Should we file? Many, many questions.........

[basketsbears]

Hi,

I had posted recently and didn't receive any replies - maybe the questions were confusing. I am confused as what is best for us to do.

A little background. We have 2 houses, one in my name that is our primary residence, and one in my husband's that is underwater. It is currently being rented, but the renters are not paying. We have not paid on mortgage for over 1 year. It is with BOA (a whole other story with BOA).

We have about $40,000-50,000 credit card debt. We are in a debt management program, just finished two years, have 3 more years to go. We pay $435 every other week. We have a Jeep with a $500 month payment, and another unsecured payment of $135. I am going to graduate school, working part-time and my husband receives partial retirement thru Civil Service and VA disability. I have also been taking out student loans to cover my tuition. I will be starting with a new employer end of next month who will be paying for my tuition up-front.

I just feel like we aren't going anywhere. BOA, even though it is so inefficient, someday will foreclose. We have thought of bankruptcy mainly because of the foreclosure in the future.

We are both 54. I cannot believe we are in such shape. We are current on everything except the BOA mortgage. Our credit scores are low 600's since we started the debt management plan.

On the NOLO program, it seems like we pass the means test, our income is higher, but it is the part where we would not have enough to pay back a plan.

Would there be an advantage of a Ch 13 if we don't qualify for 7 since we are already in a payment plan? I would be so embarrassed for my new employer to find out if they had to garnish my wages. I think our Jeep can be "crammed?" in December of this year (12/25 would be the date), can that be done on a Ch 7 as well.

Thanks for all your help.

Lynn

[AngelinaCat]

Schedule several consults with BK attorneys in your area. Explain your situation and ask the pros and cons of filing 7 or 13. You WILL get several different answers depending on the attorney. Read the stickies here, and the current posts. The more you can read and educate yourselves, the better you will do.

In fact, read here for several days before your appointments, then take a day or two off to rest your brain before talking to any attorney.

Since it appears that you are going to file BK at some point, stop paying anything to the credit cards now, and save that money up to pay the attorney you will eventually hire. However, as you read more, you may become confident enough to file your case on your own, without an attorney--that is 'pro se', Read through that board as well.

Okay. That is the best I can tell you right now. I have given you a lot of homework for the weekend.

There will be a quiz on Monday! Just kidding!

[Drazil65]

Keep reading here, read everthing, make it your priority. You will actually feel better and back in control of your situation. Start the mind transition as you read, this will be a business decision for the business of your family. Your story sounds so much like ours and so many others (my husband back in school and graduates next May), you will be surprised and relieved that so many have the same story in one way or another.

We are getting ready to file in the next 2 weeks (yeah) and we had our attorney consults back in the beginning of July. Lots of preplanning and getting our ducks in a row with a clear filing goal in mind. Three consults with 3 different attorney's and we feel very comfortable with the one we choose. Make sure you feel comfortable and that you "interview" them at the consults, the consults should all be free.

We feel so much better since we have a plan and we know that just like the big banks and businesses that make this same decision when they no longer can operate under the financial stress and borrowing from one to pay another plan (which by the way only works for the creditors you are paying) they do this exact same thing.

We are from all walks of life so you are in very good company and may be very surprised just how many are here wih you! Ask many questions and start to get things in order, you WILL feel better as you go. Good luck and move forward!

[Drazil65]

Sorry, one other piece of advice, look into and read here about Google Voice, its a life saver and you will be so happy you set it up. You will also have a written record of all your creditor calls in case one of them violates the law and calls you when they should not. GV makes this whole process so much less stressful!

[BKAttyMI]

Not sure what kind of "payment plan" you're in, but a Chapter 13 would likely provide you some relief and also put an "end in sight". That is, if you don't qualify for a Chapter 7.

[basketsbears]

Thanks for all the information. The "payment plan" we are in is thru Greenpath financial (also called Accel I believe the main office is in Detroit, MI area). Our credit union has that option for people. We have completed two years, and seems like it will be forever. Some cards are 0%, I think the highest is 9 or 12% (I cannot remember right now). We are due to have that paid off maybe in 3 years. It seems like when we signed up we would be paid off in 4 years, but it seems like it will be more like 5 total. Our credit union pays our fee, so we do not pay a fee ourselves.

So, if we stop paying our unsecured debt, that would be about $1,005 per month saved.

We had talked about it on and off for the past two years, that's why we ended up going to a credit counseling firm with our credit union. We had thought we would keep the rental, but it is such a hassle. BOA is horrible to work with, and our renters are not paying. Even though we are not paying the mortgage on the rental, we still are paying the property taxes and insurance. Ugh! When we were paying everything we were still in the "hole" by about $300-400 month.

Thanks for all the advice. If we wait until after 12/25 to file, we will have had our Jeep for 2 1/2 years - so we could 'cram down' the payment I guess. We purchased it on 6/25/09.

Thanks again!

Lynn