Scared!!

[Helpmemommy]

I'm so stressed I can barely eat/sleep. I love this board and I'm hoping you all can help me. I've met with two lawyers for their "Free Consultations." I feel a little rushed in their so I think of a million questions after the meeting. My story is this. I am married, two kids, my husband makes just enough to cover mortgage and car payments. I have to come up with everything else. I'm a waitress and there are nights that I don't even get a table. We are about 20,000 in credit card debt and late on all payments. I have a 1st mortgage at 99,000 and a Heloc (closed) at 100,000. My house according to zillow is 215,000. We don't want to loose the house or cars. If I could just get rid of the cc, I think we could manage. My kids don't even have heatlh insurance. Just paying the minimum on these cards is around 400-500 a month. Is it crazy to file with 20,000? The lawyers are saying if I can't make it, my credit is already shot!! Friends are strongly advicing me not too, that I will never recover. I did just land a management job this week, so things might be looking up soon. We are still above our means. We would like to eventually sell the house down the road, is that something that you can do after bankruptcy and then will anyone rent to us anyway....MOMMY. Oh and if our family every found out.. Also, would it be wise for me to just file and not my husband. All the debt is in my name anyway?
Thanks

[Helpmemommy]

Anyone with any advice out there?

[Flamingo]

My advice to you is to put your entire family on a strict budget since you just landed another job. Cut up those cards. You need to cut the spending if you don't want to file. With your increased income, strict budgeting and stopping unnecessary spending, you might be able to start paying down debt but it will not be an overnight thing. Otherwise I would investigate Chapter 13 if you want to keep your house and truly believe you can afford to keep your house. You have a lot of personal questions to think about as to what you want to do and might not be able to do. Have you worked your new future income into your situation and see what a difference that would make?

The Chapter 13 would allow you to keep your house and cut the continued piling on of interest on the credit cards and you would have to learn to live on a cash only basis.

When you start that new job and get your new income in order, i would again go see an BK attorney and get a new perspective....best of luck to you and I hope things work out...

[OnTheRocks]

You have taken the first steps to getting out of your situation already, as I did a couple months back. Filing is quite fashionable these days; everyone is doing it. Once you accept it, it becomes easy..

Get a Google Voice account (got mine on e bay) and hopefully you can change #'s on your accounts so they don't bother you. Or don't answer unknown callers.

[Flamingo]

You have taken the first steps to getting out of your situation already, as I did a couple months back. Filing is quite fashionable these days; everyone is doing it. Once you accept it, it becomes easy..

Get a Google Voice account (got mine on e bay) and hopefully you can change #'s on your accounts so they don't bother you. Or don't answer unknown callers.

Filing BK will never be "fashionable" and not "everyone" is doing it...it is only a small segment of the adult population in this country who file in a given year when you consider the millions and milliions of others who have not or are not in the position to file. Right now filing is more "common" because many people saddled themselves with so much debt that there is other way out when the job loss hits or the hours are reduced. I would not consider carrying a heavy debt load "fashionable" after going through a Chapter 13 myself. Many suffer the consequences of filing afterwards for years with job declines, denial of mortgages and credit, etc., etc. It does have it's consequences and should be the last resort over one's entire review of their financial house. Also, guess who pays for all the dumped debt from the bankruptcies? Think about that next time there is any complaining about the rise in fees, taxes and other costs. One should never take filing bankruptcy lightly due to all the pros and cons involved and should be a decision made after realizing there is just no other way out.

[OnTheRocks]

Pardon my flippant post, apologies.

[Helpmemommy]

Thank you for the responses. Both the attorneys adviced against Chapter 13! They said with chp.7 it would be done and I would be on my way to building my credit back. With Chp. 13 it takes years and your credit is still not good. Am I being mislead? When you talk of job opportunities, is this for higher paying corporate jobs? I am a waitress..period. It's all I've ever done. I'm more worried about being declined for health insurance, life insurance, future things my children might need me for. The two lawyers I talked to said I would not loose my house or cars. I'm in Florida, does that make a difference?

[Flamingo]

Thank you for the responses. Both the attorneys adviced against Chapter 13! They said with chp.7 it would be done and I would be on my way to building my credit back. With Chp. 13 it takes years and your credit is still not good. Am I being mislead? When you talk of job opportunities, is this for higher paying corporate jobs? I am a waitress..period. It's all I've ever done. I'm more worried about being declined for health insurance, life insurance, future things my children might need me for. The two lawyers I talked to said I would not loose my house or cars. I'm in Florida, does that make a difference?

Yes, a lot depends on where you live, your income, assets, etc. Florida is a homestead state so that makes a big difference. Please note it doesn't really matter what chapter you file - BK is BK - a Chapter 7 stays on your credit reports for 10 years from date of filing whereas a Chapter 13 only stays on for 7 years. A Chapter 13 allows one to keep certain assets so it all depends on many factors. BK could have an effect on any future jobs in any sector, but usually the most where one is in finance/banking, has to be bonded or handles accounts/money (i.e., cash register). No one can say for certainty it would affect one in changing a job in the future either in the same position or another position. It should not have any effect on one obtaining health or any other kind of insurance, although some states permit insurance credit profiling where auto and home insurance premiums can rise considerably if one files BK.

In your situation you have have landed a new "management" job which I assume means more money. You will need to take that all into account as to your contemplating filing as you will have new figures to deal with and will have to base any decision on those new figures.

[joek]

flamingo has enlightened me on the length of bk staying on a credit report. I thought that both stayed on credit report for 10 years. Thanks. This is one reason one must keep reading these forums. They are so informatinal!

[Helpmemommy]

I understand that in the coming months when my job really kicks in and I'm only talking about 25-30,000 a yearn I will be making a little more than I have been. Until then what is going to happen to me with the months of unpaid credit card bills? They are already calling nonstop and I'm just racking up the interest daily. Should I seek debt consolidation? I've just proposed the idea to my husband about renting a room in our house to make ends meet. How long has anyone gone without paying credit card bills and what is the long term effects on your credit report after that? Thanks so much for the great advice.

[billf]

Keep the house

Debt consolidation or settlement would get you nowhere if you can just about pay mortgage and essential bills. I'd change my phone to unlisted, stop paying the CCards, and pay a BK attorney to file Ch7 if you can pass the means test.

[Flamingo]

You stated you already met with two attorneys. I suggest you get free consultations witih at least two more since you now have a new position and your figures have changed and you have a ton of personal questions that depend on what you do. You also have to determine whether or not you truly can afford to keep your house. Get a few more opinions; take with you a complete listing of all your debts, monthly payments, sources of income, paystubs, a listing of your assets and information on your new position as to income and when you start that position.

You state all the debt is in your name; does that include the house? Make sure your hubby accompanies you to these consultations as his income is considered even if you file under your name only. If you have to file you will eventually recover and have to stop worrying about what everyone thinks. Anyone having bad financial difficulties goes through extreme emotions when faced with it all and trying to figure out what to do. It will get handled and get resolved. You just need to get all the information and figures in place and make some life decisions that only you and your spouse can make.

Best of luck to you...