My wife and I have $88,000 in unsecured consumer debt, gradually accumulated over the past 15 years. A REAL serious millstone around our necks. Last week she INSISTED that we seek legal advice. I've been balking for a long time on this because we've always been able to make minimum payments and as I've explained to her many times "what's the use anyhow since we can't pass the means test."
My income is $85,000 & my wife makes $33,000. No significant assets to speak of aside from around $60,000 equity in our modest home and a 2009 Subaru Legacy which will be paid off September 2014.
The attorney looked over our tax returns and informed us that we are well over the means test threshold for a family of five in our state, so a Chapter 7 is not an option. I will be eligible for a public teacher retirement as of May 2013, and have been contemplating a career change for some time, so I asked the attorney if I could retire to pass the means test, and without batting an eye she replies "Oh yes, that wouldn't be a problem. The means test is just a snapshot of your financial situation on the day you file. No one is going to try to divine your intent." My wife then asked if she could quit her job (not retire -- quit outright) so we can pass the means test even sooner, and her reply was "Not a problem. The two of you just have to keep your six month average household income below the threshold."
I then asked the attorney if we'd be able to keep the car, stating that my rough estimate pegs its value to be probably 2-3 thousand dollars over the allowed vehicle exemption in our state, to which she replied "neither the bank nor the trustee want stuff like that. I might even be able to lower your payment through reaffirmation."
This particular attorney has been practicing bankruptcy here since the 1970's, so surely she must have a sense of how local bankruptcy business is conducted, but this sounds almost too good to be true. We left her office with an agreement for her to handle our Ch 7 for $2100 ($175/month for 12 months) and I'm to check back with her in May when my retirement is official.
My family may well be eating eating ramen noodles three times per day during summer/fall 2013, but that seems like a rather small price to pay for wiping out an absolutely crushing $88,000 debt.
Feedback/insights/suggestions appreciated as I'm trying to make sense of all this and I'm gradually adapting to the notion that my financial situation is perhaps NOT hopeless!
My income is $85,000 & my wife makes $33,000. No significant assets to speak of aside from around $60,000 equity in our modest home and a 2009 Subaru Legacy which will be paid off September 2014.
The attorney looked over our tax returns and informed us that we are well over the means test threshold for a family of five in our state, so a Chapter 7 is not an option. I will be eligible for a public teacher retirement as of May 2013, and have been contemplating a career change for some time, so I asked the attorney if I could retire to pass the means test, and without batting an eye she replies "Oh yes, that wouldn't be a problem. The means test is just a snapshot of your financial situation on the day you file. No one is going to try to divine your intent." My wife then asked if she could quit her job (not retire -- quit outright) so we can pass the means test even sooner, and her reply was "Not a problem. The two of you just have to keep your six month average household income below the threshold."
I then asked the attorney if we'd be able to keep the car, stating that my rough estimate pegs its value to be probably 2-3 thousand dollars over the allowed vehicle exemption in our state, to which she replied "neither the bank nor the trustee want stuff like that. I might even be able to lower your payment through reaffirmation."
This particular attorney has been practicing bankruptcy here since the 1970's, so surely she must have a sense of how local bankruptcy business is conducted, but this sounds almost too good to be true. We left her office with an agreement for her to handle our Ch 7 for $2100 ($175/month for 12 months) and I'm to check back with her in May when my retirement is official.
My family may well be eating eating ramen noodles three times per day during summer/fall 2013, but that seems like a rather small price to pay for wiping out an absolutely crushing $88,000 debt.
Feedback/insights/suggestions appreciated as I'm trying to make sense of all this and I'm gradually adapting to the notion that my financial situation is perhaps NOT hopeless!
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