Need Advice! Afraid I may have to file.

[Reefsafe]

Hi, I feel I may be forced into filing for BK. I have no idea what this means or how I will be affected.

Some background info....

Basically I am a single father of 2, I have joint custody & have to pay child support to my ex. I'm self employed with a small clientel that keeps me afloat. I was divorced a couple of years ago and managed to keep the house but along with that took on other debt which includes a HELOC for ~$60k. The home has just gone upside down, I owe approx $225k and I believe it is only worth less than $200k now. I also have run up credit card bills of ~$30k from the divorce & general living expenses, I guess my clientel doesnt really keep me afloat..

I have never been late paying any of my bills and have tried my best to pay the CC's down as much as possible but never seem to catch up. Keeping my home has always been a priority. My mortgage is incredibly low and I wouldn't be able to rent a crappy apartment for what I pay for my home.

Here's where my situation has changed. Just over a month ago I had a motorcycle accident, I broke 12 ribs and punctured a lung. I feel lucky thats all that happened, i'm still able to walk.

Today I received the first medical bill which is for $6k. This is for only 3 days of the 10 days I was in hospital. I dread to think how much the rest will amount to. I cannot work now as my business is all physical labor and I will be out of action for months. I applied for assistance from the state and was denied as I am self employed.

I have no income and feel extremely overwhelmed and I feel like I am at the point where everything is about to implode.

I don't want to lose my home, I cannot lose my truck as I need it for work and I feel bad for even thinking about not taking care of my responsibilities.

I guess my question is what can I do?

Thanks in advance!

[keepmine]

If you have no income, how are you going to make your mortgage and truck payments?
You need to focus on getting well and getting back to work. BK will always be an option once you're able to support yourself. For sure, stop paying those credit card debts.

[AngelinaCat]

Hi reefsafe:

Welcome to the forum. I edited your post to make it easier to read.

First, thank God, you weren't more seriously hurt. You are among friends now, so take time to exhale, and relax a little. You cannot just file and everything becomes 'fine'. there is some planning that you must do.

Read through the various 'stickies' here, and learn all you can. Ask questions, and the members will try to help. You need to schedule at least three free consultations with BK attorneys in your area, and see what they have to say. Again, read all you can here, as those three attorneys may have three differing opinions on how the same set of laws will affect you.

That is a start for now. Again, welcome.

[Reefsafe]

If you have no income, how are you going to make your mortgage and truck payments?
You need to focus on getting well and getting back to work. BK will always be an option once you're able to support yourself. For sure, stop paying those credit card debts.

Good Question, after re-reading it I see your point. I won't physically be able to work by myself for a few months (estimated by the doctors, broken ribs cannot be set and I have 12 breaks). I started to drive again this week. My oldest son (14) just finished school so he is going to help me with any labor intensive stuff so I can at least make a minimal effort to keep my schedule with clients. My clients are loyal and are working with me to help me get by as far as allowing me to do a minimal amount to keep them happy and at the same time keep me in business. The work will always be there and will pick up as I recover.
I am not worried (yet) about losing income in the future, I'm worried about the massive debt building up.

[Drazil65]

Hi, welcome and I am happy things were not more serious with the accident. I guess reading through your situation the one thing that really stands out is (and please do not take offense to this) but you are in serious denial about your business. You have admitted that you HAVE to use credit cards to sustain your livlihood and make your payments (or supplement your basic needs). Maybe this accident is a wake call that you were living one paycheck away from bankruptcy should anything like an accident happen (hmmm). Big eye opener I think.

If you cannot pay your bills without borrowing from peter to pay paul then you cannot afford what you have, the numbers do not lie. I understand about the house and if you really need to keep it then it looks like you really need to bring in more income, period. You may have to work for someone else to get a consistant paycheck. This may be your reality whether or not you file. You may have to give up some of your assets in the long run and really take a hard look at your life. I assume you do not have medical insurance because you are self employed? Seems like you have alot of decisions to make in addition to filing.

As far as filing goes I think you would be smart to wait for any and all medical bills to come through. If this is the direction you are heading then stop paying all unsecured debt that is would be discharged in a chp 7 filing, it would be a waste of money to pay them in that scenario. Start creating your timeline for filing and making appointments to see attorneys for free consults. It may take a few appointments to find one you are comfortable with and a few months to pay them. Bankruptcy takes preplanning and research and now is a great time to start that. Good Luck!

[Reefsafe]

Hi, welcome and I am happy things were not more serious with the accident. I guess reading through your situation the one thing that really stands out is (and please do not take offense to this) but you are in serious denial about your business. You have admitted that you HAVE to use credit cards to sustain your livlihood and make your payments (or supplement your basic needs). Maybe this accident is a wake call that you were living one paycheck away from bankruptcy should anything like an accident happen (hmmm). Big eye opener I think.

If you cannot pay your bills without borrowing from peter to pay paul then you cannot afford what you have, the numbers do not lie.

No offense taken. And yes, a big eye opener for sure!!

I somewhat agree with what you're saying. The larger part of my CC debt was from the divorce and even stuff before the divorce when we were still together that I am now solely responsible for (those things didn't seem that big of a deal at the time when you have a 2 income household).

Since the divorce that Debt is almost static, a lot of times I do manage to make a big payment but end up charging something back, for example the cat needed a visit to the vet which cost $700, or new tires for my truck. It seems like there's always something that needs immediate attention which prevents me from paying down the debt. It's not a matter of i'm just living off credit cards.

Like I said, I make enough to pay all my bills every month, granted the HELOC is a interest only payment and CC payments are equal to whatever was charged that month. The problem is I don't make enough to make them go away and with the medical bills about to start piling up it's about to get worse.

I feel like if I could have a clean start and get away from the past few years I could carry on and be self sufficient.

[keepmine]

I'm of the opinon that you want to leave bk in far better shape than you entered.
That means filing when it'll be the most advantgeous to you. I'd be in no tearing hurry. Let all the medical bills come in-be sure no further surguries or rehab are needed. Stop paying all credit cards and use that money for living expenses and your lawyer. Let's not jump into something prematurely. Plan this thing out.
Most bk lawyers will give a free or lowcost initial consultation. Speak with a few and get all of your options explained.

[Reefsafe]

I'm of the opinon that you want to leave bk in far better shape than you entered.
That means filing when it'll be the most advantgeous to you. I'd be in no tearing hurry. Let all the medical bills come in-be sure no further surguries or rehab are needed. Stop paying all credit cards and use that money for living expenses and your lawyer. Let's not jump into something prematurely. Plan this thing out.
Most bk lawyers will give a free or lowcost initial consultation. Speak with a few and get all of your options explained.

I'm in no hurry, I only just began thinking about this yesterday and started to look into what the process is. Like I said i've never even been late on a payment before so to read how everyone says stop paying CC all together is a little frightening to me. I'll look into attorneys this week and see what they have to say.
Thanks.