Help !!! Considering Chapter 7 (long Thread)
**LONG**
Hi Everyone,
I've been lurking around here for the last week and have decided to post my scenario for feedback and help.
My wife and I live in Southern California, and we are drowning in Credit Card debt and seriously thinking about Chapter 7 to stop the madness. We are not rampage spenders nor are we making any luxury purchases.
I worked in the Mortgage Industry for 5-years before I was laid off last year, my wife is a teacher barely bringing in enough to make it. I was laid off from a MAJOR Sub-Prime Lender in April 2007 and was unemployed for 9-months until late December 2007. I didn't get my first paycheck from my new job until Mid-January 2008.
Before my layoff, I had approximately $20,000 in CC Debt, 2 Car Loans ($30k & 16k), excellent FICO/Credit History. We currently have an Interest Only/ARM Loan and almost done refinancing into a 30-yr Fixed (yeah I know about the I/O, stupid).
After my layoff, I had to cash in my 401k ($13,000 after penalties) to live on during this period. We also used our 2006 Tax Return to pay for COBRA during this period because we had a newborn child in November of 2006. COBRA cost an arm & a leg, $15,000 total while I was unemployed. I took Unemployment Insurance for 6-months but it wasn't enough and I ended up taking out a total of $30,000 in multiple Balance Transfers during this period to keep our household afloat.
I also had to Balance Transfer another $35,000 to refinance our home into a 30-yr fixed in order to not lose it to Foreclosure. I was lucky that I had BARELY enough value to even refi, hence the $35,000 to cover the difference in Loss of Value of my Property/Short to Close.
Now, I am $85,000 in the hole in Unsecured Credit Debt and the Minimum Payments alone amount to $2,000 a month. The Minimum Payments are killing off my Disposable Income and actually after taking a sample Means Test, I find my wife and I are Negative Disposable Income by $600 + a month.
I have a decent paying job now ($80,000 annually, wife $38,000) but we still find ourselves broke and busted every month. We are way above the Median according to the IRS website.
We would like to keep our home and both cars and not give them up in Chapter 7 but at this rate, we cannot keep this up for long. We are one more major event away from losing everything.
Do we sound like candidates for a Chapter 7 even though we are way above the Median?
BTW, I would be filing Chapter 7 alone since all of the credit debt is under my name. My wife is just an authorized user on these accounts. We were planning on waiting about 6-months before filing so it doesn't seem like we're trying to commit fraud. Also, my wife filed BK/CH 7 almost 10-years ago before we were married.
Any comments and help would be greatly appreciated !!! Thanks !!!
Hi Everyone,
I've been lurking around here for the last week and have decided to post my scenario for feedback and help.
My wife and I live in Southern California, and we are drowning in Credit Card debt and seriously thinking about Chapter 7 to stop the madness. We are not rampage spenders nor are we making any luxury purchases.
I worked in the Mortgage Industry for 5-years before I was laid off last year, my wife is a teacher barely bringing in enough to make it. I was laid off from a MAJOR Sub-Prime Lender in April 2007 and was unemployed for 9-months until late December 2007. I didn't get my first paycheck from my new job until Mid-January 2008.
Before my layoff, I had approximately $20,000 in CC Debt, 2 Car Loans ($30k & 16k), excellent FICO/Credit History. We currently have an Interest Only/ARM Loan and almost done refinancing into a 30-yr Fixed (yeah I know about the I/O, stupid).
After my layoff, I had to cash in my 401k ($13,000 after penalties) to live on during this period. We also used our 2006 Tax Return to pay for COBRA during this period because we had a newborn child in November of 2006. COBRA cost an arm & a leg, $15,000 total while I was unemployed. I took Unemployment Insurance for 6-months but it wasn't enough and I ended up taking out a total of $30,000 in multiple Balance Transfers during this period to keep our household afloat.
I also had to Balance Transfer another $35,000 to refinance our home into a 30-yr fixed in order to not lose it to Foreclosure. I was lucky that I had BARELY enough value to even refi, hence the $35,000 to cover the difference in Loss of Value of my Property/Short to Close.
Now, I am $85,000 in the hole in Unsecured Credit Debt and the Minimum Payments alone amount to $2,000 a month. The Minimum Payments are killing off my Disposable Income and actually after taking a sample Means Test, I find my wife and I are Negative Disposable Income by $600 + a month.
I have a decent paying job now ($80,000 annually, wife $38,000) but we still find ourselves broke and busted every month. We are way above the Median according to the IRS website.
We would like to keep our home and both cars and not give them up in Chapter 7 but at this rate, we cannot keep this up for long. We are one more major event away from losing everything.
Do we sound like candidates for a Chapter 7 even though we are way above the Median?
BTW, I would be filing Chapter 7 alone since all of the credit debt is under my name. My wife is just an authorized user on these accounts. We were planning on waiting about 6-months before filing so it doesn't seem like we're trying to commit fraud. Also, my wife filed BK/CH 7 almost 10-years ago before we were married.
Any comments and help would be greatly appreciated !!! Thanks !!!
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