Our situation - should we worry?

[kari]

First of all, what a great website that I'm sure has eased many minds to know that they are not alone. Secondly, I just wanted to put my situation out there and get some opinions on whether we might have any problems filing. Aside from home and utilities, we have the following debt: $22,000 + in medical bills (which will continue to climb after we file), $27,000+ in cc, $25,000 home equity line and three car payments (which we plan to keep). Our monthly take home is about $6600, with our outgoing at about $7400 not including school lunches or entertainment. We obviously aren't paying all of that out each month, but that would be the total if we were paying on our medical. We got a little over $2000 back in taxes that is gone, took our $3300 against my retirement, which is also gone. My son is graduating this year, so I have been paying down for items for his party. We are current on all of our bills (except medical). My other son has a very rare disease that will progress even more over the years, so there will be more medical bills rolling in all the time. Questions: Will anything happen with our home? We are current and wish to keep paying on the home equity line. Will they question where our taxes and loan against 401k went? Should we wait until the end of June - after my Son's party and then file. Should we stop making payments on our cc? Our situation resulted from my Son's medical issues and a $55,000 reduction in salary starting about three years ago. Do you think we'll have any issues? Sorry this is so long. Thanks for any advise.

Kari

[kari]

Any advise would help please.

Thank You
Kari

[vic6string]

This sounds like a lawyer situation

I would definately speak to a bankruptcy lawyer if I were you, and sooner than later. The new bankruptcy laws are coming, and by what you make, you are one of the families that likely will be forced to go chapter 13 and not even have chapter 7 as an option. Plus, there are issues under the new law with just how much home equity you are allowed to claim as exempt, and I am assuming you have a reasonably expensive home with your salary level. If you do file, you will need to distance yourself from big purchases and withdrawls by at least 3 months, and the law will go into effect more than likely towards the end of this year, which means you don't have a whole lot of time available to you. If future medical situations will lead to more big bills, chapter 13 probably won't help so much as it will put off the inevitable. I am sorry to hear your problems are health related, and wish you the best of luck.

[kari]

Thank you for the info. Our home is worth approx $216,000, with our mtge at $168,000 and a $25,000 home equity line of credit - which would only leave us with about $23,000 in equity. Is that going to be a problem with the way the rules are now? We hope to file by late June to early July, which should keep us under the current rules. Thanks again for your help.

Kari

[robivi3]

What State are you in? I'm in Florida where the primary Home is untouchable.

Be careful about waiting. I would try and file now. The closer the new rules are to being law the more likely the Trustee will begin defacto enforcement. In other words the Trusttes are already tightening up on things, I was a prime example. Put nothing past the Trustee.

[kari]

We live in Illinois. What happened with you with the Trustee?