My low point - Im new

[surfrider26]

It seems my financial spiral over the past 5 years has finally hit a low point (hopefully)

Last year my wife left me. My house is due for short sale (or foreclosure) and last week I lost my job after 9 years of company loyalty.

Obviously I am worried and freaked out that now (until I find another job) I am on a finite amount of money.

My question is whether I should file for BK? All of my debts (except my house) are current. The problem is that without my job, I cannot continue to pay them...I was able to get a little leeway on some of my secured debt (auto loan, Fed Subsidized school loan) but all of my credit cards are saying that they cant do anything for me until they are late. I am struggling with this, as I have never been late paying them. I dont want to go months and months not paying my debt, then get a job, and have massive balances to try to make up.

What should I do?

1. Just pay everything "as is" until my money runs out in a month or 2 perhaps? At that point if I have not found a job, I lose everything.

2. ONLY pay what I absolutely MUST have (car loan, insurance etc) and let everything else run late until I can find a job?

3. Consider BK option ASAP. Use this time in my life to wipe some old decrepit debt, finalize things on my house and move on.

I know people that have filed for BK multiple times and swear by it. But all of those people have jobs, houses, apartments etc, of which I will be looking for starting this week...

How long does the filing process take? how long before it hits my credit report, so I can use that time to try to find a new job and place to live?

I will take any advice at this point...

surf

[keepsmiling]

Hello and a warm welcome. You have found a caring place. Sorry about all your bad news. So much for the "recovery" we are supposedly in. Ha.
Many would say don't file now, wait til you are in a better position. Some will say file at the bottom of the bell curve. Much will depend on your past 6 months income. Keep reading and posting.

[surfrider26]

Hello and a warm welcome. You have found a caring place. Sorry about all your bad news. So much for the "recovery" we are supposedly in. Ha.
Many would say don't file now, wait til you are in a better position. Some will say file at the bottom of the bell curve. Much will depend on your past 6 months income. Keep reading and posting.

Thanks for the positive spin

This all new to me so I am just hoping for some sound advice from others.

[doni49]

Unless you're REALLY confident you'll find a new job soon, I would stop paying on any non-esentials. Pay for esentials and leave every cent you can accumulate in the bank. And unemployment funds are exempt both in bk and (unless I'm mistaken) non-bk courts of most states AS LONG AS the funds haven't been co-mingled. So have your UE funds direct deposited in your account (preferably a brand new account) and NEVER deposit any other money. If youlve got any other liquid assets available, use THAT moeny to pay bills.

Those liquid assets are the things that a creditor can take from you (or if you file BK, the trustee will take). So use that and accumulate exempt funds if you can.

Sit down with a few local BK lawyers and discuss your options. The initial consult is usually free.

[surfrider26]

Unless you're REALLY confident you'll find a new job soon, I would stop paying on any non-esentials. Pay for esentials and leave every cent you can accumulate in the bank. And unemployment funds are exempt both in bk and (unless I'm mistaken) non-bk courts of most states AS LONG AS the funds haven't been co-mingled. So have your UE funds direct deposited in your account (preferably a brand new account) and NEVER deposit any other money. If youlve got any other liquid assets available, use THAT moeny to pay bills.

Those liquid assets are the things that a creditor can take from you (or if you file BK, the trustee will take). So use that and accumulate exempt funds if you can.

Sit down with a few local BK lawyers and discuss your options. The initial consult is usually free.

sorry, but what do you mean "co-mingled"? Are you saying I should not put my UE with my normal every day funds?

[keepsmiling]

yes
but not sure that's true about UE being exempt
others will be along shortly

[shark66]

I would NOT contemplate filing BK in your current set of circumstances. If you were - God forbid - to get injured or become ill, you'd be likely to amass thousands in medical bills that you wouldn't be able to get rid of. Wait until you have a job with health insurance (and some assets to protect) and then file.

As for payments...stop paying on everything and anything that is not a bare necessity. Forget credit cards and such, I'd also consider getting rid of the card loan and buying a daily beater for cash if you really need a vehicle.

My $0.02 only...

Good luck to us all.

[surfrider26]

I would NOT contemplate filing BK in your current set of circumstances. If you were - God forbid - to get injured or become ill, you'd be likely to amass thousands in medical bills that you wouldn't be able to get rid of. Wait until you have a job with health insurance (and some assets to protect) and then file.

As for payments...stop paying on everything and anything that is not a bare necessity. Forget credit cards and such, I'd also consider getting rid of the card loan and buying a daily beater for cash if you really need a vehicle.

My $0.02 only...

Good luck to us all.

Yea that isnt something I thought about. Serious injury or illness I would just have to off myself hehe.

I have a meeting with an attorney Monday, see what happens...

[doni49]

yes
but not sure that's true about UE being exempt
others will be along shortly

I just did a quick google search and found the following link. I THINK it says UE is exempt i n CA.

http://www.kinseylaw.com/clientserv2/civillitigationserv/enforcement/enforcejudgment.html

EDIT: Assuming I'm reading that correctly, If you can prove that no funds OTHER THAN your UE benefits have ever been in the account, any attempts to lein the account can be fought and denied. But if other money is kept there too, it's all fair game and they can take it.

So open a new account and put your UE there. Use all other sources of income before you consider touching the UE account.

[doni49]

Found another useful link. Here's the relevant clip:
No, most creditors cannot garnish unemployment benefits unless the judgment was for spousal or child support. States cannot garnish payments from the federal government, and vice versa, according to Boggs. "States can garnish unemployment if you owe money to them. State unemployment would be immune from IRS levy." Friedman says that by the time you claim exemption for the basic necessities of life -- food, a car, rent -- you're not going to have to worry about having unemployment benefits garnished.

and the link:

http://www.creditcards.com/credit-card-news/herigstad-wage-garnishment-advice-1294.php

[Drazil65]

Hello and welcome. Take a deep breath and start putting all your options down on paper. Its normal and expected to freak out a little (or alot) in a situation like this. We have all done the freak out dance at some point but once that subsides a bit you will start to see things clearer. First and foremost get your enemployment issues taken care of (go and sign up if you have not done that already). Take stock of what money you do have right now and how much your UE check will be. Take a breath and deal with the facts as they are today. You need to live so only pay for what you need as far as basics go. I agree with the car loan situation, see if you can sell it and get a beater for now with cash (whatever is leftover from selling your car and paying off loan). Make a plan for the next week, then a plan for the week after that, take one week at a time. You will look for a job and live on what you have.

Research and read everything on this site that you can about BK, whether or not you file you MUST be informed. Its the only way to gain back the control in your life. Be proactive with all this stuff and you will feel like you are back in control and making the best decisions. Take a breath you are with friends and you will be ok, really you will.