Thinking of Filing BK

[buzzstpoint]

We may be at that point for filing.
Our CC debt is out of had and we can barely stay afloat.
None of our bills are in collections but a couple are past due and making the minimum just to keep the utility turned on.
Just an example. After I paid the mortgage, phone, my cc's and auto insurance I had 22 dollars.. Oh. scratch that because I have to get gas for my car too. My wifes paycheck is the same thing.
We called for debt consolation and got turned down for that. My bank with our mortgage wont help either. Virtually no equity in our home either.
Hearing bad stories about the Debt management plans from credit counselors I'm not sure that the right path for us either.

We have about 25K -28K in CC debt.
We own a house that's worth around 68K-74K depending on who looks at it, 3 vehicles that are worth less then 2k each. One of the cars was going to be totaled by an insurance company but we kept it.

So I was wondering which would be better? Ch 7 with exemptions, ( We want to keep our house and cars) or Ch 13?
We have a list of question for a BK attorney tomorrow but he is only giving us 30 minutes. With all my questions I don't think that will be enough time..

Oh, we live in Wisconsin.
Another thing that kinda worries me is the attorney fees, If they wont do a payment plan, I may have to file by my self.. (Can't even afford an hour of a lawyers fee)

We haven't even begun this process and already are stressed out..

[keepmine]

To start with, stop paying all debt you wish to discharge. Use that money for legal fees and HH living expenses. Don't get hung up on keeping the house if, you're signficantly underewater or, have a bad mortgage.
Wi. has some pretty generous exemptions. File the Chapter 7 and be done with it.

[buzzstpoint]

We dont want to lose the house. Our mortgage is current and never fell behind on it.

[drowning123]

Whatever you do, DO NOT reaffirm the house, but you can continue to pay the mortgage. Include the house in your Chapter 7, DON'T reaffirm, but keep paying the mortgage. If you should ever fall behind in the future, you can just walk away without any liability.

[jeep75]

How much equity you have in your house and for your state whether or not you are above or below the median income vs allowed and actual expenses for a family of your size are the two big factors in decided what chapter to file.

Fees for a lawyer average for a ch 7 seems to be about $1500, we paid $2000. For a chapter 13 it is about double but paid in the plan.

Also don't be stressed out, your story is similiar to ours, we were paying $1000's a month to the credit cards and then having to use them again shortly after paying. Filing with be a relief.

[lillymarlene]

Here's another few questions to help in deciding which chapter. Are you also current on your mortgage? Are you current on your taxes? What is your states automobile exemption, and will you be able to keep all 3 cars?

Some people for example, are able to spread out old taxes in a 13.

[buzzstpoint]

We are complely current on our mortgage, That has always been the 1st bill I pay before any other with the thought if things ever did get bad I would still have a house. Taxes are paid up to date (Rolled into my escrow with my mortgage payment)

As for equity. From my city assesor office website it lists my house a "Estimated Fair Market Value: 69600" When I bought the house it was valued at 72000 and I paid 74600. I owe a little over 68,000 on the mortgage now. So If I understand equity, then I have none.

As for the median income,, from what I have read we are well below the median income for WI. The Homestead exemption is 75,000 and the auto part is what I'm confused about. How do they figure the prices for the autos? KBB? or what we bought them for?



We have a meeting set for Thurs now for a lawyer for a free visit.

[LadyInTheRed]

We have a list of question for a BK attorney tomorrow but he is only giving us 30 minutes. With all my questions I don't think that will be enough time..

You can probably get a lot of your questions answered here to make that 30 minutes more productive. Because of this board, most of the questions I asked attorneys at consultations were to confirm or clarify what I learned here or help decide which one I wanted to hire. Read the stickies in the various forums and then come back to this thread and post whatever questions you still have. I realize it's getting late and you don't have a lot of time, but those of us who are logged on will do our best to answer what we can.

It will help to answer your questions if you tell us your household size, your gross household income, your monthly mortgage payment, and the balance of your mortgage(s).

Do not hire the attorney tomorrow. Consult with at least a couple others first.

[LadyInTheRed]

We are complely current on our mortgage, That has always been the 1st bill I pay before any other with the thought if things ever did get bad I would still have a house. Taxes are paid up to date (Rolled into my escrow with my mortgage payment)

As for equity. From my city assesor office website it lists my house a "Estimated Fair Market Value: 69600" When I bought the house it was valued at 72000 and I paid 74600. I owe a little over 68,000 on the mortgage now. So If I understand equity, then I have none.

As for the median income,, from what I have read we are well below the median income for WI. The Homestead exemption is 75,000 and the auto part is what I'm confused about. How do they figure the prices for the autos? KBB? or what we bought them for?



We have a meeting set for Thurs now for a lawyer for a free visit.

We were posting at the same time. For some reason, I thought you were meeting with an attorney tomorrow. You have lots of time to prepare!

If you are under median and current on your mortgage, a Chap 7 shouldn't be a problem.

Your cars should be valued at current market values. My attorney used KBB private party value and the trustee didn't object. But, others have said their trustees insisted on using NADA's retail value. This is a good question to ask at consultations. If the website I looked at is accurate, you can use federal exemptions in WI. Assuming you are correct about the value of your home and don't have other assets to use the wild card exemption, you should be able to exempt the cars.

[buzzstpoint]

Sorry I was wrong about tomorrow. that was the deadline for him to give us a meeting date. Which is now Thursday afternoon. I figured on calling a few attorneys.

As for the extra details.
Family of 4 (We have 2 boys)
Our gross Monthly income is about 3750 (fluctuates a little)
Monthly mortgage payment is $618.00 But I pay $620.00
Balance on Mortgage is: $67,987.49
Estimated Fair Market Value: $69,600.00
Cars we have are: 1995 Chev pickup (bought for 300 put in 500 for transmission, Rusty but trusty)
2000 Saturn with a crunched rear quarter panel
2000 impala with that was totaled out from an accident we had, but I kept the car instead of turning it over..
My wife has a 401K with about 2000 in it. Then our personal possessions.

[LadyInTheRed]

As you already know, you are well below the $77,438 median family annual income for a family of 4 in Wisconsin.

It doesn't sound like you will have any problems exempting all of your assets.

I believe the following is a current list of the federal exemptions (many websites that list exemptions don't keep them updated). I've bolded what I suspect is most likely to apply to you:

Homestead:

522(d)(1), (5) - Real property, including mobile homes and co-ops, or burial plots up to $21,625. Unused portion of homestead, up to $10,825, may be used for other property.

Personal Property:

522(d)(2) - Motor vehicle up to $3,450.

522(d)(3) - Animals, crops, clothing, appliances and furnishings, books, household goods, and musical instruments up to $550 per item, and up to $11,525 total.

522(d)(4) - Jewelry up to $1,450.

522(d)(9) - Health aids.

522(d)(11)(B) - Wrongful death recovery for person you depended upon.

522(d)(11)(D) - Personal injury recovery up to $21,625 except for pain and suffering or for pecuniary loss.

522(d)(11)(E) - Lost earnings payments.

Pensions:

522(b)(3)(C) - Tax exempt retirement accounts (including 401(k)s, 403(b)s, profit-sharing and money purchase plans, SEP and SIMPLE IRAs, and defined benefit plans).

522(b)(3)(C)(n) - IRAS and Roth IRAs to $1,171,650.

Public Benefits:

522(d)(10)(A) - Public assistance, Social Security, Veteran’s benefits, Unemployment Compensation.

522(d)(11)(A) - Crime victim’s compensation.

Tools of Trade:

522(d)(6) - Implements, books and tools of trade, up to $2,175.

Alimony and Child Support:

522(d)(10)(D) - Alimony and child support needed for support.

Insurance:

522(d)(7) - Unmatured life insurance policy except credit insurance.

522(d)(8) - Life insurance policy with loan value up to $11,525.

522(d)(10)( C ) - Disability, unemployment or illness benefits.

522(d)(11)( C ) - Life insurance payments for a person you depended on, which you need for support.

Wildcard:

522(d)(5) - $1,150 of any property, and unused portion of homestead up to $10,825.

It looks like you can use the wildcard exemption for two cars not covered by the automobile exemption and still have more than enough of the homestead exemption to cover the little bit of equity you have in your home

Nobody can say for sure without reviewing your entire financial situation, but based on the info you've provided, it looks like you are an easy Chap 7.

I agree with drowning123 that you should not reaffirm your mortgage, even if you have never been late. I would say this to anybody filing a Chap 7. You never know what will happen in the future. If you are going to file BK, you might as well get your personal liability for your mortgage discharged.

[wolfman278]

We live in Wisconsin and filed in July. We used the federal exemption for our bankruptcy. (We had to).
Our attorney used KBB fair value to decide the value of the cars. Because my wife and I filed together we got to double the dollar amount of the exemptions, which was a big relief for us.
I would suggest as long as you pass the means test file for CH. 7. DO NOT do this on your own. Hire an attorney. Well worth the money. We paid $1299 for our attorney. Just remember to ask if the quote that the attorney gives you includes the filing fee (299 in Wisconsin) or not, so you don't get surprised when you go to pay them.