When Do I Stop Paying My Mortgage/Bills? Or Do I?

[BKInLA]

Hello All,

As a new member, I do realize that I am at the bottom of the food chain but if someone that had a situation similar to mine could help out I would be ever so grateful.

I have been juggling my finances around for about the past 6 months just to stay afloat but I feel the boat sinking now. We lost half of our income, took on two extra family members that had no place to go and had a 3rd child all within the last 2 years.

Right now, I am still current on everything but our monthly debt is greater than our income by about $1500. By the grace of God we've been able to manage by pulling from here and there and using next month's income to pay for this month's bills and so on and so forth.

Here is a quick rundown:

Mortgage - $2950 (Owe $440k, house worth maybe around that much)
Car #1 - $540 (Owe $16k, car maybe worth same)
Car #2 - $375 (1 year left on lease)
CC #1 - $400 (Owe $20k)
CC #2 - $450 (Owe $18k)
CC #3 - $300 (Owe $26k, Already in a hardship payoff agreement)
CC #4 - $100 (Owe $5k)
CC #5 - $25 (Owe $1k)
Utilities/Cell/Internet - $350

If it were you, would you stop paying the mortgage and use the money to keep you afloat on the CC's and save the rest. Hope that the mortgage co (PenFed) will work with you and help you lower your interest rate and payment. OR do you stop all the CC's so you have enough to pay the mortgage and just get by until either your income goes back up or you figure something else out. OR do you get rid of one of the cars and try to work our payment plans on your CC's so that you can save at least the needed $1500/month to continue to get by until situation improves.

Any help will be greatly appreciated. I posted this on another forum over at Fatwallet and I got a lot of great advice there but most suggested looking into the BK forums since more people would have gone through similar, if not exact, situations.

Again, I thank you in advance and I hope that one day I'll be able to look back and maybe help someone else out.

[eventsdj]

I'm pretty new here too, but we did decide to file chapt. 7, with about $77,000 in debt, mostly cc's and a large loan.
We were current on everything, but could not afford much else, meaning, no dentists, heaven help us if our vacuum or car broke, etc.
We'd pay bills,and use small cash advances to get by.

We have our meeting next week, and we stopped paying 2 months before we filed.
The calls were brutal, but we DID NOT answer the phone. Once we filed, they stopped almost immediately.

We plan to keep the house, still current on that. Now that were not paying cc's, we can pay the house note.

[BKInLA]

I'm pretty new here too, but we did decide to file chapt. 7, with about $77,000 in debt, mostly cc's and a large loan.
We were current on everything, but could not afford much else, meaning, no dentists, heaven help us if our vacuum or car broke, etc.
We'd pay bills,and use small cash advances to get by.

We have our meeting next week, and we stopped paying 2 months before we filed.
The calls were brutal, but we DID NOT answer the phone. Once we filed, they stopped almost immediately.

We plan to keep the house, still current on that. Now that were not paying cc's, we can pay the house note.

Thanks for chiming in, you sound like you did exactly what I'm thinking of doing. Did you hire a BK attorney? Did you consult with him before you stopped paying or after? I'm thinking of just cutting off our home phone.

I too want to keep the house. If I stop paying the CC's first so that I can stay afloat with the house, is it worth it or should I just stop everything, since our credit is going to tank anyway and build up a little cash for a month or two while we sort things out?

[eventsdj]

We meet with our atty in Sept. retained her (we really liked her right away) and stopped paying (per her advice) that day.
She took a look at everything and decided we were fine to file right away, but we waited until Nov. 21st (no particular reason).

A good atty. is a must. We are in a small town, and our atty. knows all the trustees, judges, etc. and we felt good with that (over going with a BIG firm, the kind you see on TV)
We are in Wisconsin and paid $1299, which included our filiing fee. This was the ABSOLUTE last of our savings, we now have $150.

Livin on cash takes some getting used to, just today my microwave broke. Now its putting away $50 here and there till we can buy a new one, but it still feels better than charging one.

As far as the house, if you plan to keep it, my understanding is you must be current, and stay that way through the process, but hopefully someone else will have more info. on that.
We never can pay by the 1st, we always have to use our 15 day grace period.

[BKInLA]

We meet with our atty in Sept. retained her (we really liked her right away) and stopped paying (per her advice) that day.
She took a look at everything and decided we were fine to file right away, but we waited until Nov. 21st (no particular reason).

A good atty. is a must. We are in a small town, and our atty. knows all the trustees, judges, etc. and we felt good with that (over going with a BIG firm, the kind you see on TV)
We are in Wisconsin and paid $1299, which included our filiing fee. This was the ABSOLUTE last of our savings, we now have $150.

Livin on cash takes some getting used to, just today my microwave broke. Now its putting away $50 here and there till we can buy a new one, but it still feels better than charging one.

As far as the house, if you plan to keep it, my understanding is you must be current, and stay that way through the process, but hopefully someone else will have more info. on that.
We never can pay by the 1st, we always have to use our 15 day grace period.

Thanks for the info, especially on the house note. We too have been having to pay on the 15th. Last month was the first time we had to wait till the 30th, which resulted in a $200 charge but we had no choice. At least it won't go on our credit history though.

[keepmine]

If, you intend to keep the house stay current on the mortgage and let all the unsecured debt go. Stop paying anything that will be discharged in bk because, that's just money down the proverbial rathole.
Use the paymets you were sending to the cc's for your hh and other living expenses.
Of course, stop using those cards.

[keepmine]

I saw your post on Fatwallet and I wish you'd have posted all that info here. Your income of $4K a month won't support a near $3K a month mortgage even if you discharge all your cc debt.
With all the ongoing medical expenses and your wife's inability to work for awhile you'll be a lot better off letting the house go.
You'll need a huge adjustment in your mortgage to get it anywhere near affordable.

[forgotten]

I saw your post on Fatwallet and I wish you'd have posted all that info here..

He posted on FWF? Let me guess, the advise was "pay your bills, deadbeat."? It is the only form of advise you can get there.

[Overmihead]

We are in a similar situation with a fairly high mortgage in comparison to our current (reduced) income. Without CC payments, we will be able to make it as soon as the salary returns to normal...but we don't know exactly when that will be. In the meantime, we would need to bring in another $400/month to get by without CC payments. We're trying to figure that out. We, too, have been juggling things and increasing debt to get by for the past 5 months. We had enough room left on it and had to use CC last week for propane...which is an absolute necessity for heating the home & water and using the gas range....but other than that, have quit using them. I think staying current with the mortgage (if you want to keep the house) seems to trump everything else, as others have said. This is our top priority, along with food & basic necessities.
The advice I was given was to quit using the CCs and then start researching BK attorneys. You don't want to use CCs at all once you officially start the process by seeing an attorney. We have looked up a few attorneys in the area, but will probably not schedule a consultation until next month.
There are some wonderful, friendly people here and a wealth of information. Good luck!