Currently in debt consolidation and breaking even. Will be losing job soon. Advice?

[bodine1231]

Hi,thanks for all the great posts. I spent about 5 hours tonight reading here and it's all been a wonderful source of information.

I have been enrolled in a debt consolidation plan through MMI for 16 months now. While it has been great and they've reduced my debt (some of it),I am only barely breaking even after paying them and my other monthly expenses. I am not behind on any payments with them and other debtors (they weren't able to consolidate everything) and the only secured debt I have is a car I financed a year ago. All told I owe about 20k in unsecured debt and another 12k with the car (which I need to keep). I make just below the means test to file for Ch.7.

I am currently working 2 jobs (80+ hrs a week)one full time one part. I found out that there is a VERY good chance our location will be closing and I'll be out of work,could be 1 month could be 6 but it is going to happen. This is my main job that I got through a friend so if/when I lose it I'm going to have to take a significant pay cut because I was unqualified and he vouched for me.I'm already burning the candle at both ends to stay afloat and the prospect of working 90hrs to get by frightens me.

My question is should I file for Ch.7 now or wait until after I lose my job? I'm scared that I won't be able to pay my rent and car note after I get laid off because I have nothing saved up. I also will have to pay ~400.00 in taxes this year and god forbid if my vehicle breaks down,I have nothing saved for that. Just freaking out a little.

Any advice would be greatly appreciated.

[AngelinaCatHub]

I've never seen any of those consolidation places pan out. Most are getting your money and token of payment to your debt. Scams!

If you are going to C7, stop paying them all (except the car and rent) and start emergency account but keep it lower than $600. Once you file you will have to declare it, but If all you own is a car, it would probably be exempt. Keep yourself working as long as you can and after your 341, save like crazy. Everyone should have a bit of an emergency account for the reasons you mentioned. We use no credit and carry a $100 bill in our wallets in the event our debit card fails (due to not enough in the account) we won't be embarrassed paying a restaurant bill or gassing the car to get home. Never had to use it in that way, but it is a good feeling to have it as insurance.

Sounds like you have it together but get rid of that debt company. Save all you can starting NOW. 'Hub

[keepmine]

First thing you do is stop paying all unsecured debt. Use the money you were sending to the cc's to live on.
Next, put on a full court press right now to find another job. Once your finances get stabilized then you can consider bk as an option.

[bodine1231]

I've never seen any of those consolidation places pan out. Most are getting your money and token of payment to your debt. Scams!

If you are going to C7, stop paying them all (except the car and rent) and start emergency account but keep it lower than $600. Once you file you will have to declare it, but If all you own is a car, it would probably be exempt. Keep yourself working as long as you can and after your 341, save like crazy. Everyone should have a bit of an emergency account for the reasons you mentioned. We use no credit and carry a $100 bill in our wallets in the event our debit card fails (due to not enough in the account) we won't be embarrassed paying a restaurant bill or gassing the car to get home. Never had to use it in that way, but it is a good feeling to have it as insurance.

Sounds like you have it together but get rid of that debt company. Save all you can starting NOW. 'Hub

I will say that the company I've been using for the DMP (MMI) has been great. Ever since joining all the cc's have been paid on time and I haven't had any calls or anything in 16 months. Of the credit cards that they were able to consolidate in the 16 months they've paid 6k of it off. It's just that I'm living paycheck to paycheck (actually I come out +150.00 a month if I never leave the house) but when this job goes I will definitely have to miss payments on things and I was seeing if it would be better to get the BK out of the way before that happens.

[Pandora]

I will say that the company I've been using for the DMP (MMI) has been great. Ever since joining all the cc's have been paid on time and I haven't had any calls or anything in 16 months. Of the credit cards that they were able to consolidate in the 16 months they've paid 6k of it off. It's just that I'm living paycheck to paycheck (actually I come out +150.00 a month if I never leave the house) but when this job goes I will definitely have to miss payments on things and I was seeing if it would be better to get the BK out of the way before that happens.

The problem with using DSC's is that your credit takes a hit much harder than if you filed BK. You could be keeping that money in your pocket every month and not living paycheck to paycheck.

[bodine1231]

The problem with using DSC's is that your credit takes a hit much harder than if you filed BK. You could be keeping that money in your pocket every month and not living paycheck to paycheck.

Yeah that's true I guess. If I cut out all unsecured debts I'd be pocketing almost 750.00 a month.

[Mere]

I too considered going with MMI but the payment proposal was to high, I just didn't see it working out for us. I just retained an attorney today, and we will be filing a ch.13. I say once you get all of your ducks in a row, and a good game plan, you will feel better about filing BK...it's a hard idea to get used to but sometimes it is the only option.

I like Pandora's statement..."The problem with using DSC's is that your credit takes a hit much harder than if you filed BK"

Good luck, and welcome you will learn a lot here.

[Memphisbelle]

I started looking into chapter 7 a few weeks ago and I have been with MMI too for a year. They negotiated rates with several CC companies for me for deals I couldn't get from those banksters after trying myself... down 18% to 3%, $12% to 6% etc.. I paid them $26 month for that and paid off 1 yr on a five year plan. Trouble was I couldn't even really make that payment due to a reduction in my income now. My only regret, at this point, is why I didn't of think of declaring before I bankrupted myself trying to stick with that plan so long. So, I would declare while I still had money cause you need a bunch to file and those $'s are hard for me to come by now that I am completely broke cause I paid MMI too long.

[bodine1231]

I started looking into chapter 7 a few weeks ago and I have been with MMI too for a year. They negotiated rates with several CC companies for me for deals I couldn't get from those banksters after trying myself... down 18% to 3%, $12% to 6% etc.. I paid them $26 month for that and paid off 1 yr on a five year plan. Trouble was I couldn't even really make that payment due to a reduction in my income now. My only regret, at this point, is why I didn't of think of declaring before I bankrupted myself trying to stick with that plan so long. So, I would declare while I still had money cause you need a bunch to file and those $'s are hard for me to come by now that I am completely broke cause I paid MMI too long.

Thanks. That's the same thing I've been asking myself. If I try to tough it out and when my jobloss occurs I may not have the money to afford a lawyer like I could now. I'll go ahead and schedule a consultation and see what happens. I have a friend who recently filed and recommended me a good attorney here so hopefully things will work out.