A rock in a hard place!!! Need advice!!!

[drestless]

Couple things. I tend to "think" out loud so my thoughts may be jumbled.

First of all, I don't think there is any way you will qualify for a ch.7 bankruptcy. Like SMinGA said, you will probably end up being a ch.13 paying back 100% of your debt over 5 years.

If you choose to file ch.13 bankruptcy, it would be wise to wait until you have your baby because you will then be allowed higher expenses in your budget (an extra person in the household, higher medical expenses, daycare fees, etc), which will serve to reduce your monthly plan payment.

You can stop the credit card payments now, however, if you end up in 100% payback plan, you will still be responsible for the accruing interest & fees from now until you file, which could increase your payback during your plan. However, once you file, all fees & interest stop accruing. Whether you wish to stop paying now is your choice. Most people filing bk are NOT in a 100% payback plan, so it makes perfect sense for those people to stop paying towards the debt immediately, but in your case, it may or may not be a good idea. It's up to you to decide.

Since you are in CA, you have a good set of exemptions. Both of your cars can be fully exempted and are safe. No need to sell them. You can also save up some cash on hand as an emergency fund. There is a $21k wildcard exemption in CA that you can use to exempt any property including cash.

As is always suggested, meet with 3-4 attorneys to go over your options.

GL in your journey and keep us posted on your progress.

Yeah I think I'm chapter 13.

What would delay filing? If I find an attorney this week can it be filed in a week span or theres a staging process?

Are you referring to the two cars we are paying still? Or the two cars that is paid off already? This wildcard law applies to chapter 13 aand 7? But wouldn't the creditors garnish my money in the bank if I have that much?

You think the interest and fees will be more than $200 a month on a $9,000 credit card? Coz if the interest is lower than that then I might choose not to pay coz I will endup paying less on interest than paying the $200 minimum monthy payment.

Yeah I'm still looking for lawyers. Do you have any recomendation in Riverside, CA? Someone who's been tested?

[momofthree]

What would delay filing? If I find an attorney this week can it be filed in a week span or theres a staging process?

You can file at any time you want. You can walk into an attorney's office with your paperwork and file within 2 hours on an emergency basis if you wanted to. However, many people find it beneficial to strategically plan out their bankruptcy. Rush filings are normally only done if someone is about to lose their house or have their wages garnished. You don't appear to be in either of those situations, so it would probably be best to delay filing as long as possible in order to fully plan it out to maximize your financial benefit.

Are you referring to the two cars we are paying still? Or the two cars that is paid off already?

All of them. As long as your total equity is less than $23k-ish (covered by auto exemption and wildcard), you can keep all the vehicles without any problems.

This wildcard law applies to chapter 13 aand 7?

Yes and no. Both chapters use the same set of exemptions, but it is used differently depending on what chapter you file. For chapter 7 (also known as a liquidation bk), anything non-exempt can be seized by the trustee, sold, and the proceeds distributed among your creditors. In a chapter 13, you are allowed to keep those non-exempt assets, but the total of non-exempt assets signifies the minimum amount that you must pay to unsecured creditors in your plan payments. In other words, when you file chapter 13, they use the exemptions to make sure that your creditors get as much as they would if you filed chapter 7 and all of your non-exempt assets were liquidated.

But wouldn't the creditors garnish my money in the bank if I have that much?

Not until they get a judgment against you (sue you in court). You easily have at least 6 months of not making payments before they even initiate this step. Some on this forum have gone over a year without making payments and not had any legal action taken against them...

[SMinGA]

If you go to an attorney with: 6 months of check stubs, bank statements, details on debts and assets and budget - and attorney's down payment + filing fees then a ch. 13 case could be filed pretty quickly. However, rushing in would not be something I recommend. Best to take time and make sure its done correctly.

Keeping assets is normally not a problem in a ch. 13. You still get the benefit of your state exemptions. If you own anything above the exemptions, it just means you need to pay at least that much to unsecured in your plan. Since you'll likely may most (maybe all) of your debts if you file, you should be able to keep your vehicles, etc.

No one can garnishment your wages or bank account without first filing a lawsuit and obtaining a judgment.

[drestless]

You can file at any time you want. You can walk into an attorney's office with your paperwork and file within 2 hours on an emergency basis if you wanted to. However, many people find it beneficial to strategically plan out their bankruptcy. Rush filings are normally only done if someone is about to lose their house or have their wages garnished. You don't appear to be in either of those situations, so it would probably be best to delay filing as long as possible in order to fully plan it out to maximize your financial benefit.




All of them. As long as your total equity is less than $23k-ish (covered by auto exemption and wildcard), you can keep all the vehicles without any problems.



Yes and no. Both chapters use the same set of exemptions, but it is used differently depending on what chapter you file. For chapter 7 (also known as a liquidation bk), anything non-exempt can be seized by the trustee, sold, and the proceeds distributed among your creditors. In a chapter 13, you are allowed to keep those non-exempt assets, but the total of non-exempt assets signifies the minimum amount that you must pay to unsecured creditors in your plan payments. In other words, when you file chapter 13, they use the exemptions to make sure that your creditors get as much as they would if you filed chapter 7 and all of your non-exempt assets were liquidated.



Not until they get a judgment against you (sue you in court). You easily have at least 6 months of not making payments before they even initiate this step. Some on this forum have gone over a year without making payments and not had any legal action taken against them...

I assume that time to start to strattegically plan the BK is after consulting with a BK lawyer because how would a regular joe know how to strategize for BK. Is this a correct assumption?

About the delaying it until we have the baby. Is it possible to report a pre-emptive report on what it will probably cost and include it in the file even before we have a baby? I really can't pay the credit cards anymore but maybe I can slowly struggle and wait but I want to start saving now for my baby and also not throw around $1200 a month if I'm gonna file it for BK anyway. Please help me have a basis to assist me to decide if I can do it now or wait until we have our baby. Thank you.

[SMinGA]

As far as I know, you can't include expenses for what might happen. But if in a ch. 13 plan and your situation changes, you can have it amended.

"Strategic" timing could include things like waiting until one of your creditors files a lawsuit. (Could take 3-6 months of nonpayment, or longer. Some never have a suit filed.) Or if your income fluctuates or you're close to the median, waiting so that the 6 month look back has lower numbers. Such as by avoiding overtime.

[drestless]

If you go to an attorney with: 6 months of check stubs, bank statements, details on debts and assets and budget - and attorney's down payment + filing fees then a ch. 13 case could be filed pretty quickly. However, rushing in would not be something I recommend. Best to take time and make sure its done correctly.

Keeping assets is normally not a problem in a ch. 13. You still get the benefit of your state exemptions. If you own anything above the exemptions, it just means you need to pay at least that much to unsecured in your plan. Since you'll likely may most (maybe all) of your debts if you file, you should be able to keep your vehicles, etc.

No one can garnishment your wages or bank account without first filing a lawsuit and obtaining a judgment.

I asked Momofthree as well but I alway hear the comment to make sure to take time and do it right. I assume this is after meeting a lawyer and given a todo list on start preparing for the BK. Is this correct?

I saw in your signature that your file has been declined. I assume your not paying any of your unsecured debts anymore, is this correct? If yes, aren't you getting any garnishment judgement since the initial BK request has bee declined?

Maybe I'm reading your signature wrong though...

[drestless]

As far as I know, you can't include expenses for what might happen. But if in a ch. 13 plan and your situation changes, you can have it amended.

"Strategic" timing could include things like waiting until one of your creditors files a lawsuit. (Could take 3-6 months of nonpayment, or longer. Some never have a suit filed.) Or if your income fluctuates or you're close to the median, waiting so that the 6 month look back has lower numbers. Such as by avoiding overtime.

I'm not understanding why I need to wait until one of my creditors files a lawsuit? Isn't this gonna cause me to rush the BK? What's the advantages of waiting for them to pursue? Thank you soo much for all the inputs.

[SMinGA]

That idea is based on not filing until you're forced to. And in the meantime, using $ (which you have because you're not making credit card payments) where you actually need it. When paying the credit cards, its easy to get into a cycle of skipping out on necessary items for the sake of making minimum payments. So before filing is a good time to use excess funds on things like neglected medical care, home/car repairs, etc. Even saving for the attorney fees for filing, and a cash fund. (For a ch. 7, its important to make sure that you have an exemption available to cover such a cash fund, not as essential in ch. 13 when you know you'll be able to pay a decent amount to unsecured.)

I'm not understanding why I need to wait until one of my creditors files a lawsuit? Isn't this gonna cause me to rush the BK? What's the advantages of waiting for them to pursue? Thank you soo much for all the inputs.

[JEM]

I'm not understanding why I need to wait until one of my creditors files a lawsuit? Isn't this gonna cause me to rush the BK? What's the advantages of waiting for them to pursue? Thank you soo much for all the inputs.

We're basically waiting until we're "pushed" into filing. We hope to make it to Nov.

My husbands income fluctuates, so we've been teetering right over/under the median. We're hoping we can be right under when we file.

Plus, attorney's for a Ch 7 in our area were more than we'd originally anticipated, so it's going to take us longer to save because we've had some other unexpected expenses to take care of.

Many people wait to file so that they can get things in order like house repairs, their auto situation taken care of.

Or they are waiting for income to drop off.
Or to just get an idea of what their real expenses are for a few months without using CC's.

[blockhead]

I'm not understanding why I need to wait until one of my creditors files a lawsuit? Isn't this gonna cause me to rush the BK? What's the advantages of waiting for them to pursue? Thank you soo much for all the inputs.

If you got served today, God forbid, you'd have a 15-20 days or so to file a response, depending on the court, then you could file an affirmative answer, basically saying you cannot affirm or deny the debt based on info provided (which is normally minimal), and that should get you a court date a month or more in the future, so in reality you'd have a couple months to file..

[drestless]

That idea is based on not filing until you're forced to. And in the meantime, using $ (which you have because you're not making credit card payments) where you actually need it. When paying the credit cards, its easy to get into a cycle of skipping out on necessary items for the sake of making minimum payments. So before filing is a good time to use excess funds on things like neglected medical care, home/car repairs, etc. Even saving for the attorney fees for filing, and a cash fund. (For a ch. 7, its important to make sure that you have an exemption available to cover such a cash fund, not as essential in ch. 13 when you know you'll be able to pay a decent amount to unsecured.)

Got it. This will be good time to save for our baby...

I already have money for the atty if it's below $6,000 from tax returns. Is it safe if I just withdraw my extra cash in the bank so they can't see it or it will be questioned in the future?

Also, if we wait until we will be forced my worry is we won't have time to meet and discuss the plan with an atty or is this something that shouldn't be a big deal? Thx!

[drestless]

We're basically waiting until we're "pushed" into filing. We hope to make it to Nov.

My husbands income fluctuates, so we've been teetering right over/under the median. We're hoping we can be right under when we file.

Plus, attorney's for a Ch 7 in our area were more than we'd originally anticipated, so it's going to take us longer to save because we've had some other unexpected expenses to take care of.

Many people wait to file so that they can get things in order like house repairs, their auto situation taken care of.

Or they are waiting for income to drop off.
Or to just get an idea of what their real expenses are for a few months without using CC's.

So I maybe in the same boat as you though I don't think I can be categorized in Chapter 7 UNLESS I got downsized...

What fees are you getting so far on credit cards for non payment?

[drestless]

If you got served today, God forbid, you'd have a 15-20 days or so to file a response, depending on the court, then you could file an affirmative answer, basically saying you cannot affirm or deny the debt based on info provided (which is normally minimal), and that should get you a court date a month or more in the future, so in reality you'd have a couple months to file..

It's good to have this insight. Thank you.

How long after not paying will credit cards before somebody can get served?

[SMinGA]

By 'forced' I don't mean that anything will happen overnight. As someone else explained, there are procedures that take time. If you get a notice of a lawsuit you'll have 30-60 days (possibly more) to file. In the meantime, you can meet with a few attorneys to decide who to hire and from there decide how its best for you & your family to proceed.

How long to get served? Very unlikely to happen before 3-6 months of nonpayment. Other than that it is impossible to say as there really does not seem to be a predictable pattern. Some people never get served.

As to withdrawing cash to hide - there is no need to hide things. Trying to do so could cause more harm than good. As I've mentioned in this thread multiple times: your assets really are not in danger. People file ch. 13 because it allows them to save/keep assets. Trying to hide things, especially when you don't need to, could just make a trustee look deeper and could result in fraud allegations.

Atty fees for a ch. 13 will (at best guess) be in the $3000-7500 range. Some require it all upfront, others require some upfront and put some into the plan. It varies from district to district, and of course complicated cases may be in the higher range. A competent atty will anticipate putting more work/time into a complicated case than a basic one so should charge accordingly. If you choose an attorney simply based on price, you may regret it!

[JEM]

So I maybe in the same boat as you though I don't think I can be categorized in Chapter 7 UNLESS I got downsized...

What fees are you getting so far on credit cards for non payment?

So far, interest accruing and late fees in the range of $39. We have quite a bit of unsecured debt though, probably nearing the $100K mark when fees are all said and done at the end. Even IF we got pushed into a Ch13, we'd never be anywhere close to a 100% payback, so I'm not too worried about it.

We stopped paying in December, so I'm nervous because we're getting to a critical area. We live in a no garnish state, but I worry about bank accounts though.