Also new here, with questions

[confusedinok]

My husband and I are considering BK. It's obviously not something we want to do, but he's struggling with it more than I am. I, frankly, just want to be out of debt. Our story:

We just moved about 6 weeks ago. It was pretty much a lateral move financially because we had a 2nd mortgage on the other house. Our new mortgage is the same amount as the other 2 combined. We have 7 children and because of our family size, we shouldn't have any trouble with the means test. The deal is we owe about $48K in credit card debt. There are no new large amounts. One card, the minimum amount due jumped dramatically about a year ago. The minimums are killing us! There is no way to put anything aside for house or car upkeep, so everything goes on the card. It's a vicious cycle!

We own 2 vehicles outright. One a 95 honda with 180K miles and a 2005 12 passenger van. My husband is worried we would lose one of these.

Anyway, how would moving recently play into all this? Should we wait a bit if we decide to file? I would love to hear other's thoughts who have been down this road.

Thanks

[debee]

Did you sell the other house & then move into a new one of equal market value? Or did you move up (in terms of market value)? Did you put new money into the new house? I mean did you just use the cash from the sale of the first, or did you put in the 40K that Grandma left you in her will kinda thing?

In terms of the cars, from a quick look it seems you can exempt $7500 worth of equity per filer. The exemptions I scanned are here: http://www.legalconsumer.com/bankrup...T=OK#homestead

[keepsmiling]

Confused, welcome to the forum. Hopefully you will be less confused as you continue to read and ask questions.
Probably a dumb question, but gonna ask it anyway... is it safe to assume your previous home was also in OK? It's important.
As to the rest of your story... that's pretty much where we all wound up, in that vicious cycle. So you are in good company

[daylate]

Tell your husband to look at your finances as a business rather than a personal thing. It helps take the emotion out of it. I wasn't real thrilled with the idea at first but now I know it was/is the right thing to do. If you think it would help have him read this thread. http://www.bkforum.com/showthread.ph...hlight=regrets. Good luck to you.

[confusedinok]

Yes, our previous house was also in OK. We did move up in market value some, but didn't put much down. It's a rehab case and part of our loan included money to have some work done. When we bought our other house years ago, we rolled all the closing costs into the loan. We had planned on doing that again and using a large part of the equity to pay off the credit card with the highest payment. I guess they aren't allowing that anymore. We had to put much more down than we had planned. My husband is afraid they'll look at it and think we waited to move before we filed. That really wasn't our intent!

Debee, I'm glad you mentioned the "per filer" part. I've been looking at this as one, when actually there would be 2 of us filing. Both of our vehicles would probably be ok then.

Should we wait a bit before we consider filing? My husband really wants to stay in this house. It has his dream of property (not much) for his family. We looked at the homestead exemption and would be fine there.

Thanks for taking the time to help with the questions!

[debee]

What did you guys do with the house you left behind? Is it sold or going into foreclosure?

If you rolled all your available cash into a new house, walked away from your old house, and filed bankruptcy within six weeks, it doesn't look good. That doesn't mean you couldn't have a successful chapter 7 filing. It would probably be a good idea for you to start going in for free consultations with attorneys in your area.

[confusedinok]

We sold the other house. We had a 2nd on the other house which took most of our equity. We had planned on paying off some things with the rest of the equity, but ended up using most of that for closing costs on the new house. At this point, we're current on everything, but that probably won't last long.

[debee]

Ok, that's good.

The equity in your old house was exempt so rolling it from one exempt asset into another isn't evidence of bad faith. It's the extra money that went into the new house that might raise eyebrows. Absent an instigating event like job loss, medical, etc., it looks suspicious to roll all your money into an exempt asset six weeks before filing. Alot depends on your overall financial picture, the degree of 'upscale', etc.

That's why I would talk to an attorney, spell out your overall financial picture, any other recent money moves and see what she/he says. Might be no big deal, might be wiser to wait before filing.

Just curious, how much money that wasn't derived from the sale of your previous home did you put into the new one?

[confusedinok]

Nothing. The only money that went into the new house was the equity (and not much at that) from the old house.

[confusedinok]

As to the 'upscale' part, that's pretty laughable! The house is bigger than the old with more property, but it was a bank owned house that had been a rental for many years. It's had foundation repair done that's left cracks in the walls, etc. It needs a lot of work. After we put some work into it, it'll be nice, but it sure isn't there yet.

[debee]

I think you're fine then. You just moved. No big deal.

[debee]

Also, it sounds like you won't have to worry about the homestead exemption reduction. (It reduces from "unlimited" to around 135K if the house was purchased within the 3 years or so before filing).

[confusedinok]

That gives me some hope. Now if I can just convince hubby that this isn't such a bad thing. It really could be a good thing for us.

[confusedinok]

We have an appt on Tuesday. Off to gather my paperwork....

[debee]

Wishing you the best of luck at your app't. See you when the next question comes up.