Looking for suggestions...

[MILH0U5E]

My wife and I finally faced the fears and decided to pursue filing for BK... Now we just don't know how to proceed... Quick rundown:
- 1st Mortgage is around 140k, payments were 1100 (have made no payments in 8 months)
- 2nd Mortgage (Home Equity Credit Line) is around 94k, payments were about 998 (stopped making payments in Novemeber).
- With the above facing us, we've decided to walk away and move outta AZ
Now the tricky part...
- I moved for a new job and the rest of the family will be moving in 2 weeks...
1. I'm planning on filing in our new state, is this the best thing to do (after 90 days, as I've been told that is what is necessary)?
2. By walking away from the home, is this a positive or negative thing to do in terms of filing BK?
- Our total CC debt is 38k, I've been in debt counselling for years having paid 2 cards completely off. My wife is unemployed (let go by the schools) so she is way behind on payments. But was enrolled and making payments in counselling too.
- we have one car payment that is around 370 a month, and is current.
3. Should I be looking at C7 or C13? I don't wanna go to a lawyer with no ideas what is best, so any help would be appreciated.

[SMinGA]

7 vs. 13 really depends on the equation Net Income - Expenses. Not counting credit cards and anything else you'd be giving up in the filing, that is. If there is little or none remaining: ch. 7. If you have money left to make some sort of monthly plan payment: ch. 13.

From what you've stated, letting the house go in the bankruptcy seems like the only smart thing to do. No chance at selling it unless it has decent equity - and that is rare these days!

You will be able to file in the new state once you have lived there for 91 days - majority of time from the prior 6 months. You would not use the new state's exemptions though. Here is how that works:

1. If you've lived in current state for 2+ years, use current state exemptions.
2. If 'no' to #1, use exemptions for the state you lived in for the 2 years prior to the most recent 6 months. So 6 months to 2 1/2 years before filing.
3. If the 2 year period in #2 was not all in 1 place, I get a little fuzzy on the time frame but I think its where you were the majority of the time from 2 1/2 to 3 years prior to filing. If no majority anywhere (like you lived in 3 states with no state have 3+ months) then use federal.

The rule about which exemptions to use changed in 2005, to prevent people from setting up an address in a state with generous exemptions just to be able to claim them. Before I think it only took 6 months to use those exemptions. Maybe even majority of the 6 months before filing?

[MILH0U5E]

You're awesome, thanks so much for the quick reply.