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Might end up having to file BK here soon, do I have other options?

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    Might end up having to file BK here soon, do I have other options?

    Hi,

    Never thought I'd get to this point in my life but it seems my wife and I are morons when it comes to money. I feel that way anyhow.

    We've never really had much debt, ~30k across 2 cars and maybe 2-5k in credit cards. We have considerably more now, close to 90k debt, no real estate. Well, I found out recently my contract is disappearing in May, and my company is doing "scheduled layoffs" until then. I have lived in expensive-as-Hell DC suburbs for the last 2 years with my current position. I do not have a college degree and only my job experience to back me up, I've been applying for jobs for about 6 months now with no success. I do not want to get stuck up here without a job and without a way to pay for a move. So we are planning a move to Florida where we used to live where we can easily find jobs and a place to live and not pay out the ass for rent.

    The problem with that is obviously a decreased income. I have 3 positions available to me in Florida, one pays almost nothing($8.5/hr), one pays decent($12/hr) and the third pays a little bit more (I think $15/hr). Job #3 is not constant money though, it fluctuates and requires travel.

    We're pretty much in debt to our knees, and if I take a pay cut like that (currently making $28/hr and the wife $22/hr) even with the reduced cost of living there is no way on Earth we are going to be able to keep up with car payments, and all our stupid little bills.

    One part I'm worried about is I very recently got a consolidation loan for as much as I could, which covers "most" of my CC's, but not all. If I file for bk soon it's going to look like fraud... I'm starting to freak out.

    In any case, so you all have some numbers to throw at me, our outgoing expenses each month are $4650 not including food / gas / medicine. If I get the 12/hr job then that's ~400/wk after taxes = 1600/mo. My wife has yet to find a job, however even if she finds one making what I make, we'll still be over $1200 short each month on bills before we feed ourselves. Our rent would go down a bit, but it won't go down $1200 worth.

    I am still in the planning stages and have spent the last week or so reading this forum and others. I haven't talked to a bk lawyer, but I plan to soon but I wanted to field my situation to the general public. You guys are usually cruel and heartless and that's what I need to hear right now.
    Last edited by Irish; 06-26-2012, 09:59 AM.

    #2
    "Do you have other options?"

    From what you are writing, I would venture a guess as NO, you do not have any other options at this point.

    A general rule of thumb to consider whether are not you are actually bankrupt is to determine your income and compare it against all normal basic living expenses including retirement and medical insurance. Subtract the basic living expenses from your anticipated income, and if there is any $ left over at the end of the month, you can call it disposable monthly income (DMI) If your DMI will not service your unsecured debts including all the interest, fees, and penalties, you are basically bankrupt.

    It sounds to me like you have arrived. Being bankrupt is much more cruel and heartless than what anyone on this forum will be with you. Coming to the realization you need a fresh start may seem cruel and heartless, but really, being capable of a financial fresh new start is the good news in your story. Sorry for all your problems, but you are not alone. It sounds like you need to start seeking out that bankruptcy lawyer for consultations and information. Unless someone is pressuring you through foreclosure or a lawsuit, I wouldn't think you need to be in too big a hurry.
    Good luck to you.

    Comment


      #3
      It sounds like bankruptcy is a reasonable thing for you to pursue. But... if I were in your shoes I would not rush to file too soon. Your finances are still in turmoil - meaning if you file now, you could end up with more debt. (Such as what if something happens and you incur medical bills? I'm guessing you will not have insurance for the immediate future.)

      On the other hand, once you move you will need to be in the new state for at least 3 months to file bankruptcy there. If you don't have assets, it might not matter, but compare the exemptions of where you are now & see if that is better? I'm not sure FL is so friendly if you do have assets to protect.
      ~Staci
      Not an attorney, and never played one on tv. My responses are based on my own experiences & personal opinions.)

      Comment


        #4
        Originally posted by Irish View Post
        Hi,

        You guys are usually cruel and heartless and that's what I need to hear right now.
        OUCH.

        I beg to differ. This is the kindest forum I have EVER seen, bar none.
        People here are not afraid to call a spade a spade and give a gentle scolding when necessary... but cruel, never.
        I do want to warmly welcome you . If you insist, we can take you over our collective knees and spank you, but I don't think that's necessary. Sounds like you are doing all the right things, weighing your options, etc. Keep reading and posting.
        It will all work out ok.

        Keep On Smilin'

        Comment


          #5
          Thanks for the positive replies guys!

          By "you guys" I meant the general public, not particularly this forum so sorry if that came off wrong!

          Currently we aren't delinquent on anything, not one payment has been missed. That will change over the next few months though.... Our lease is up in August and I don't want to renew up here so we have set a tentative move out date of 31 August. We will easily be able to cover our expenses until then. We don't have much in the way of a savings account, but it'll be enough to pay cash for at least one working vehicle. I also will be cashing my 401k to help cover moving expenses, down payments for utilites and all that but once we get moved in I'm not going to have much of a choice but to stop paying for things.

          As far as "assets" go... We have our cars, which at this point is the primary reason we are in debt and as such I dislike them very much now. My car is about ~3k upsidown, but my wife's is over 10k. This is also the primary reason I'm worried. I want to retain a lawyer in Florida to deal with the debt collectors when they start calling and fend off BK as much as possible, although I'm fairly certain my credit union is going to come after me for their loan money, and of course the balance after they repossess the cars. We have a TV in our living room and bedroom but we currently live in a 1 bedroom apartment, and really don't have much "stuff". We have a bunch of furniture from Ikea that's about it...

          Again, thanks for the replies so far guys, I like hearing personal opinions on this.

          Comment


            #6
            Originally posted by Irish View Post
            I also will be cashing my 401k to help cover moving expenses, down payments for utilites and all that but once we get moved in I'm not going to have much of a choice but to stop paying for things.
            Speaking from my own personal experience, I would think twice about using retirement money for anything but retirement. You are not apt to replace the retirement in the future, and whether you stop paying for things now or later is not going to affect your discharge. You will be needing money in the future like you do today. I am retired solely on Social security and it is not enough to live on, so I still work part time. I emptied my account to pay debts, make a move etc. just like you are thinking about doing. Your creditors should not be able to touch your retirement account, and if you are going to file bankruptcy, you might as well have at least one asset to protect. Retirement accounts are good assets to protect.

            Comment


              #7
              No way you should touch the 401K. It's an exempt asset in bk.
              If bk is a viable option then, stop paying all debt you wish to discharge now and use that money for living and moving expenses. Don't be in a tearing hurry to file just because you don't want to deal with collectors.

              Comment


                #8
                I don't mind dealing with collectors, I don't want to file; but I also don't want to deal with lawsuits. For now(when they start coming in), I just want to divert all my collections calls to a lawyer. My 401k is only from my current job, so ~2 years worth and I could definitely use the cash.

                As for stopping payment now... I'm trying to maintain my credit while I can to ensure that I get a place to live. I feel like 2 years isn't much time, but maybe it is. I'll sit on that decision...

                I haven't signed a lease yet in Florida, should I not be so worried about that? I've had pretty good credit for the last 8 years or so, so I've never had to haggle with people to find a place to live.


                edit:

                If I know that I'm going to not be paying in the future does it really benefit me to maintain my credit for the last 2 months until we sign? I wanted to talk to a lawyer before I stop paying for everything, but I don't know. Never been in this situation before.

                Comment


                  #9
                  I third that!

                  Stop right there mister! You wanted heartless you got it baby.
                  Do not - I repeat- NOT-- touch that 401k!!!!!
                  Or we WILL take your over our knee!

                  Keep On Smilin'

                  Comment


                    #10
                    I quadruple what keepsmiling has said. LEAVE THE 401K ALONE!!!! That was one of the things we did trying to stave off the BK. We ended up filing anyway, and we now don't have that Retirement income stream, and it hurts very much.
                    Last edited by AngelinaCat; 06-26-2012, 01:54 PM. Reason: spelling
                    "To go bravely forward is to invite a miracle."

                    "Worry is the darkroom where negatives are formed."

                    Comment


                      #11
                      Haha ok, you guys jumped on that like nothing else so I'll transfer that to my next position or however that works. Any other input on my situation in general?

                      My wife and I are discussing what's been said so far tonight.

                      Comment


                        #12
                        REPEATING what was already said.....STOP paying your bills now and use that money to move.

                        Comment


                          #13
                          Yep I agree with the rest. Do not touch that 401K. We came might close to doing that and are sure glad we did not

                          Pam

                          Comment


                            #14
                            Go get Google Voice. Look it up. And get into all of your accounts NOW while you still have access and change the phones to GV.
                            You probably have 6 months or more before you have to worry about a lawsuit. So... breathe.

                            Keep On Smilin'

                            Comment


                              #15
                              Originally posted by keepsmiling View Post
                              OUCH.

                              I beg to differ. This is the kindest forum I have EVER seen, bar none.
                              People here are not afraid to call a spade a spade and give a gentle scolding when necessary... but cruel, never.
                              I do want to warmly welcome you . If you insist, we can take you over our collective knees and spank you, but I don't think that's necessary. Sounds like you are doing all the right things, weighing your options, etc. Keep reading and posting.
                              It will all work out ok.
                              I would actually have to agree with Irish.

                              Comment

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