Question Should I file, Thoughts?, Support...

[evilxs]

Is a bankruptcy advisable in this situation? Just generic opinions and experiences you may have had... Thoughts? Support. I'm pretty frazzled.

Renting a house in another town, my job forced a move. My house has been for sale for most of this year. First by owner and then now since June with a realty company with no offers. I am juggling 2 house payments, 2 electrical bills, etc. My house can't be priced any lower or it won't be enough to cover, closing costs, realtor fee and the mortgages. The mortgage debt is a first and a second on the house. The equity loaned for the second was true equity representing the money I had paid down when I bought the house. Most of the credit card debt is repairs I did to help sale the house. It needed a roof and new carpeting to even make it livable. Now it looks like I am eating all of that debt because the house it not going to sale for anywhere near the 155k it appraised for. It is currently listed for 134k. I have looked at renting out the house but in my area it will not rent out for enough to cover the house payment and I would have no way possible to afford repairs or landlord issues I would be legally liable for.

I am financially seperate from my husband, he lives in another state and has seperate bank accounts etc. (In fact he has a post up in the chapter 7 forum from when his ex forced him into bankruptcy). He is trying to move here but now that I am looking financially shaky I think he might want to keep out of this picture until I figure out what I am going to do so he doesn't get sucked into this.

My ex noticed I am juggling two households and decided now was a good time to sue me again. He probably knows I can't afford the lawyer's fees on top of everything else.

Income 65,000 net 4000/month
cc Debt 18,342 pmnt ~990/month
Mortgages 120,000 +house rent 1775/month
Student Loans 63,118 pmnt 600/month

That leaves me $635 or so to pay for food, electricity bills for two houses, gas, water, phone, insurance, garbage, etc. Yeah I am upside down. The house should have sold by now. I keep selling off assets vehicles and whatnot to help cover my expenses. My husband with the amount of child support he pays is not able to help out at all month to month. We can demonstrate that pretty easily in court. Pretty much every payday we bottom our our accounts. About every third payday we end up slightly negative. I deferred the student loans and that ends this month so now the 600 will be due again every month.

Is a bankruptcy a viable option in this situation? I could maybe get the student loans deferred out a little furthur, but I am living hand to mouth as it is. We have no cable, internet, and do not go out to eat or go out to movies or anything like that. I don't think I qualify for a chapter seven making as much money as I do.

Please give any and all advice. I worry this just isn't worthwhile for me because I have so much debt that cannot be canceled. I'm pretty stressed out and maybe someone here has been where I am.

I know I should see a lawyer but I need to be sure this is a smart move before taking time I cant afford off of work to go see a lawyer.

[StartingOver08]

How many people are in your household (in residence with you) right now? This makes a difference as to allowed income.

You could negotiate with the hardship department of the credit cards - they will reduce their interest rate to 2% or 4% and stretch the payments over 5 years. You have to close the accounts to do that and not take on additional debt during the hardship period. You can negotiate this directly with the hardship dept - do NOT speak to the CSR's as they do not have the authority to do these types of programs.

Also, you can put your place up for short sale. It is a long shot, but worth trying now.

If there is only one of you in your household right now $1700 is a lot for rent. There are maximums that the trustee will allow (for example in my district $950 is the max for a one person HH).

Since most of your debt is student loans, it might be better for you to figure out another way since student loans are non-dischargable. IMHO

[evilxs]

Thank you for replying. I have a 14 year old living with me. The rent for the place we live is only 800 bucks. It is the $975 mortgage on the house that won't sell where we used to live that is killing our house payments number. I live frugally.

I probably should speak to the hardship departments and do that and I do know I can't discharge the student loans but even with reduced payments we are just living hand to mouth.

Thank you, I will call the CC's tonight. Even if it only helps by 50 bucks that would be so huge right now.

Any other thoughts?

[b_girl]

You could definitely benefit from a visit with an attorney. He/she can advise you whether you will qualify for a 7 or 13 based on your state. I think you should qualify for one or the other based on the numbers you gave. Even a 13 would be helpful, as it would reduce your debt load. But you're right...student loans are generally not dischargeable except in extreme circumstances.

[StartingOver08]

Just a hint when you begin to negotiate with the hardship dept. First figure out what your actual payment would be based on the principal balance now and a 2% per year interest rate. Run an amortization over 60 months (go to bankrate.com for the cc calculation). That would be your MAX payment goal. By the way be persistant - the CSR's really don't want to put anyone through to the hardship dept (I think they are afraid everyone will try it!!!)

When I initiated my negotiations with the cc hardship depts I started at about 50% of the number I would eventually end up at - (which was 25% of the payment I was making at the time). You can save a lot more than $50 depending upon the debt.

Now, as to your house - if you do not want to do a short sale - try a contract for deed - then you will not have to come out of pocket for funds and will actually make money monthly.

If your agent does not know what a contract for deed is - or an installment sale - get another agent.