Don't know what is best

[Unsure14]

Hello, I am new here and very concerned about what might happen to our family.
I have had to cash advance off and on for years in order to keep the bills paid. Husband stayed at home with the kids, while I started in Real Estate. Three years ago I rolled much of this into a 2nd. Now my two mortgages are about $40,000 less the house is worth, (if it is brought into good condition).
Husband went back to school, (new $30,000 loan), we thought he would get hired. Cash advanced $20,000 last winter to cover bills until he secures a job. Had to cash advance $10,000 more in Jan. Things were looking brighter in Feb. He got a good temporary possition, and I had sales coming in. We bought a used car, $14,000, and put $2,000 down from a CC, and $2,000 in a trade. It is blue booked at $13,000. This is car I must use for work. Our other car is old, worth about $400.00. We decided that we should fix up the house and sell it. Take any extra, pay off CC's and rent for awhile. But in order to get the highest price we would need to make needed repairs to the home. We had gotten some money from an insurance claim to cover a portion, but I put that aside for my kids private school tuition for next year. To get the house fixed up, we cash advanced $20,000 more in Feb, but repair bids came in at $28,000. We didn't want to cash advance any more, and felt like it would only make us break even. Now the money sits in our bank account. Husband didn't get hired on permanately as expected and a few of my buisness deals died with no commission to me as I thought. We made only $20,000 since Feb. (Made $25,000 for 2007, because husband in school and I couldn't work as much because I had to take care of kids also)
We looked into refinacing, but that was going to cost $5,000 and thought that would only take away from the bottom line when we sell it.
Questions:
I want to move out and try to sell the house as is. I want to find a rental while my credit is still good. I can't afford Mtg and CC's and rent, so plan to stop Mtg payments soon. How will this look with so much money in my account? I don't want to wait to be kicked out, or not be able to rent the place I want because of bad credit.
My husband won't be hired on till fall if then, and I am not sure if I will make more sales. Now, I will need the money in the account to cover our living expenses till then. I will also need money for a lawyer and rental fee's.
I don't want to file, but if things don't improve, we will have to by the end of the summer. That will be about 5 months since these large cash advances. Many of you suggest 6 months. I will talk to an attorney when the time is right, but have no idea when that should be. If I need more time between these cash advances and filing, does that time count if you don't make payments. I can only make payments on CC's till August. Then I will be out of money, except a month worth of rent.
If the house doesn't sell, then I will have to include that. I would rather have the Trustee sell it, and pay off what debt they can.
Will the trustee go after the private school, since I paid ahead for next years tuition. This was the only way to secure their spot.
I would file a Ch 7, since our income is well below the median. Assuming nothing improves. I would like to move to a better school district incase I can not afford private tuition in the future. I want to do what is right and fair, and what is best for my family. But I am also extreemly concerned about running out of money before we have more income. I feel an urgent need to get control of the situation, and feel helpless at the same time. Any help would be appreciated.

[Phillymanhere]

Hey,
Sorry to hear about your situation. Sounds overwhelming ... you've come to the right place. Well, I'm a newbie here, but I think NOW is the right time to start meeting with attorneys. Why not? ... You can get good information; you can explain your situation to them and get good guidance regarding bk in your area.
You can even bring up your hesitancy with filing and get their response to that.
Questions: are you still using the cards? Are you still making cc payments?

[JRScott]

Okay sounds like many of us you've let things go to long in hopes of things improving. That's pretty typical of all of us that go through bankruptcy.

On the matter of the loans for your husband's schooling, I assume those are school loans? If so those are not dischargeable in a bankruptcy.

You mentioned you worked in real estate. You ever considered attempting a short sell. It you could get the primary and secondary to agree to a short sell, you might could sell the house and eliminate both of those debts. One thing that might could assist in convincing them to do such might be the repair bill.

I'd stop paying the CCs now. There is no sense in paying unsecured debt when you are considering bankruptcy.

Anyway based on the little snippets you've given us you could be eligible for a Chapter 7. Just keep in mind student loans can't be discharged in a chapter 7. I'd schedule 3-4 free consultations with bk lawyers in your area and run by them your case and see what they think.

[Unsure14]

I am still planning on selling the house. I think it will sell for at least what I owe on it, but if not, then I might have to do a short sale, or is it better to give it back to the bank?
If I stop paying on the CC's, I am afraid that I might ruin my credit score, and what if things pick up... but I also have this gut feeling like I might be past the point of no return. So, if I stop paying, then won't it look like I took the money and didn't plan to pay... cause I have the money sitting in my account. I feel strange not paying, but also worry that I won't have anything to live on.. If I file, I am afraid how all this wil look.. any suggestions.

[epiphany]

If I stop paying on the CC's, I am afraid that I might ruin my credit score, and what if things pick up... but I also have this gut feeling like I might be past the point of no return.

That feeling is familiar to many of us here. Like you, I kept saying well, things will pick up, I don't want to ruin my credit...I don't want to be in this mess so I won't be, ignoring the voices in my head. My refusal to face the reality of my situation just dug me a deeper hole that would not have been nearly as bad as it is now if I had listened to the voices in my head.


Your credit score is the least of your problems right now. You need to sit down with an attorney and discuss your options. Then decide what is best for you.

ep

[JRScott]

I am still planning on selling the house. I think it will sell for at least what I owe on it, but if not, then I might have to do a short sale, or is it better to give it back to the bank?
If I stop paying on the CC's, I am afraid that I might ruin my credit score, and what if things pick up... but I also have this gut feeling like I might be past the point of no return. So, if I stop paying, then won't it look like I took the money and didn't plan to pay... cause I have the money sitting in my account. I feel strange not paying, but also worry that I won't have anything to live on.. If I file, I am afraid how all this wil look.. any suggestions.

Keep in mind that if you do do a short sale, you'll get a 1099 next year for the difference between what you owed and what you sold the property for. You would be responsible for taxes on that. In some cases its better to just let the property go through the bankruptcy if you've got a lot of problems.

I struggled for 2 years not wanting to file. Things never improved, in fact they got worse. I understand the desire to pay the debt, I understand the fear. All I can say is take it up with the Lord and see what is best for you.

[justplaintired]

I struggled for 2 years not wanting to file. Things never improved, in fact they got worse. I understand the desire to pay the debt, I understand the fear. All I can say is take it up with the Lord and see what is best for you.

This sounds very much like us, we kept thinking things would get better and instead they just kept getting worse. Wanting to do the right thing and keep our credit score good got us deeper and deeper in debt.

Good advice here and talk to attorneys, find a good one, one you feel comfortable with. Good luck!

[Cali]

I would suggest stop paying CC's, set up consults with attorney's, and let the house go.

Good Luck!

[Unsure14]

Thanks for all the advise.
I am just really concerned about not paying the CC's because it hasn't been that long since we took out the large cash advances and I wonder how it will look that I used all that money that was going to go on house repairs, to cover our living expenses.
So I wonder if I should pay them for a couple more months, and then wait and see if things pick up. I wish I would have found this site before, but I wasn't thinking about BK when I did these transactions. Now after reading all these posts, I feel like I did about everything that you weren't suppose to do.
If I need distance before I file... how does it look if I only made one or two payments, then didn't pay for 5 months, (while my checking account slowly dwindles down paying household things like food, rent etc...) Will this still be counted as time away from those charges. Any advise would help.

[Phillymanhere]

It's time for you to start meeting with attorneys. I took a cash advance for 8K in October 2007. I visited several attorneys and all of them said it was good that I made about 5 payments on this account. (I stopped paying at the beginning of this month.) One wanted me to continue paying on this account, but I didn't hire him. I am hiring a trustee.

So I would meet with attorneys before you quit paying on the account with the huge cash advance ..... that's just me. Remember, every district is different and attorneys can give you a feel for how your particular case will be viewed in your particular state and legal district.

Pick the one whom you trust and who seems really sharp ... hear their advice ... you can bring it back here once you get it .....and you'll get the wisdom of the crowd. So you're asking good questions. by the way, if you don't like any among the 3 or 4, then keep going .... the initial consultations are free.

by the way, I feel for you on feeling like you're right on the edge. If you're feeling that, then there's a 99 percent chance that you are in financial trouble. Denial can help us cope with impossible situations; unfortunately denial also gets us in trouble when it comes to money. Many of us have been in your situation.

But the good thing is that you've come here. You're getting serious. You're facing the reality. Do NOT worry about your credit rating at this point. That will take care of itself once you get your financial house in order.
Good luck.