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    Advice Welcome and Appreciated

    Hi I'm new here. I've lurked for a few days and thought I'd share my situation in the hope of getting sound advice and to a lesser degree, encouragement.

    I live in CT. Married for 18 years with one teenage child. I founded and ran a successful mortgage company for just shy of 15 years. Due the economy and the awful state of the mortgage industry, I was forced to close the doors (Aug. 08). When I did so, I took a huge amount of unsecured debt with me. I've drained all resources, including credit available, to stay current on my obligations. As of yesterday, my credit scores were in the low 720ish range. As of today, I am current on all of them.

    One of my creditors cut my line off. I can longer float payments while trying to originate mortgages (for another company and without success). As of this week, I am no longer able to service the debt.

    Here are some vital stats...

    Assets: Motorcycle worth $1,200 cash of about $1,000.

    I quit claimed the house to my spouse in 1996 shortly after opening my business.

    None of the debt I can no longer service is in my wife's name. It is all in my name alone. The only debt we share is the original mortgage on the house. It's my intention to leave my wife out of the filing to the greatest extent possible.

    My wife leases the car she drives and owns the one I drive outright.

    She earned 84,500 last year.

    My earnings over the last six months is about $1,000.

    I owe $115,000 to essentially 4 creditors.

    I've had one thirty day late on a credit in the past 20 years. I take my debts seriously and always managed them in what I consider a conservative manner. With the income my company used to generate, servicing even this amount of debt was reasonably easy.

    I'm ready to file for a 7. I've contacted one attorney already and have a referral to follow up on and want a third one to round out my options. I know I am close on the means test but the attorney I spoke to most recently believes it won't be a problem.

    I have some questions but first let me state that I don't have a nerve left. I feel like I'm cracking up. I find myself paralyzed to go forward yet I know the clock is ticking and must which only adds to the angst. Filing the bk may also preclude me from working in my industry.

    I was supposed to call the other two attorneys today but can't get myself to do it. Like I said I'm paralyzed. After speaking to the first attorney, I told my wife I would need six months of her pay stubs. She went off and hasn't indicated when she will or if she will provide them. I told her no stubs no filing. But this just thrust me back into "inaction and totally stressed mode".

    My first question is how long does the process take?

    Secondly, should I still use any credit available to me or is there a cut off to play things safe?

    What are the odds of an adversarial action against me?

    How do I deal with my creditors? Do I call them before going 30 days late or do nothing or let my attorney handle them?

    I want to get a salaried or hourly job as my mortgage commissions are non existent. How should I time this with regard to filing?

    Once established, can 7 eligibility change?

    Thank you for any help and or insight you can offer. I never thought at this stage of my life (I'm 50) that I would be in such desperate shape. Sometimes I don't know how I make it through to the next day. Sadly, sometimes I wish i wouldn't.

    #2
    Dude...I feel for you, it is tough. And as I am one of the newest of newbies here, I may not have the best advice to offer but I'll try to help you from my experience.

    First of all, you were running a business and it failed. Not your fault. If you look at bankruptcy as a business tool, rather than as a badge of shame, a clearer picture emerges.

    Running a household is business too, one which I have not been so good at, and which is why I will be filing a 7 in a few days. $46K unsecured debt, house upside down about 20%, IRS debt... though our household income is about 80K, I still qualify with the standard allowances.

    Like you, the debts are in my name only.

    A question for you: in your current circumstances, is it possible to work in the mortgage industry? You say that BK may keep you out of it. It may not, and there may be other/better opportunities for you.

    As far as your questions about the process, a lot of it depends on you. I met with an attorney Wednesday and since I had my 6 months pay info, wife's info, creditor info etc. all written up, he just put it all in his laptop (this was during the free consultation) and input some info from me about household expenses. I didn't need any detailed household expense reports, just answered his questions about what do you pay monthly for fuel, utilities, insurance, food...there are standard allowances that can be input.

    From there, it's a paper chase to gather the most recent statements of retirement accounts, mortgages, etc. that he needs but fortunately I could get a lot of that online.

    I'm ready to file, tomorrow, but more realistically Monday - assuming everything I have is in good order. Meeting with the creditors is about a month later, but your atty will know more specifics about BK court circumstances in your area.

    You need to stop using your credit. Recent items over $600 may be questioned and not dischargeable, according to my attorney. But even so, they can be negotiated down...since you are filing a 7, you have no assets.

    Hopefully someone more experienced will answer your other questions, but I would basically say make sure your wife understands how important it is to you for her to support you in investigating this option...pay stubs should be easily available online through her work if the hard copies are gone...and keep reading here and elsewhere to help yourself view the process objectively.

    Good luck!
    Michael
    _______________________________
    341 Meeting 11-Jan-2010
    Unsecured debt: $46,000 IRS: $1800
    Discharged and Closed 27-April 2010

    Comment


      #3
      Hi Zero,

      From a fellow mortgage broker, don't feel bad or ashamed about your situation. Go talk to a couple attorneys, and be sure you choose one that you bond well with. He/She will guide you through the process. Take some time and read through the stories on here. I recently discovered this forum and it has been amazingly helpful. It took me a long time to get over the guilt of not paying my bills. However, I've paid enough in finance charges over the past 20 years. Plus, look at some of these banks. Ken Lewis from B of A is retiring with $53 million in pension. Seriously?

      In regards to some of your questions, the process takes about 90 days after filing. Generally, you will have your creditor meeting 30-45 days after filing. Then, 60 days after that your case is discharged.

      I wouldn't call your creditors and discuss your situation. If you are filing, they will call you once you start missing payments. You will soon recognize the out of state phone numbers. They are auto-dialed numbers and rarely leave a message (I let all mine to go voicemail.) Sometimes if they do leave a message it will be generic like, "please call 1-800...by the end of the day."

      Just know you have a great support system here, and you are NOT alone in this situation.

      James
      Filed 11-4-09
      Discharged 4-26-10 (took 3k out of a 4k tax return. Who cares! $55k in debt went away!)
      Portland, Oregon

      Comment


        #4
        First, your situation is what it is...and it will get worse as you well know. We delayed almost a year trying not to file and all we did was get deeper in debt trying to avoid filing always hoping for the replacement job for my hubby that never materialized. It's not gonna go away...if you have to file you have to file and any consequence therefrom can be dealt with as they come along - it is not the end of the world. You will have challenges over the next 10 years with a Chapter 7 on your credit reports but time is your friend and you can reestablish yourself credit-wise.

        Stop using the credit cards; stop paying the credit cards and continue paying on your secured items. Out of the three attorneys you have spoken with pick one who you are comfortable with. Best of luck to you...
        _________________________________________
        Filed 5 Year Chapter 13: April 2002
        Early Buy-Out: April 2006
        Discharge: August 2006

        "A credit card is a snake in your pocket"

        Comment


          #5
          I appreciate the responses. We'll see what I can get done today.

          Comment

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