Newbie needs advice on the ch 7

[doglover1970]

I am trying to figure out what to do. I have done some research, but seem to get more confused.
I think that I have no other option than to file for bankruptcy. I am in Texas and was trying to figure out if I can (and if I would want to) file for chapter 7. My wife and I make around 75k, per year, (much less than we did 1 1/2 years ago). Now we are up to our heads in debt. we owe 145k on a house that is probably valued at 165k. We have two vehicles that we owe around 43k for (combined). We have a boat that is valued at 30k, but we owe 32k. I have tried to sell it, but no luck. We have probably 24k in loans, credit cards.
As it is, we barely make ends meet by paying the mortgage, utilities and auto loans and the boat loan (the autos and boat are with the same lender and are auto paid).
Any help or thoughts are Greatly Appreciated.

[AngelinaCatHub]

Ahhhh, you need help, yes!! First thing to do is make a firm decision as what to do. I see C7 in your future, but you need to see several bk attornys NOW. When you make that decision, get the cars and boat stopped on autopay. Use that money for your bk. If you have financed these at the same bank that you have your savings or checking in, move it. Don't use any credit cards from now on and get some distance in time away from last use. Convert any assett funds into exempt stuff you will need such as food, clothing, blankets, etc. Can you get along with one car? Pay manually on that one only. Get the C7 book from Nolo.com and it can be downloaded in pdf format for about $17. Stop paying credit cards, and get going as I think the rush will be on as the banking gets worse. 'Hub Oh yes, most important. Keep reading here and keep your spirits high.

[doglover1970]

AngelinaCatHub Thanks for the response.
We work in different cities so we need two vehicles, is there any way to keep both, or get approval for two? I just did a means test on line and it stated that I should have about 80 to 110k to pay over the five years (these numbers are not accurate). My wife would love to keep the house, but I am not sure that it is in our best interest. Are they likely to take it as we do have some equity in it?
Thanks,

[deafbroke]

Taking your house will depend on how much the homestead exemption is in Texas. As far as your cars, it will depend on if you owe more than they are worth, and the allowable car exemption in texas. An attorney can answer those questions fast. Also it does look like Chapter 7 might be your best route. If you do decide to stay in the house and keep the cars, do not reaffirm them. It is not needed, and it's in your best interest short and long term not to reaffirm them. It would be best to let the boat go. Stop payment on the boat and CC's. If you have accounts at credit union, close them and move to a bank. If loans and cc's are through credit union they will be cross collateralized. first thing to do is talk to a bankruptcy attorney.

DB

[doglover1970]

Thanks deafbroke.

[Frogge]

Another chime in -- ITA, see an attorney, don't charge anything. Good Luck.

[Help!]

Are you above the median income for TX? You didn't mention children, so I would assume that you are. At first glance, I don't think you will be able to file Ch. 7 because your unsecured debt total is so low (it may not feel like a small number, but in the context of bankruptcy and your income it really is). Here's why... On the means test, your disposable income is calculated based on all sources of income and only certain allowed expenses. If the disposable income over 5 years amounts to 25% of your unsecured debt, you would not be able to file Ch. 7 without special circumstances. Since your total unsecured debt is small, it takes less disposable income on the means test to reach that percentage.

This is only my opinion and a first-glance one at that, so if I were you I'd take advantage of those free consultations, maybe do some online to get as many questions answered as possible without paying any fees or driving all over town. You may want to try to rough-draft a means test first, so you have all the information they'll need in hand and already have an understanding of how they determine Ch. 7 eligibility.

If you're sure you're going to file BK in one form or another, I'm with 'Hub on stopping those automatic payments. It took several months to get creditors to stop and one creditor started running multiple payments after we told them we planned to file (right before the automatic stay took effect and with the excuse that it was a "glitch" in their electronic payment system).

Most importantly, you found this forum and because of it you will have a better chance of success and a smooth BK!

[JRScott]

Okay Let me ask a few questions:

What is the size of your household? (That is is it just you and your wife?)

What do you make a month gross?
What do you make a month net? (Are you taking out a large amount of extra taxes, in other words do you get a large refund every year)
What is your house payment?
What is your 1st car payment?
What is your 2nd car payment?
What is the boat payment?
Do you owe on any student loans?
Do either of you owe alimony or child support?
How much do you spend in food a month?
How much do you spend on clothing a month?
How much do you spend on personal hygeine a month?
How much do you spend on gasoline a month?
What is your phone bill a month?
Do you also have a cell phone? What's its bill?
What is your gas bill a month?
What is the sewer bill each month?
What is the water bill each month?
How much do you spend on car maintenance a month?
What do you spend in property taxes monthly?
What do you spend on car taxes monthly?
What do you spend on home maintenance a month?
Do you donate to charity regularly, if so how much per month?

(Answering these questions will also help you get a look at your financial situation)

What is the payment on any remaining secured debt?
What is the payment on any remaining unsecured debt?

[JRScott]

Doglover just PMd me with replies:

JRScott,
you replied on a thread of mine back in July (I did not see your reply until now). I have answered all of the questions, but felt better sending this as a pm. Any help or thoughts that you have would be greatly appreciated.
Thanks again.

Okay Let me ask a few questions:

What is the size of your household? 3 at this time (wife, daughter and self) will have another child first of Feb.

What do you make a month gross? 4062 (m) 2460 (w) 6522 total
What do you make a month net? (Are you taking out a large amount of extra taxes, in other words do you get a large refund every year) 2785 (m) 1950 (w) We usually get around 3500 back at tax time.
What is your house payment? 1540
What is your 1st car payment? 503
What is your 2nd car payment? 485
What is the boat payment? 485
Do you owe on any student loans? 125/month
Do either of you owe alimony or child support? NA
How much do you spend in food a month? 600
How much do you spend on clothing a month? 185
How much do you spend on personal hygeine a month? 60 (above groc. Bill)
How much do you spend on gasoline a month? 450
What is your phone bill a month? 85
Do you also have a cell phone? What's its bill? 175
What is your gas bill a month? NA
What is the sewer bill each month? See water bill
What is the water bill each month? 85
How much do you spend on car maintenance a month? 60
What do you spend in property taxes monthly? NA it is in house payment
What do you spend on car taxes monthly? 12
What do you spend on home maintenance a month? 140

Sorry it was to long. Here is the rest.
Thanks again.

Do you donate to charity regularly, if so how much per month? (used to but can not afford at this time.)

Auto insurance is around 210/month
Cable is 75/month

(Answering these questions will also help you get a look at your financial situation)

What is the payment on any remaining secured debt? 85k or (226k when you add house)
What is the payment on any remaining unsecured debt? 26k, but 15k I would like to pay back on my own and not list it.

I am concerned as I own land in another state that is very special to me as my father has passed away on that land. Someone mentioned that I may be able to list it as a business as I have two relatives that jointly own it with me and we are able to sell timber and may be able to sell gas rights.

Thank you for any thoughts or advise that you are willing to offer.

[JRScott]

Okay My new questions:

Are you behind now?

Your house payment is only 25% of your income that's actually very reasonable. Since you have equity in it I would probably keep the house. I don't think you'd have trouble exempting its amount.

I do believe you'd probably be in a chapter 13 though based on what you've said. What I would do though is possibly delay filing til after the birth of your next child. That would make you a family of four. That might help you on expenditures on the forms as well as qualifying for possibly a chapter 7. However you probably should ask a local lawyer.

One thing I missed do you have medical insurance? How much is it?

[doglover1970]

It is around 500 a month for medical and life insurance.
300 into retirement.

[JRScott]

You might sit down and calculate the means test using what you have now. Do both parts and see what you come up with.

Then do another one say for Feb where you have a family of 4. See which is better

[debtmonster]

You can check out the means test by visiting the Means Test Calculator