Filing for a second time? Should I or am I even able?

[texascc2]

First and foremost, I'm a big boy so I can take your comments. I know I have not handled our finances well and have paid dearly for my mistakes...here are my questions and scenario:

I filed for Chapter 7 and received discharged back in May of 2007. At the time, I was WAY over my head in debt due to stupidity and poor money management. We had almost $80k in credit cards and loans and really had no good reason besides living beyond our means.

Currently I'm starting to feel the pinch again and have had to take money from family to make ends meet for the last few months.

I am in the semiconductor industry and things have pulled back and for the last year there has been ZERO overtime available to me. I used to work the max and would literally double my checks and was used to living on that money.

That said, we don't live lavishly and have really kept things to a minimum. Just the basic bills, no cable, very little eating out (and nothing extravagant) but we do have 3 children and day care kills us, especially during the summer when they all are out of school.

We have very reasonable mortgage ($1150/mt) and a great interest rate 3.25 percent. We own a 2001 Chevy Suburban that is paid for, a 2005 Honda van that we owe $13,500 and have horrible interest rate of 20% on and payments of $411 a month. We now have a total of $12k in various store and credit cards and with all these minimums we are starting to fall behind.

Would it make sense to try and file again? Could I even file again? I'm ready for comments and questions so please let me have em!

[justbroke]

You could not file a Chapter 7 (technically "receive a Chapter 7 discharge") until 8 years has elapsed from the filing of your last Chapter 7. Your only choice, at this point, would be a Chapter 13.

Your issue may be more about budgeting, even though you do have some belt tightening going on. Perhaps you could refinance the Honda (??), unless you're less than 11 months from paying it off. Otherwise, that interest rate is certainly killing you. Have you thought of consolidating all the revolving debt (the $12K) into a 5-6 year installment loan? That could help as well, but you'd need to give up most of those revolving credit cards.

What is your actually shortfall? Have you tried putting your budget into a spreadsheet (such as Excel) and looking forward? I would especially look at the affect of school holidays/recess on your budget (since that may be a big area where you are hurting the most). If you are relying on credit cards (revolving) during those tight months, such as when school is out of session, then you certainly have a shortfall. If your income can't cover the childcare, you may need to consider a spouse saying home instead of working -- if working is counterproductive. You can only determine the overall affects by running a year's budget and include every single expense down to the $1.

[texascc2]

Thanks for taking the time to read and respond to my post.

As far as refinancing the van, not going to happen. I've tried multiple times and the van is too old and has too many miles (2005 with 110,000 miles) and I'm a little upside down in it. I owe $13,500 and am always told that I'm at least $2000 - $2500 away from being able to refinance it.

Our credit scores are very bad as well (mine is 580 and wife's is 626) so I've never been able to consolidate the $12k into a single loan but that would probably be enough to help us out. I even tried home equity loan and that was denied due to credit history.

I'm horrible at budgeting but I do have ALL of our bills in a spreadsheet with due dates, amounts, and contact information which has helped greatly with staying organized.

Lastly, I forgot to mention about $1000 due in hospital bills that are turned over to a collection agency that I have not even addressed yet as well as $5000 in school loans (which I didn't mention because I can't get rid of them anyways). This also stems from a layoff in 2009 that lasted a year and zapped my savings. The same company eventually rehired me but it did take it's toll.

[AngelinaCatHub]

I understand you "living beyond" as there are 'painful' times for me due to the fact we had money once and this habit of just getting it when I want it spending is hard to kick. We do succeed though as we refuse ANY credit (except a car note) and have everything paid off. Technically we have no bills due to a firm ethic of "no cash, no purchase".

That is what you now have to do. No cash, no spend. AS JB suggested, a C13 would keep the dogs off your tail and also regulate your spending for you. Take it seriously though as you admittedly don't have enough self control. (you said it, so be a 'big boy' about it).

I'm not attempting to judge you, or talk down to you. I'm giving what you asked for. H E L P , and that's all.

Welcome to the forum by the way. I will check back on you every day and wish to give you help to my best ability. 'Hub

[texascc2]

No, no, no...I'm not going to get defensive. I want any and all honest comments. You speak the truth. I'm a horrible at budgeting and WANT to live a life of all cash. But we've never lived lavishly or bought expensive clothes etc but just having and raising three kids with ZERO help as far as child care goes really took it's toll and yes, we use our cards when we got down to the nitty gritty. But that was after selling old clothes, dvds, books, turning in coins, etc. What usually happens is that we have so many small cc payments on auto pay (due to being on a repayment plan) that things get out of hand and before we know it we have nothing in the bank and it's 10 days to either pay day. My kids are 9, 7, and 3 and are playing sports for the first time in their lives...and I arranged a payment plan with the flag football organization for that. NO vacations, not even a quick road trip. Not trying to argue or paint myself as a saint, but I'm not someone who leased a Benz, vacationed in Europe, and eats at the finest places to get into this position and now I want to get out before it snowballs any further. Two more questions:

1. If I was to do this, how much could I expect to pay back?

2. Could I walk away from my van and how does that work? I have a reliable vehicle that I can use/buy directly from my brother if I can get out of mine.

[justbroke]

1. If I was to do this, how much could I expect to pay back?

There is no way to guess or even provide you with a range that you would appreciate. For example, people payback between 0% and 100%. Since the payback is based on your "disposable monthly income" (DMI) combined with other factors (income, household size, allwoed expenses, income, taxes, medical, food, clothing, cars, etc), there is no way to tell hyou specifically what you will pay. What you won't pay, is anything more than what your DMI is calculated.

2. Could I walk away from my van and how does that work? I have a reliable vehicle that I can use/buy directly from my brother if I can get out of mine.

If you filed bankruptcy, you could walk away by surrendering the vehicle. The debt would be discharged.

With a family of 5 and only making $80K a year, you are very close to the median income for Texas for a family of 5 (which is about $75K). At this time, you can't receive a Chapter 7 discharge due to your previous filing. Whether a Chapter 13 is the right course for you is something that you would need to decide.

[texascc2]

I guess the same goes for asking how much it would cost to file...you probably can't say since it varies from attorney to attorney. Is there a ballpark amount I should stay within? I hate to think about doing this for this small of an amount, but like I said, overtime is GONE and the bonuses that we used to get bailed us out of anything that we had started to fall behind on...no more of those lately either. I'm thinking of getting a second job but that means I would literally not see me kids and not be there to help with homework, practices, games, etc....I know desperate times call for desperate measures but I have to be there for the kiddos as well.

[justbroke]

A "typical" Chapter 13 runs from about $2,500-$5,000. I would say that the median Chapter 13 is about $3,500 required before filing, with about $2,000 in-plan.

[keepsmiling]

You're kinda in a rock and a hard place. BTDT, still there so I get it. Not sure a bk will fix your probs tho.
It may be time to get creative about making or saving money.
It may, for instance, be cheaper to have live in care than daycare.
Or maybe think about selling on ebay for that second job. Some people do make serious money and you can do it once the kids are in bed. Or work that second job just one day a week. Or as JB said, one of you might be better off staying home. You really need to think about the long term consequences of that though.
We've started riding the bike for as many errands as possible to save on gas.
Or see if you can trim the grocery budget by eating beans instead of meat. They are very good for you
Good luck. Hang in there, see what other ideas come along.

[texascc2]

We've debated about my wife or I staying home versus daycare and as of now we have my 3 year old in a great daycare and at the lowest price ever...we now pay $610 a month for a in home day care with a very caring ex teacher that is amazing. We just started this not too long ago and before that she was in Stepping Stone which is almost like a kid kennel compared to the place she is in now and it costs us $875 a month. The debt we have has built up through the years when multiple kids were in daycare at the same time and it costs more than our mortgage (but I had the overtime coming in during those years). We would use credit cards when we were short and little by little they built up. Now, the child care issue is only in summer when all three have to be in a camp or school together. This summer costs us almost $5000 for all three for all three months. I had saved an early year bonus and our tax refund to try and cover this but ended up having to take a loan from our 401(k) to make it. We both make more than enough to keep working and send my daughter to child care. The best solution would be to get rid of my van and focus on paying off my bills. But remember, I'm upside down and our van is not in very good cosmetic shape (multiple scrapes and dents) so I couldn't even get what you'd think if I sold it myself. I'm reading about people that just walk away from their debts...what is "Judgement Proof"? I don't want to just abandon these debts because I know they would hound me forever or sue me...My highest cc balance is $1400 and most are $750 or less along with a Dell account that has a $1400 balance. Thanks again for the help and if there are any specific questions or concerns, please voice them or ask directly. I need clear guidance to resolve this issue.

[texascc2]

By the way, I love the idea of selling on eBay and have used it in the past to sell off items from around the house so I know how to do it. But what in the world would I sell on there as a business? I don't have any experience in that sense at all. I figured that people on there aren't making much any money from most of the junk I see on there or there are high startup fees to even acquire the stuff to sell.

[keepmine]

There is no such thing as being judgment proof.
If, your income can't be garnished and you have no assets that can be attatched, you're execution proof but, anybody can get a judgment. They just may not be able to get any money out of you.

[texascc2]

IF, and I repeat IF, I decided to say "screw it, I'm not paying anyone anymore except my house and car", how does that work? I know they will try and collect from your directly for a while and then sell the debt to a collection agency later. How long do they chase you and how long does that show up on your credit report/score? To me that sounds like the worst option possible, especially because some of my debts are pretty small ie. $200 -$400. But how/why would I choose to pay some but not all of them and still have a really bad credit score for the near future. To me it's either continue trying to work magic (and failing) or stop paying them all. Again, I'm thinking out loud and appreciated everyone's help.

[bcohen]

By the way, I love the idea of selling on eBay and have used it in the past to sell off items from around the house so I know how to do it. But what in the world would I sell on there as a business? I don't have any experience in that sense at all. I figured that people on there aren't making much any money from most of the junk I see on there or there are high startup fees to even acquire the stuff to sell.

Buying stuff to resell on Ebay is the fastest way to get in a lot of debt and waste a lot of valuable time. Ebay takes more than 15% off the top (10% final value fee on the entire balance including shipping plus Paypal charges another 3-5% on the entire balance--including the money that you never see because you paid it in fees or for postage). A private person trying to sell things on Ebay is squeezed in all directions because larger sellers who sell in volume pay lower Ebay fees, lower shipping costs, and lower acquisition costs to buy the merchandise.

Unless you are proposing to sell things which are worthless to you, or which you got for free, you will likely lose your shirt. I used to sell on Ebay before the big fee increases and postage increases, now I never sell there unless it's something that I'd be throwing away if it didn't sell, so whatever I get--as long as it at least covers my fees and postage--is fine.

[tobee43]

i have also been selling on ebay, close to 17 years now, and as bcohen points out the costs have now began to out weigh the work and have eaten up most all and any profits...and it's a ton of work. i have always upwards of 200 items on ebay, (i have no more time so now i'm down to 87), i make enough to buy groceries and that is about it. now the ONLY reason i'm doing it is to get rid of old clothes and "things" that are more profitable than using them as a donation, also, certain things sell better than others. i try to keep everything down until 13 oz to be able to offer free shipping, however, my down winter coats that i would love to sell, costs way to much to ship and no one wants to pay, everyone buying on ebay now wants it for nothing. ebay's attitude towards the sellers really has gotten so bad. then lets not forget the taking of the pictures the downloading and the write ups. way to much work for such a little...except one item i sell. i will not mention what it is since it may not be appropriate however, after my weeks auctions and after buying groceries, if and when i have the time i go hunting for this item for resale as it is extremely profitable. right now, my few clients pay me far better and it's actually less work than ebay!