's truck is upside down by about $10,000, BUT he is 6'6" tall and doesn't fit in a lot of vehicles. It's a 2006 Dodge Dakota and pymts are under the Federal guidelines, so we will keep it.

Already voluntarily surrended our Class C Motorhome last Nov. Kept calling and calling until they finally came and got it. Didn't want to pay insurance on a Motorhome that had been driven (except for oil changes) in over a 1 1/2 yrs.

2 things have happened since we decided to wait on filing. I had Skin Cancer (surgery in late March), will get 6 mth. check-up, but already know I've got another place that is cancerous. Hubby spent a week in the hospital in April. His organs were shutting down and all they could figure out was a case of Severe Cellulitis (came on in 1 day). He had 5 bypass surgery in 2/07 & pacemaker in 6/07 at age 50 & was off work 7 12 mths. He has a bout of Cellulitis about every 6 mths., but hopefully, wearing a compression hose will push the blood flow through other veins.

Now, if we would have filed bankruptcy earlier and been forced into a Chapter 13, we would be in a world of hurt as hubby's insurance has a $2,500deductible & out-of-pocket expenses. These medical bills can be included in a Chapter 7 and wiped out; however, after discharge I intend to pay them as they saved my husband's life. Trucking insurance is the pits. He's worked for 3different cos. in his lifetime and all have high deductibles, high co-pays & prescriptions are tiered lowest being certain generics for $20.

On top of that, we pay $500 a month for Prescriptions and that is with his insurance, my Medicare supplemental policy. Since 2005, we've spent between $12,000-$15,000 in medical expenses. I do our tax returns as I was an Accountant before a car accident (not our fault) in 3/05 deemed me 100%disabled. I've had 7 surgeries.

My recommendation is to read, read and read posts in this Forum and to utilizie the 'Search' button and to ask questions. Utilize either means tests

http://www.legalconsumer.com/bankruptcy/nolo/

or this one

http://www.johnfire.com/meanstest/wizard.php

Personally, I like the second one. It was written by a member (cannot recall his screen name..sorry chap) of this forum and suited my needs better. Then set up some free consultations with several different Attorneys. Try to stay away from the Bankruptcy Mills (big law firms, where usually your first appt. is with a Paralegal). Nothing against Paralegals, but if I'm going to be paying an Attorney money, I want to see him First. Write down all your questions after you've completed researching your specific allowances, exemptions etc. & get them answered.

Most of the time, you will have to pay an Attorney before filing for a Chapter 7 where in a 13, some of his fee can go in your plan. However a 7 is much cheaper than a 13. Just because you maybe over the median in your State doesn't mean you can't file a Chapter 7 if your Disposable Income is less than $167 (somewhere around that).

Knowing the stock market was tanking, and I would be losing that income, we decided to wait & file Chapter 7 as I don't want to be 'ruled by a Trustee' for 5 years.

As for your SUV, man, that's a decision you are going to need to decide. I know you think the world is crumbling around you and believe me for the first 3 months without using Credit Cards, I thought we were going to be living on Beans, Beans and more Beans, but I wouldn't 'rush into a Bankruptcy'.

There are so many different Scenarios in any Bankruptcy. What's allowed in one State/District may not be allowed in another. For instance, my husband pays a Parent Loan on his son's 1st yr. of college. It is $115.20 a month. In our district, it is an allowable expense. In others, it's not. I posted in the Bankruptcy News Section on this forum where are District ruled that monthly IRA monies are not included for the Means Tests, but most Districts don't allow that. Those monies, just like my SSD, are included in the Income less your expenses to determined your disposable income.

Btw, we've given our CCs' our Attorney's name & phone number twice. We've received 4 collection notices and could possibly be sued. Attorney told me, if we got something in the mail certified, Fed-Ex, UPS or hand delivered, to bring it to him and he would file something (forgot name) to stall until we can file in 9/09.

Sorry, I wrote you a novel LOL! O and as so many have said Filing Bankruptcy is a Business Decision and You Need To Leave the Emotional Side Out of It. Got the 1st one down pat, but the emotions is hard sometimes. Just like I cannot pay the hospital until after we are discharged because it will be over $600 and that's a 'preferential payment'. See! See! that's a Scenario I just found out about this past week from This Forum. I knew Credit Cards and Relatives, but I had no clue that medical expenses could be considered 'pp payment'.

Good Luck!
Luci

[eddiep]

I dont know what state you live in but you may be able to exempt your tax return and talk to an attorney about the joint account. What do you mean by being worse off down the road? If you are thinking that you may be able to keep paying the house and cars now but down the road may not, you could take the option of not reaffirming the loans. That way in the future you can continue to keep and pay for them or walk away if you had to.

[JRScott]

Have your girlfriend make a new account at a separate bank and move to have her money deposited there to help safeguard her funds.

I would advise not filing bankruptcy until you find a job if at all possible.

Stop paying the Credit Cards now. Even if you stop now your looking at 6 months before they'll even sue you.

You mention daycare costs. Not sure how it works there but could you save money by watching the kid(s) while you are unemployed. My bro watches my niece since he got laid off just a suggestion.

Is any of the CCs or auto loans at the same bank either of you have accounts at? If so move the bank accounts to another bank now. Cross collateral is evil.

Next after moving bank accounts, I'd stop paying on the SUV. Honestly you owe three times what its worth, its not worth paying anymore on. Yes this means you'll lose it eventually but they'll probably not move to repossess for at least 2 months.

Auto insurance you should keep on both vehicles, even the SUV your not paying on, because if it gets damaged before they repossess you'd like to be covered. Perhaps your gf can help cover this if just not paying the CC and SUV payment is not enough.

If you have Student Loans call them up and see if you can get them placed into deferment. I'd look to do 6 months to a year deferment since your unemployed and the state of the economy.

[StartingOver08]

If you are considering filing bankruptcy, it is better for you to stop charging on your credit cards for at least 90 days prior to the filing date. There has been a lot of discussion about charging living expenses on the cards in the immediate 90 day period just before the filing date. It appears that some districts are very strict and others are not, depending upon your trustee and the details of your case.

This is from an attorney's website: Non-dischargeable Debts - All debts incurred by a debtor over $550.00 for "luxury goods" within 90 days of the bankruptcy filing or cash advances for more than $750.00 within 70 days of filing are presumed to be non-dischargeable.
For more information go to this link: http://www.flalawyer.com/reform.htm

My opinion is that the passage of time can work wonders for your case prior to filing. It is best to wait until you have worked out the best plan for you - don't let the creditors rush you to filing BK. Interview 3 or 4 attorney's to find out what your best plan is - but don't rush to file. Figure out how you are going to support yourself post BK without credit cards. That is really the hard part. The first step is not charging your living expenses. JMO.