How soon after filing will I lose possessions?

[wannabedebtfree]

This is my first post. We are on the verge of filing bankruptcy and I have a few questions. I am married with 2 toddlers.

If we file Chpt. 7 how soon will we have to leave our home and lose our vehicles? We have a first and second mortgage, the balances are more than what we could sell our home for? We are way upside down on our vehicles also.

Will my husband lose his pension?
Would we lose our income tax refund next year?
My husband gets a vacation check in Nov. usually about $4000, would we have to lose it? It usually goes for paying bills and clothing etc for the children.

Could my husband file alone? His name is the only one on the 1st mortgage, and the 2 vehicle payments. My name is on the second mortgage though.

We aren't behind on any payments. It is just that we only have $200 after our bills are paid each month for groceries, diapers, household, everyday expenses.

Mortg. $1050
2nd $350
Veh 1 $565
Veh 2 $232
Ins. $100
Elec. $80
Phone $80
Cell $45
Sat $45
Trash $20
CC 1 $30 Balance $900
CC 2 $147 Balance $7500 0% til next year
Gas $600 (for husband alone to commute to work)

Total-$3344 (Does not include groceries, household, gas for 2 nd vehicle, clothing, etc.)
Take home Pay-$3640

Do you think we would qualify for Chpt 7?

I am just wore down from trying to make it work every month!! I have been selling household items and clothing on ebay trying to scrounge? up xtra money every week.

Any help would be greatly appreciated!! I have been reading all the posts searching for answers!!

[InDebtInMD]

If you have no equity on your house and are upside-down on the cars, I don't believe you will lose them.

Are you up-to-date on the mortgage?

Are those two credit cards the only debt you have? It doesn't seem like a lot of debt to be filing on.

As far as your expenses are concerned, you need to add in what you pay for food, etc. Account for everything.

From looking it over, it doesn't look like eliminating the cc's will gain you much $$ per month.

My advice would be to try and find a way to get out from under those car payments, that is nearly $800 per month.

[moneytree]

We thought we were able to file a ch 7 last fall and after finally getting all the paperwork & fee pymts together, we were told that we needed to provide a comparative market analysis. We knew then we were sunk. The homes appreciate in our neighborhood a good $30K a year. So we are selling our home and then we will file a ch7. I was told by another atty that rarely do people keep their home in a ch7. We have car loans, so we will not be losing them once we file. We own nothing. Hope 'they' are happy. Bloodsuckers!

[wannabedebtfree]

Yes, it is not really the credit cards that are hurting us. It is the vehicles and the second mortagage. We are prepared to "start over". We would almost be relieved to surrender the vehicles. We would sell them but we can't get anywhere close to what we owe on them.

[InDebtInMD]

We are prepared to "start over". We would almost be relieved to surrender the vehicles. We would sell them but we can't get anywhere close to what we owe on them.

OK. Good luck with everything!

[InDebtInMD]

I was told by another atty that rarely do people keep their home in a ch7. We have car loans, so we will not be losing them once we file. We own nothing. Hope 'they' are happy. Bloodsuckers!

In our case, we had refinanced our house last year and rolled a previous 2nd mortgage into it. It appraised for what the loan was for ($200K). I was concerned that the trustee in our case would question the value. In fact, he did. However, he did not require us to get a more recent appraisal.

At the 341 I saw some of the paperwork the Trustee had and he had done a search on the internet to see what homes in my neighborhood had sold for. The only thing that came close was a house that sold for $190k. There actually have not been a lot of homes changing hands recently in our neighborhood, maybe that helped us.

As far as vehicles are concerned, we have a minivan that is worth slightly less than what we owe, so that vehicle was safe.

The car I drive is paid off, but is a 1994 model in good mechanical shpae but rough cosmetic shape. KBB valued it at ~$1000, so it fell under our exemptions.

[originalhealer]

Wannabedebtfree,

I know this may seem to be crazy, considering this is a bankruptcy forum and I just filed bankruptcy myself.

But, from my heart to yours, YOU DO NOT NEED TO FILE BANKRUPTCY!

You and your family are just overextended!

Here's my advice, take it or leave it, no harm there.

1. Sell that car with that ridiculous payment! Better yet, sell them both and get two "hoopties" you pay cash for!

2. Consider selling the house and moving someplace more affordable! Preferably, someplace closer to your husbands job so he doesn't have to pay so much in gas!

3. Live below your means until your credit cards are paid off and you are out of debt!

4. Go to www.daveramsey.com. Study everything the man says, and you will be out of debt before your children are 5 years old! If I had known about and followed what this man teaches, I would have never had to file bankruptcy!

I know you want the best for your children. It is better to save now so that you can offer them more later, when they are likely to remember it! How many of us remember what happened when we were two? The only thing we were likely to remember is if our parents argued or were unhappy/stressed out.

The number one reason for divorce is financial problems. It is worth it to clean up our financial lives.

That's my advice, you don't have to take it, you can leave it, I just wish I had known this ten years ago.

Peace.

[HHM]

I agree, I don't think you need to file BK and it wouldn't do you much good to do so. At least you have money left over at the end of the month and you appear not be living off your credit cards, your unsecured balance of debt is relatively low.

as originalhealer suggested, you have many options.

[wannabedebtfree]

The thing is we are so upside down on everything. We owe more on everything than what we could sell it for. We are going to try like crazy to get through this. We went today and looked at a '90 Ford Festiva for husband to drive to work. That should reduce our gas bill dramatically!!!

We are going to try and find a way to sell the vehicles. We have a boat that is paid for we thought we could put up for collateral if the trucks sell for less than payoff. (We have tried to sell the boat but with no success.)

Thanks for your comments and deep down we didn't feel like we should file for BK, but sometimes the situation gets so tight it feels hopeless!! I have been listening to Dave Ramsey for the past couple months and I love what he has to say. It was just when I figured our budget, I realized how tight and bad things were. So we are going to try hard to clean our financial life up without bankruptcy. Thanks for the advice!!

[originalhealer]

Your welcome! I had only heard of Dave Ramsey maybe two weeks ago, AFTER I filed bankruptcy. Unfortunately, by the time I had filed, I was at the point of no return, because I had let things go on for far too long.

Consider posting to the forum on his website. Maybe there are other families that have been where you guys are in terms of finances, and they can share their tips for success.

[Lightning]

Sell the boat, and pay off the car loans.

[wannabedebtfree]

(We have tried to sell the boat but with no success.)

YET!

[edwards2]

I have heard of Dave Ramsey as well and read his book - Financial Peace. I am sure you know he was involved very heavily in the real estate market and when it crashed so did he. He had to file for BK. He said it was the lowest point in his life but he sure learned from his mistakes. He pays cash for everything. I dont think he owes anything and he and his wife shop at discount stores. He can afford to shop elsewhere but he chooses not to. Some other financial experts say he is too extreme because he says you dont need any credit cards. They believe you need one for emergencies and to take advantage of all the perks some cards offer. My sister-in-law and brother used theirs during the month and pay it off at the end of the month and they were able to fly the whole family on vacation for free. I would worry that I would be stranded somewhere; need emergency car repairs and not enough money in our account to pay for them. It takes discipline but I do think you need one for emergencies only. Sorry to be so long winded; I dont think you are a candidate for BK either - so dont. We had no choice - you do.

[wannabedebtfree]

Everyone is saying we shouldn't file bk. I know it looks like we should be fine if we sold the vehicles and the boat. We have tried to sell the boat, with no luck. What if we aren't able to sell the vehicles. In my bills that I listed, I did not include groceries or any other household items we need, such as diapers etc. Because after the bills we only have around $200 left for any thing else.......groceries, diapers, oil, gas for 2nd vehicle, repairs, household items.

It sounds ideal to sell stuff and everything would be fine, but its not that easy!! The pressure is on to get this month's mortgage payment paid, I have until the 30th to pay this month's payment, plus the 2nd mortgage payment, electric bill. This is how it is every month. It is just so stressful! I don't mean to whine, I just wish I knew the way out of this mess without filing bankruptcy.

[originalhealer]

As far as selling the cars and boat, consider Ebay. Go national. Also, look at www.craigslist.com. In the past, I have made a couple hundred dollars off of Ebay just selling things I had around the house that I was no longer using. I would do it now but all my stuff is in storage with the moving company.

As for craigslist, you can list the boat, cars, and also do an online garage sale. The secret is photos. You must have clear photos of everything you want to sell.

As far as Dave Ramsey and using credit cards for emergencies, that is why he says, in Baby Step One, to save $1,000.00 in your Emergency Fund. That is my first project. This is how one can survive without credit cards.