A lot of Advice

[spender]

I think I'm ready to bite the bullet, What do you think I should do:

Here is my situation:
My wife and I have approx 80,000 in unsecured cc's
My house is worth 475,000 and I owe 426,000 on it.
We own 3 cars one outright value of 2500 , 1 I owe 6500 on and has a value of 20,000, and 1 I owe 15,000 on and a value of 18,000

My income is 55,000 and my wifes was about 15,000

Last year we made alot more but earlier this spring I lost a second part time job that paid me almost 25,000 (due to back pain from a car accident) and my wife just got her hours cut except for a couple days a week.

For the past 3 months I've basically started paying out more than I'm taking in and have robbed peter to pay paul so to speak.

The most important thing to me is to keep my house. Hands down. The property was given to me by a family member and I actually built the house with my own 2 hands. I cant believe I put myself and my family in this position. I find it very hard to look in my kids eyes knowing what I might have done with there future. They love where we live.

I am so new to this and just plain ignorant on the subject and have read and heard so many good stories and horror stories. I am not late on any payments yet but I just drained the last of any money I could secure. So I will be late starting in January. I know I need to go see a bk lawyer but I dont have any appointments untill late next week and this is just killing me. I cant hardly sleep at night wondering what the hells gonna happen. I had a Home equity loan for 50,000 in the works and it just fell through. I wanted to jump off a bridge when that happened.

But today I found this site and I guess what I am looking for is to hear if there is anyone else that was or is in my position and how they have gotton through it or am getting through it. Also is there any way possible that I can do a bk without losing my house or will that be the first thing they go after?
Please any input would be greatly appreciated and It would mean alot for me to hear your stories or suggestions. Thanks again,

[lrprn]

I think I'm ready to bite the bullet, What do you think I should do:

Welcome to the BK Forum, Spender. We've all been where you are right now at some point, so we're glad you found us.

Agree that you are at the tipping point for sure, especially with the amounts owed you mentioned. You may be unhappy that another mortgage fell through right now, but it may have been the best gift you will ever receive because it's forcing you to face the state of your finances now before you have even more debt piled on that you will have trouble paying.

It will help us a lot if you tell us what state you're in. Each state has slightly different rules and customs for Chapter 7 (traditional bankruptcy) and Chapter 13 (wage earner bankruptcy). Since you want to save your house, then you will want to file Chapter 13 which allows the debtor to keep assets like a house and (most of the time) a car for each driver.

With a combined income of $70,000, you and your wife combined are above the median income for every state. This means you will have to complete the entire required Means Test to see if you can qualify for Chapter 13 (which with your income level, you most likely can).

It's good to hear you have an appointment made with a lawyer next week. We recommend making appointments with at least 3-4 different bankruptcy-specialty lawyers in your area - most give free half hour to hour consultations. If you can find a bk lawyer that is or was a trustee in your district, that's the best bk lawyer you can have!

Here are some excellent links to help you understand Chapter 13 bankruptcy better:

http://www.uscourts.gov/bankruptcycourts/bankruptcybasics/chapter13.html

http://www.abanet.org/publiced/practical/bankruptcy13_whatis.html

http://moranlaw.net/13workings.htm#Chapter%2013%20practice

Do some reading this weekend, then come back with any questions you have. That's why we're here! It isn't the end of the world to find yourself in financial trouble - the end of the world comes when you don't do something about it. Being here and being willing to look realistically at your options, you are doing something about it - good for you! Again, welcome!

[spender]

thanks

Irprn, Thansk alot for the response. First off I live in Connecticut. But thank you for taking the time. I read those links you suggested and they made me feel a little better about my situation. Still is very scary at this time. I will definantely be doing some reading this weekend and am also gonna schedule some more appointments with local lawyers.

[SinkingFast]

None of us have died, so far, Spender.

BK is gut wrenching, to say the least. We'll often say we can't wait for things to be normal again, but we know that normal is gonna be different now.

The hardest part, I think, was realizing where we were and then deciding what we needed to do to fix it. And it's really all down hill after you file.

You should be OK on your house. You're allowed $75K equity in Connecticut.

http://www.connecticutbankruptcylaw.com/exemptions.html

Every site I looked at said nothing about doubling. Many States will allow debtors to double exemptions if both Husband and Wife are filing Joint. So that's a Q you need to ask local attnys.

Household goods, clothing, etc. won't be a problem. There's no $$ limit on that.

The cars may be a problem. If you're a traveling sales person and need a car for your job, you might ask attnys if you can take one vehicle under the "Tools of Trade" Exemption. From what I can tell, the "Tools of Trade" Exemption is unlimited.

[richard2500]

relax

You seem to be doing the right thing. See an attorney perferably one who is certified by the American Board of Certification in bankruptcy or a member of the National Association of Consumer Bankruptcy Attorneys. Both can be found on line and have lists of members.
You will not lose your house unless you can not pay the mortgage. Losing the equity loan was lucky not bad. Every state has a home stead exemption that protects the equity in your house above the mortgage. You can check the exemptions for your state on line. Let the attorney know about the car accident, If you have a law suit you will want to file a chapter 13.
good luck