OK Where do I start???

[moonbeam9209]

I am so confused about all of this bk stuff. We stopped paying our cards last Oct., and used to get calls constantly, and they have been toned down to only a few a day. I am not sure what our next step should be. We had 13 or so credit cards...Lowes, 2 Home Depot, Discover, Amex, Kohls, JCP, 3 Capital One cards, BOA(the worst!!), a Visa through our CU, billmelater, American General(furniture loan)....Total outstanding debt of 65k (prob. 75 now with late fees).

I am just not sure what to do. We own a car worth 12-15k, and another worth 6k(we owe 2k on it). Lots of pretty furniture from American General

1. How will I know if our creditors have filed anything legal against us? Frm what I have read, these creditors are in different states. I have been checking out courts website in my county, but that is probably stupid.

2. Do I wait to it all hits the fan to think about filing?

3. Can I sell my van to use some of the money to pay bills, and buy a cheaper car? Or should I just hold out as long as possible to file so that the value of it will go down as much as possible to try to exempt it? (I was hoping that if we could only exempt 7k(it is prob worth 12k) of it, as we live in Georgia, and then I could use the rest of our home equity towards the car.) We owe 193k on our house which may be worth about 210???

4. We have a Fannie Mae loan, serviced through our credit union, and couple of months ago we tried to qualified for the modification, but they told us we didn't make enough money(duh???), and put us into a forbearance for six months until we could show more income, then try again to get us into the mod. We are both self employed, so when I sent them the P & L, I might have shot a little low. I was concerned that our payment would be too high, to I claimed a little less, but I guess I just shot myself in the foot. It's not like we make much at all, but the girl at our cu told me that out of the 15 apps that she just processed, only 2 qualified for the loan mod.
Sorry, I just rambled on, but I am wondering how if at all bk, or even the prospect of it could hurt our loan mod and/or forbearance?

5. Lastly, we owe our cu 8k for a credit card, and we considered taking a loan against our car from our cu to pay this card off, and then taking the difference to pay some other things. My question is, is it smart to pay some of these creditors off, like the furniture people, and/or our cu, and then maybe hope that we might not have to file for a while???

Sorry so lengthy, but I am utterly confused...

[eddiep]

I am so confused about all of this bk stuff. We stopped paying our cards last Oct., and used to get calls constantly, and they have been toned down to only a few a day. I am not sure what our next step should be. We had 13 or so credit cards...Lowes, 2 Home Depot, Discover, Amex, Kohls, JCP, 3 Capital One cards, BOA(the worst!!), a Visa through our CU, billmelater, American General(furniture loan)....Total outstanding debt of 65k (prob. 75 now with late fees).

I am just not sure what to do. We own a car worth 12-15k, and another worth 6k(we owe 2k on it). Lots of pretty furniture from American General

1. How will I know if our creditors have filed anything legal against us? Frm what I have read, these creditors are in different states. I have been checking out courts website in my county, but that is probably stupid.

That's not stupid! They will sue you in your local court. But your creditors will send you notification once they have started legal action. But once that happens you will not have alot of time. I noticed that you have equity in your home so you will want to protect the equity, since they could go after that and if you have not made any payments since October you are probably running out of time.

2. Do I wait to it all hits the fan to think about filing?

No, I don't think you should wait for it to hit the fan! You will be rushed at that point. You should at least make some appointments to meet with some local bk attorneys and discuss your options if you are even considering filing, the first consultation is usually free nd you will be under no obligation to file.

3. Can I sell my van to use some of the money to pay bills, and buy a cheaper car? Or should I just hold out as long as possible to file so that the value of it will go down as much as possible to try to exempt it? (I was hoping that if we could only exempt 7k(it is prob worth 12k) of it, as we live in Georgia, and then I could use the rest of our home equity towards the car.) We owe 193k on our house which may be worth about 210???

You can sell your van as long as you sell it for fair market value, and use the money for living expenses, lawyer fees and buying a new car, but if you are definately going to file don't waste the money on any debt that you will be getting rid of in bk. When was the last time you had your house appraised? You could have a local realtor give you a market analysis for free, that would give you a good idea of the current value.

4. We have a Fannie Mae loan, serviced through our credit union, and couple of months ago we tried to qualified for the modification, but they told us we didn't make enough money(duh???), and put us into a forbearance for six months until we could show more income, then try again to get us into the mod. We are both self employed, so when I sent them the P & L, I might have shot a little low. I was concerned that our payment would be too high, to I claimed a little less, but I guess I just shot myself in the foot. It's not like we make much at all, but the girl at our cu told me that out of the 15 apps that she just processed, only 2 qualified for the loan mod.
Sorry, I just rambled on, but I am wondering how if at all bk, or even the prospect of it could hurt our loan mod and/or forbearance?

If you need a loan mod you should probably do it before you file. My lawyer insisted upon it and we still have not filed because we are waiting on the final documents. This is kind of uncharted territory as loan mods are relatively new but you will not be able to continue negotiations during your bk because you would be under the protection of the "automatic stay" which prevents any creditor from contacting, unfortunately this happens whether you want to talk to them or not Another problem is that if you are filing chapter 7 you need to be current on your mortgage, if you file chapter 13 you can be late and get caught up during your repayment period.

5. Lastly, we owe our cu 8k for a credit card, and we considered taking a loan against our car from our cu to pay this card off, and then taking the difference to pay some other things. My question is, is it smart to pay some of these creditors off, like the furniture people, and/or our cu, and then maybe hope that we might not have to file for a while???

I don't know you would have to worry about cross collatorization, meaning they could take your car if you default on another loan you have with them. Meaning the car would become collateral for your car loan, cc you have with them.

Sorry so lengthy, but I am utterly confused...

My best advice is if you are even thinking that you may need to file in the near future, it is best to talk to an attorney before you make ANY financial decisions at this point. Anything you do at this point could be misinterpreted if you file soon.

OH! by the way if you have any money in a checking or savings account at this credit union move it before you default on any loan you have with them!!! They absolutely positively can and will take that money without notice if you default!!

[Flowers]

by now you should have spoken with an attorney about what the best move is.

[moonbeam9209]

My best advice is if you are even thinking that you may need to file in the near future, it is best to talk to an attorney before you make ANY financial decisions at this point. Anything you do at this point could be misinterpreted if you file soon.

OH! by the way if you have any money in a checking or savings account at this credit union move it before you default on any loan you have with them!!! They absolutely positively can and will take that money without notice if you default!!

I do not have much money in the CU, but they have my mortgage, car and Visa loan. The auto loan that I have with them is for the car worth about 5-6k, and we owe almost 2k. The loan that I was talking about would be for the Van that I own outright, and it is worth about 12-15k. They had offered me a loan on it for maybe 15k, and it would cover the Visa (8k) that I have with them. Originally I got the advice of why get a loan on something (the Visa) if we were going to include it in BK, but if they can take the car in cross collateralization, why not just get the loan, that way I could take the rest of the proceeds and pay a lawyer or other things.

[moonbeam9209]

by now you should have spoken with an attorney about what the best move is.

You are right, we are going to see an attorney next week. I am just really scared of the bk thing, especially after I have read how nasty the trustees can be. Somedays I just think, just let it ride and see what happens and deal with the creditors one at a time. When I checked my credit report the other day, it says that most of these have been written off as "bad debt", and only one shows as being sold (GEMB Sams Club was sold to HILCO Receivables). I am still not sure as to the advantages/disadvantages as to filing or not. I know an attorney can help us with these things, but I am trying to get every ounce of knowledge that I can beforehand. It kinda sucks too, that when you are the brokest you have ever been you gotta come up with money to pay an attorney.

Some say use the extra money you have from not paying credit cards towards that, but there IS no extra. After being laid off my husband has only had bits and pieces of work (he is self employed as a handyman, and looking for a full-time job in Construction sales again). I am a part-time bookkeeper, and the couple of hundred bucks I make a week just doesn't cut it. Not looking for sympathy, just trying to figure it all out...

Thank you so much for all of the advice here (I mean everyone).

[eddiep]

I know it is nervewracking and you are wise to look for advice before you take a big step like this.

The thing that bothers me is there are very few steadfast rules, most of it is not black and white and some things are no problem in one district and a huge problem in an other. That is why it is so important to consult with a local attorney that specializes in bankruptcy. He will know the local customs.

I don't think most trustees are nasty, just educate yourself and dont do any deals with the van or your loans until your attorney approves it, I think you might bring out the nasty in your trustee if you do something that appears shadey.

I hear you on the cost of filing. Luckily somebody backed into my car I used the money to pay my lawyer instead of fixing the car. It was just a coincidence but it was exactly how much we needed to pay him. But you could go to your local court and talk to the clerk and explain your financial situation. I know in my district if you show financial need they will waive the filing fee which is $300. the clerk may be able to give you some information on lawyers who may offer probono services. It may be worth the call.