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[sspencer09469]

I've only just started thinking about bankruptcy. A typical story: recent divorce (pretty much got the shaft), high child support payments, relocation expenses...basically about $50k in unsecured debt, most of which was inherited from the marriage. Plus now an $8k tax debt.

The only bright spot is that my income is quite good, but that seems like a double-edged sword: I can probably manage to limp along for awhile longer, just making minimum payments, but that leaves nothing for emergencies (which are bound to occur at some point), nothing for retirement savings, and provides no light at the end of the tunnel.

I own a home and a car, no equity on either.

I've done some preliminary research, and everything I've read about bankruptcy talks about being behind on payments and so forth. I'm not behind, I want to act before that happens.

Any advice?

Thanks!

Scott

[DivorceRuinedMe]

I wasn't behind on any payments either when I decided to file. It was a business decision. My divorce basically ruined me too. It left in it's wake a house that was going to get foreclosed on and 30K in legal debt. I figured if I was losing the house that the ex refused to leave and that was going to zing me on the credit report then I mine as well just file for Chapter 7 and get rid of the monstrous legal debts too. The mortgage was JUST in my name so he basically walked on the house without it affecting him at all.

My advice is go talk to a couple of bankruptcy attorneys in your area, lay out your situation and figure out what is best for you. For us to help you here, we need to know what state you are in and what your family size is, also what your income is like (we need to know these things to determine what chapter you would file). You aren't behind on any payments so that leaves a C7 open to you if you fall under median or have very little disposable income after your expenses are paid each month.

And if you are going to go the bk route, then definitely stop paying all your unsecured creditors (unless you've recently been on a spending spree - then make some more payments, at least a few to show good faith). You will just be throwing good money after bad if you pay anything more to the credit cards if you are going to file to get the debts discharged anyway.

[justplaintired]

We were not behind on anything when we made this decision. We knew too it was just a matter of time before that happened, and wanted to act before a garnishment happened, or we ended up behind on our home, which we did not want to happen, not over a cc anyway, like divorceruinedme, this was a business decision, we needed to get our life on track again, and this was our only choice.

We met with an attorney in Jan and after doing so, we stopped paying cc and quit charging. It has been a lifestyle change for sure.

Our credit was excellent before this, now I am sure it sucks. We had never, ever been late on anything. We too were only able to make min payments and our balance kept growing trying to keep those cc paid.

I too agree, talk to a couple attorneys, find out your options. They can advise which Chapter will work for you. Also, if you have made this decision to file, stop paying and stop charging. You can keep your home with no equity and the car also, but your attorney can advise you better on that.

I know when we stopped paying I felt so guilty. I worried about creditors calling..., but we felt we had no choice, we just couldn't live like we were.

Good luck!!

[sspencer09469]

Thanks...

...for the speedy & informative response!

I live in Virginia and earn $150k. Which, to my mind, sounds crazy; how can someone who earns that much be thinking about filing? (Note that it's not SO much in the Greater DC area, where the cost of living is pretty high...but it's not too shabby, either...)

Based on that, if I understand things correctly, Chapter 13 seems like a better (or maybe the only) option. I do have the ability to pay some of these debts, but if I try to carry on in the same way, I'll be making minimum payments...well, probably forever. If a bank would lend me about $50k unsecured, with an agressive repayment plan, I would be inclined to go that way...but I can't see that happening, especially now that my credit rating has taken a beating.

I just want to be debt-free, except for my house and car.

The thing that's worrying me the most at the moment is that a huge chunk of "no interest/no payments for 12 months" debt is due to slam me this fall...as you know, those interest rates will be huge if I'm unable to pay in full, which of course I will be unable to do the way things stand. (That debt is furniture...I had to furnish a whole house from scratch...presumably giving it back isn't an option, and would of course leave me with nothing to sit or sleep on...)

How does all that change things?

Scott

[Flamingo]

You pretty much know when you need to consider filing bankruptcy. We too were not behind on anything up to the time we retained our attorney. When we retained him, his first advice was to stop paying all credit cards and do not use them for anything, stop making the car payments but continue to pay the mortgage and utilities. We retained him two months before filing Chapter 13. We wanted to include our 2001 taxes in our filing on which I knew we would owe a large amount due to all the financial issues from that year as to my hubby's job loss so our filing was a bit delayed. We just could not take trying to stay afloat anymore by making minimum payments and robbing Peter to pay Paul and just running up higher debt. There was no genie in a bottle to save us. You know when you are up against the wall and have to do something.

BK consultations are almost always free. The best way to find out exactly where you stand financially as to possibly filing is to make a few appointments and get some advice/input. Take with you to the appointments a complete listing of all your bills, monthly payments, paystubs, sources of income, asset listing and your most recent tax returns. Then you will know better what to do. Best of luck to you.

[sspencer09469]

I searched this forum, but didn't immediately see anything about how to choose an attorney. I know that this field has plenty of sharks swimming around, so I don't want to go the yellow pages/google route.

[DivorceRuinedMe]

I searched this forum, but didn't immediately see anything about how to choose an attorney. I know that this field has plenty of sharks swimming around, so I don't want to go the yellow pages/google route.

Look for an attorney that is martindale hubble AV rated. If you google that you will see what I'm talking about.

http://www.martindale.com/xp/legal/About_Martindale/Products_and_Services/Peer_Review_Ratings/ratings.xml

[One Half Full]

I wasn't behind either. Winter hit, the bills went up and I had to choose food or freezing to death. I can only pay my bills in the summer. If you dont have enough for emergencys, or retirement, and can only afford "the basics" then you should do it (your own choice though). Although you make a good paycheck, you may be in a lower income bracket than you think with all the other things draining your account, and might want to downsize and re-organize. (Smaller house, cheaper car, not going certain places, etc.)

[sspencer09469]

Attorney

Well, I contacted an attorney via e-mail, asked a couple of simple questions. He came back sounding really miserable, said I probably wouldn't qualify for either a 7 or a 13 due to my income level...but that he would be happy to do an hour or two of work on my case just to make sure. He also said he's the most experienced bankruptcy lawyer in my area (he was listed on that website, by the way). He was pretty rude, but then again is a nice guy really what I'm looking for here?

[keepmine]

Keep looking. Of course you would qualify for a 13.

[sspencer09469]

Maybe he meant to say 7...but I already knew that and said as much in the original e-mail to him.

I thought you could earn 10 million a year and still file a 13!

Anyway, I will definitley pass this one by...

Thanks!

[lrprn]

Maybe he meant to say 7...but I already knew that and said as much in the original e-mail to him.

I thought you could earn 10 million a year and still file a 13!

On the income side, Chapter 13 requires filers to prove that they earn sufficient income to repay some or all of their debts - that's all.

However, there is a debt limit for Ch 13. If your debt exceeds the maximum currently allowed by law (secured debts > $1,010,650 or unsecured debts > $336,900) you can't file Ch 13 - http://www.thebklawyer.com/thebkblog...-april-1-2007/ . Also if you haven't submitted tax returns for the last four years, that can keep you from filing ch 13 too.

Are your debts under the maximums and have you filed the last four years of tax returns?