My Story.....is this really my life?

[ohantonio]

I've been a watcher for quite awhile & read some of the good advice on the forum and decided that I will ask for suggestions on my situation.

I've been married for about 10 years with 2 kids. Unfortunately, i've always been the one in charge of paying the bills in the household and she just wanted to turn a blind eye to anything. Until this month, both of our credit scores were above 700, but I expect a big change next month. I didn't want to actually face it, but we have been operating at a negative each month for a long time. There was always something to keep us going, a tax refund, a stimulus check, an insurance claim that we pocketed a little money on, always something until this year. For the first time ever, we owe on our taxes in the amount of $1200. I decided that this was going to be the month where something didn't get paid, frankly because there wasn't anymore money besides the paycheck every 2 weeks. It was so hard to do, I felt so bad, but it had to be done. I totaled up all that we owe and was shocked to see that we owed $65k in CC and still owed $14 in student loans, accounting for $2k a month, just making the minimum payments. We are current (well within the same month) on our mortgage and owe roughly $116k on the house that is worth $150k or so. We recently leased 2 new cars because our other vehicles were also leases that were way over on mileage, so the only way that we could get rid of them w/o having to give them the vehicle and $5k that we didn't have, we rolled it into new ones.

Prior to my decision to stop paying this month, the only way that we could make some payments on time depending on their due date was selling gift cards on an auction site (stupid...yes I know, but cheaper than payday loans) and waiting until I got paid to buy them and send them out. We both have full time jobs and make decent money now, but all of this debt was accumulated back many years ago and we've been paying minimums and not making any progress on the balances.

On top of all of our financial obligations, I am ready to move out of the house because of some other problems within the household that are for another type of website. If we did file bankruptcy, it would only make sense to file before getting divorced so we could save money and make it easier to split whatever is left. It's really sad when you have a very good reason to leave a marriage, but you just can't afford to do what is right. I look at some of the decisions that i've made in my life and ask myself, "what we're you thinking?"

[SMinGA]

I am the one in our household that handles the finances. From time to time, hubby says he wants to be involved but when I try to keep him informed he really is not interested. It was hard for him to adjust to the thought that he can't just go out and buy/do whatever he wants - and ultimately what brought him around was the realization that if we lose our home there would be no place to put that stuff.

I don't know if there is a way to work thru things with your spouse. I would say that if finances are the bulk of the marital stress, then BK may help. But if that is not it - then filing a joint BK could be a problem. Do you have any idea whether you would be a ch. 13 or ch. 7? A ch. 13 goes on for 3-5 years. If you are going to separate, then doing so before the 13 is important since your budget is set. You can't very easily adjust to having living expenses for 2 different households. If you're eligible for ch 7, then doing that as joint probably makes sense - because its over in ~3 months.

[ohantonio]

Too much damage to work through now, it's hopeless. She is trying to blame all of the debt on me. We make decent money now, but it all goes to old debt. I tried to explain to her that she wanted to live a certain way and it was hard when she was making so little at the time. We are a little above the limit for our state, but with the exemptions, it seems to work for Chapter 7. By the middle of May, we should have a little bit of cash to pay the retainer attorney fee.

I would like to avoid C7 if possible. The only way would be to possibly sell the house and splits the profits. Even with paying off some of my debt, I don't think that I could afford child support, a new place to call home & the remaining bills that I would have.

[SMinGA]

If there is no way to resolve the marriage, then I hope things can at least be civil for the sake of the kids. Perhaps the only way for her to move forward is to hit bottom and not have you there to soften the blow?

Can only imagine how difficult the coming months will be as you sort it out. Best of luck to you!

[killinstinct]

Let the unsecured debt go if you can't pay and filing seems inevitable (sounds like it is). The cards won't start to take agressive legal action for at least 6 months of non payment. Pay your attorney instead and refer creditors to him/her.

[sofarsogood2]

Too much damage to work through now, it's hopeless. She is trying to blame all of the debt on me. We make decent money now, but it all goes to old debt. I tried to explain to her that she wanted to live a certain way and it was hard when she was making so little at the time. We are a little above the limit for our state, but with the exemptions, it seems to work for Chapter 7. By the middle of May, we should have a little bit of cash to pay the retainer attorney fee.

I would like to avoid C7 if possible. The only way would be to possibly sell the house and splits the profits. Even with paying off some of my debt, I don't think that I could afford child support, a new place to call home & the remaining bills that I would have.

You can keep your house thru a 7 as long as you keep making the payments, then sell it after.
Best wishes.

[catleg]

You need to do a complete analysis. A few thoughts:

What is your state of residence, household size and joint income?

You may be able to qualify for a ch7 and exempt the home equity.

You are probably best advised to stop paying credit cards and send that money to pay off student loans instead. You can't discharge them, they're the worst.

Could you support your lifestyle on a cash basis? Not that you have much choice, that's where things are going anyway. Knuckle down for about 12 months, pay nothing to credit cards, pay off the student loan, and then file chapter 7 and keep the house, would be my plan.

[catleg]

I realized after posting this that if you qualify for the chapter 7 there is no benefit to waiting for it, so you can do this anytime.

[ohantonio]

Thanks for all of the advice. I was aware of the student loans not being included, but didn't think to pay the extra (when I start to get caught up) towards them. They are currently on a hardship forbearance.

One concern that I have is that my bank is Chase and we have 3 CC's with them, 2 old Providian which are now chase & 1 original chase. These were recently setup on a BLP and I haven't made the payment yet this month. I just don't want Chase taking money out of my checking account after we get paid. Thinking about changing banks to someone that we don't owe.

[blessed]

I see a few similarities with your story and mine. I'll tell you what we did and take from it what you wish.

First, change banks. Get a new checking and savings with a bank who you do NOT owe money to. This was hard for me to do because I had all of my account info memorized and I honestly liked my bank and their online system. BUT, changing was an easier choice then letting them freeze or take money that I desperately needed.

Second, meet with 2-3 attorneys for a free consult. Gather 2008-2009 income tax info, pay stubs and your CC statements. Let them tell you what they would do for you, ask questions, find out how much they would charge and how fast they could move if you want this done and over with. (Ours kept saying she'd move as fast as we wanted to and with my good homework skills it was an easy process as far as paperwork went.)

Third, and this is after an attorney tells you that you qualify for chapter 7, don't give another dime to any unsecured creditors. Use that money to live or pay utilities, attorney fees, necessary items.

If I wanted a divorce before we came to the conclusion that we NEEDED to file I couldn't have done it. I would have walked away with so much debt and wouldn't have been able to afford rent or money just to live. I can see how that would make a fresh start and allow for you to finalize separate households if that's the path you're taking. GL!

[hrs1980]

Well I am one month in since I skipped my first of many credit card payments in April. It really sucks that I have never been 30 days behind on anything, but this was the end. I have been getting caught up on the mortgage, car payments, utilities and such, all of which I usually paid about 10 days late or so due to pay schedule and living paycheck to paycheck. I have simply unplugged my home phone and set my voicemail to send me an email each time I receive a new voicemail (UVerse). I feel bad, but when I really look at it, each of those creditors has made their money back and then some.

A funny & disturbing clip from Family Guy last night:

http://www.fox.com/watch/familyguy/8...t=331&stop=354

[feelingnutsy]

I think that what most likely shocked me into realizing what I was
paying out to CC's/unsecured creditors was when a very well-qualified
debt counselor took stock of the figures that I had given her in our in-
terview---and she saw I couldn't cut any more from my budget---and
then said---you probably have already paid for everything you charged.

[ohantonio]

After nearly a month of skipping some payments, I still don't have any money in the bank. Not exactly sure how we lasted as long as we did. Get paid this Friday and should be totally caught up on all car payments, utilities, mortgage and such. Maybe by the end of the month I will have the cash to hire an attorney. First the bankruptcy attorney, then the divorce attorney.

[scrapiron53]

I asked this in another thread so move this one if placed wrong.

How long should I wait to file Chpt.7 If I do it now it will look like too much income to meet the median income. If I wait 6 more months for the look back after June, so actually 7 months it will look like I'm buried in debt. How long can i go before the creditiors really get tough with collections? I'm only 1 month behind so far. The calls have started and I send one collector a Cease and Desist letter. Capitol one already tuned over to collections a $10k debt after missing one payment.

[ssmdem]

After nearly a month of skipping some payments, I still don't have any money in the bank. Not exactly sure how we lasted as long as we did. Get paid this Friday and should be totally caught up on all car payments, utilities, mortgage and such. Maybe by the end of the month I will have the cash to hire an attorney. First the bankruptcy attorney, then the divorce attorney.

I hear ya! This will be our first month missing our house payment and in working out my budget, we've got $200 at the end of the month - which more than likely got wiped out yesterday by an unexpected medical bill that my husband is on the phone right now arguing with the insurance company over. It's amazing how fast your eyes are opened when you quit depending on those credit cards.