HELP!!! - BK13 or Debt settlement???

[suzyqpug]

Ok, I don't know what to do - so i really need some answers. Ok here we go - I have alot of CC's approx. about 185,000.00. I was late on some payment months ago and some of the cc companies naturally uped the interest rate. So now it out of hand and I have gone thru all the savings and even selling on ebay to meet the payment. I have a 1st and 2nd mort. the 2nd was to pay off cc's and then I recharged. Needless to say, it out of hand. SHould I declare at BK 13 or I called a debt settlement compnany called Debt options. My hubby makes about 160,000.00 oer year with bonus every year. Believe it or not we cannot make ends meet. I also have a car payment for 545.99. What should I do??? Please help. Also, if i file the BK 13 would the 2n mort. be included with that and the car payment. I do want to keep both my house and my car (Lease) thats up in Sept 2009. Thanks so much.

[Tromploi]

Hi, I feel for you. In a very similar boat, not quite as much debt and about the same income and can't make it either. What the H?? Not sure about the cars as far as including them and keeping them. I am keeping mine but not including them in the BK. But I do know that what I learned yesterday about our 2nd is, that the 1st needs to be more than what you get for the house for the 2nd to be wiped out. In other words, if you're first is $400K, then the value of the house needs to be less than that, not less than both mortgages combined. In my case, our first is $354K, our house is worth more than that. With both mortgages combined, the value is less but it doesn't matter, so we have to keep our 2nd. Which is fine. Hope that helps some.

[Lajazz947]

Same boat here.

Do not fret.

Call an attorney right away and check out your options.

They will run a means test and you might be surprised. There are lots of exemptions and reaffirmations available to you.

I think that I might qualify for chapter 7 but even a 13 is better than my current payment requirements and I can keep our home.

Do not use any CC's or take out cash advances. That will throw you into a fraud status. Don't transfer any property or give money away to friends, family etc.

Do NOTHING until you speak to an attorney.

Hope this helps.

[suzyqpug]

Thanks everyone. In the meantime, a debt settlement company called e back debt options and is trying to get me on a plan. I am leary about them. I don't trust anyone. People suck. When they know you are down and out they will sink into you more.

Now about the no money to family. My just went to a wedding an gave them a check. Will the courts want that back? I am literally getting sick to my stomach. I don;t want my family to find out about this. If the courts see the check they will want the money back right? Also, I give my dad a check every month for 150.00. cause they are poor and i have been helping them pay for his transportation. Will they question the check that I give him for 150.00 a month? How much they look into. I have no savings accounts at all anymore, just a checking that is drained everytime my hubby gets his check. Ohhh, what a mess I got us into.

[Frogge]

Gosh, I'm hesitant to post this but isn't there an allowance on the means test for continues support for family members that you've been doing all along? I remember seeing something like that.... someone correct me if I am wrong.

How much was the wedding check?

I agree with jazz, see an attorney and have them run some numbers. I too think you may be surprised.

[suzyqpug]

1100.00 check. Will the trustee look at every check that I have written and how far do they go back?

[Maximo]

We were looking at debt settlement companies too but they scared me when they said to "just ignore the calls for a couple of months". It is crazy, I feel your pain so trust me, you are not alone! Your situation sounds really close to mine except for the $150 you give to your father.

[suzyqpug]

The debt settlement company tells me that don't talk to the cc people. Well HELLO I have 27 Credit cards. My phone will be ringing non stop. I think I am going to call an attorney and speak to him too. The debt settlement company is a fast talker. Telling me that they feel for me and that they are helping me. Somehow, I feel they are stabbing me in the back. I asked her that if the Credit card settlement for an amount other then the balance. Like if my account has a 50,000.00 balance an they settle for 20,000.00 what happens to the 30,000.00. I told her that I heard that at the end of the year that i can receive a 1099 for all the debt that was dismissed. Well, I cannot have that, I will be in hot water completly. I am sooo confused!!!!! She tells me that mose companies don't send 1099's but some do, when I ask her which ones she says "Oh not any of yours". Well, i have almost all there are. LOL I really shouldn't laugh but 25 cards and you mean none of them will send then 1099? She said oh i will check. I just don't trust them.

[Frogge]

I have looked into debt settlement too, and the non-protection is what scares me, I am afraid that -as you're saying -you'll get it all setttled and then get whopped with 1099's, or judgements, or something -there seems to be a lot of problems that can occur if you don't have a good attorney that knows the law and is fighting for your rights.

With the amount of debt that you have and number of creditors that you're dealing with, I'd want that protection. It won't cost you anything to consult with a couple attorneys. JMO

[Frogge]

She tells me that mose companies don't send 1099's but some do, when I ask her which ones she says "Oh not any of yours". Well, i have almost all there are. LOL I really shouldn't laugh but 25 cards and you mean none of them will send then 1099? She said oh i will check. I just don't trust them.

That comment alone would have me running out the door!

[suzyqpug]

I just talked to an attorney and he tells me that I have no choice but to file a chapter 13. I can still keep my house and vehicle. He says that usually its a 20-30% pay back and tht it will defiantely be for 5 years cause my hubby makes 160,000.00 a year. He wants 1000.00 dollar retainer. He says it like its nothing. I want to say, Ummm hello, I am having trouble paying my bills, where am i going to get the 1,000.00 LOL... Thanks for all your help everyone. We only have eachother. We are all in the same boat. It feels good to know that there are other that i can talk to that are going thru the same stuff.

[Frogge]

Good for you.

I'd talk to another attorney (or 2, until you feel good about who you're talking with), stop using & paying the CC's and save that money for your attorney and household expenses.

Good Luck! Good to have you here, too.

[liz417]

Hi there Suzy,

I contacted two debt settlement places before I found this site. Yes, they are fast talkers...I had one guy wanting to start right then and there, I told him I needed to speak to my husband who would be home around 8pm. He then asked me to call him (hubby) right now and we could three-way call and get the ball rolling now! First of all, my hubby was shocked at this fast talker, and fortunately had the sense to tell him we would discuss it in PRIVATE and call him back if we decided to go with his company, then I got my a** chewed out for "being easy prey" for scammers. Once I calmed down, I realized that these type of companies do nothing but take advantage of people in desperate times. The debt settlement told me to also stop paying the cc's and just wait it out, put $$ into a savings account for about a year, then they will "settle" the debt for me...yeah right!!
Finding this site has been a life saver for me too!

Liz

[sunshine mary]

I was in the same boat but our combined income wasn't that much. I also was thinking about the debt settlements but I never got a good feeling about it. I believe you get 1099's and have to pay taxes. I personally think BK is a better option, if its a CH7 or a Ch 13 it's legal and is over in 5 years either way. It took me a long time to come to terms with BK but once I did I have never looked back. I wish I had done this 3 years ago !! I wouldn't have a 2nd mortgage and I wouldn't have been so stressed for so long.

Good luck to you whatever you decide

Oh and make sure you talk to several attorneys. I am so glad I did because I never dreamt we would get a CH7 and we were discharged CH7 yesterday Our first 2 attorneys said CH 13 was the only way to go.

[HHM]

The primary difference between chapter 13 and debt settlement comes down to this question

Do you want to control your creditors, or do you want your creditors to control you.

If you file chapter 13, you are in control of the situation.
If you go with debt settlement, you are at the whim of your creditors.