Question considering filing BK... welcome your thoughts

[olegbro]

In a course of last 4-5 years I was investing in Real-Estate (RE). Due to cash flow problem (I've overestimated my capabilities) and market fluctuation, I ended up accumulating unsecured debts. I short-saled most of it (last property is pending). In addition, we own our ex-primary residence in IL (we are living in CA for last 3 y) and it is $100K under water. It is rented, but we are adding $700/m to cover Mortgage-Tax-Insurance.

Here how the debts look today:

--- credit cards
AmEx $12K (on my name only)
Chase $13K (on my name only)
Discover $12K (on my name only)
Citi Card $20K (both me and my wife names, called them to remove my wife name from the card)
BoA Visa $15K
Advanta $2K
TOTAL: $74K
--- others
RE deficiency loan: $70K (paying)
CA tax $5K (keep paying)
Auto loan $10K (keep paying)
Ex-primary residence ($700K, worth $600K, rented)

I make above $100K, my wife $100K. With high cost of living in CA, our salaries are barely enough send kids to school and pay the bills. No vacation, luxury cars, big screen TV, cleaning lady, etc. I am considering filing BK to get rid off CC's debt. I will keep paying others: car loan, CA tax, RE loan.

I do not care about credit rating. My only concern is BK's impact on my current and future employment. No, I am not in finance, I am in IT.

Help me with your angle or personal experience. Thank you all.

OB

[OhioFiler]

You should complete a means test to see where you stand regarding your income and expenses and whether C7 or C13 will fit you best.

Tons of great info on the stickys here too!

[JRScott]

California is a community property state, you'd both need to file or it won't matter they can just come after your spouse for any debt you discharge just from your name.

Are you currently renting or is their a mortgage in CA as well?

[olegbro]

California is a community property state, you'd both need to file or it won't matter they can just come after your spouse for any debt you discharge just from your name.

Are you currently renting or is their a mortgage in CA as well?

we talked to attorney couple months ago, he never mentioned that me filing alone is senseless. Does a divorce solve this problem of community property?

we are renting now.

[olegbro]

You should complete a means test to see where you stand regarding your income and expenses and whether C7 or C13 will fit you best.

Tons of great info on the stickys here too!

according to debt obligation we had 3-4 months ago, I've passed a means test. Since then, $10K we owed to IRS has been paid, but I've got $70K deficiency loan after commercial building short-sale.

OB

[2manybills]

Also, you may want to check on the ************************ website. There are a articles on there from Southern California attorneys about the courts allowing large mortgages, large car payments, etc. to go towards the means test. I think because the mortgages in So. Cal. are so high, not to mention property taxes, etc.

[JRScott]

we talked to attorney couple months ago, he never mentioned that me filing alone is senseless. Does a divorce solve this problem of community property?

we are renting now.

Don't get a divorce for heaven's sake. How the marital assets and debts would be split would be in the divorce decree though.

Some lawyers are snakes.

[jribe]

Don't get a divorce for heaven's sake. How the marital assets and debts would be split would be in the divorce decree though.

Some lawyers are snakes.

i think he means a "divorce". Like they would legally sign all the papers - probably give her most of the "assets" in the divorce etc. Then wait a few months, file BK. And in another couple of months they could get married again. There's really no reason for family and such to know that they would be doing this- so why not? It would seem to fix the problem..

[falken]

so why not? It would seem to fix the problem..

Bankruptcy fraud is one that comes to mind. You are also lying on your divorce petition unless for the reason for you put "avoiding community property rules and ensuring all debt can be discharged via a single BK".

[jribe]

Bankruptcy fraud is one that comes to mind. You are also lying on your divorce petition unless for the reason for you put "avoiding community property rules and ensuring all debt can be discharged via a single BK".

There's a lot of people that get divorced, for different reasons. Who exactly would determine it was fraud? People get divorced and remarry all the time (at least in CA).

[sigferl]

Thanks for your post ob. It is my humble opinion that you should not file BK because BK is should only be for severe permanent medical disabilites and I do not see that in your post.

If you file BK while making $200k without having an emergency like job loss, death, disability then EVERYONE should file BK because everyone has lost money in the stock market and real estate.

You mentioned not having a cleaning lady, what do you think is frugal living verses luxury items?

I know that it is unpopular to have a post advising against BK but many people have solved their own debt problems and are very grateful for not filing BK.

Has anyone suggested a second job?

God Bless America

In a course of last 4-5 years I was investing in Real-Estate (RE). Due to cash flow problem (I've overestimated my capabilities) and market fluctuation, I ended up accumulating unsecured debts. I short-saled most of it (last property is pending). In addition, we own our ex-primary residence in IL (we are living in CA for last 3 y) and it is $100K under water. It is rented, but we are adding $700/m to cover Mortgage-Tax-Insurance.

Here how the debts look today:

--- credit cards
AmEx $12K (on my name only)
Chase $13K (on my name only)
Discover $12K (on my name only)
Citi Card $20K (both me and my wife names, called them to remove my wife name from the card)
BoA Visa $15K
Advanta $2K
TOTAL: $74K
--- others
RE deficiency loan: $70K (paying)
CA tax $5K (keep paying)
Auto loan $10K (keep paying)
Ex-primary residence ($700K, worth $600K, rented)

I make above $100K, my wife $100K. With high cost of living in CA, our salaries are barely enough send kids to school and pay the bills. No vacation, luxury cars, big screen TV, cleaning lady, etc. I am considering filing BK to get rid off CC's debt. I will keep paying others: car loan, CA tax, RE loan.

I do not care about credit rating. My only concern is BK's impact on my current and future employment. No, I am not in finance, I am in IT.

Help me with your angle or personal experience. Thank you all.

OB

[jb300]

sigferl
Registered User
B/F Newbie



Join Date: Jul 2009
Posts: 15 Thanks for your post ob. It is my humble opinion that you should not file BK because BK is should only be for severe permanent medical disabilites and I do not see that in your post.




Wow, who are you to make a statement like that? People file BK all the time for reasons other than what you state. Do all the businessess that have filed BK have severe permanent medical disabilities, I don't think so. People should consider this a business decision and not feel guilty if they need to file to get a fresh start.

[olegbro]

sigferl:

- prior to this point in time I refused to talk about BK completely, since I preach and live by personal responsibility and freedom of choice. I made a long journey to read and post on this forum, and consider BK as an option.

- BK is a financial tool, and yes it is a last resort in my books too, this is why I am reading your post

- I do have problem with CC though. They take my tax $$$ and then charge me 28%. Nevertheless, I asked an attorney to negotiate a settlement with CC. Their reply is - "... why would we do that, if he is still paying". SO I stopped.

OB

[sigferl]

Thanks for your post jb.

I was have not studied why BK laws were written but I assume it was for dire emergencies, plus BK was reformed in 2005 because to many people were abusing BK so they tightened the rules.

Why do you think BK laws were written?
Should BK be saved for those that 'truely' need it?

Welfare was for dire emergencies and but was greatly abused and Bill Clinton signed legislation to reform welfare to help prevent abuse.

I feel that I live a frugal life but I feel I am being punished by everyone because I have paid for everything I have without anyones help. Should I start spending and go into debt?

Vote Libertarian.

sigferl
Registered User
B/F Newbie



Join Date: Jul 2009
Posts: 15 Thanks for your post ob. It is my humble opinion that you should not file BK because BK is should only be for severe permanent medical disabilites and I do not see that in your post.




Wow, who are you to make a statement like that? People file BK all the time for reasons other than what you state. Do all the businessess that have filed BK have severe permanent medical disabilities, I don't think so. People should consider this a business decision and not feel guilty if they need to file to get a fresh start.

[sigferl]

Thanks for your post ob. I agree completely, 'BK is a financial tool'. Part of your decision should include how this will impact others and if you decide that the benefits for you outweight the impact on others then you have made a good decision.

Many people forget to think about the negative impact of BK on others on the economy so I just try to remind them and to offer alternatives.

I just want to be sure everyone gets a chance to hear all sides of the arguement before making a decision and if you chose BK then BEST WISHES ON A SUCCESSFUL BK. See you on the other side.

Would you advise me to file BK?

Waste not, want not.

sigferl:

- prior to this point in time I refused to talk about BK completely, since I preach and live by personal responsibility and freedom of choice. I made a long journey to read and post on this forum, and consider BK as an option.

- BK is a financial tool, and yes it is a last resort in my books too, this is why I am reading your post

- I do have problem with CC though. They take my tax $$$ and then charge me 28%. Nevertheless, I asked an attorney to negotiate a settlement with CC. Their reply is - "... why would we do that, if he is still paying". SO I stopped.

OB