Do we qualify for chapter 7 and a few ?s

[jenjen123]

Hi,
I am a stay at home mom. I have 2 kids and am pregnant with my 3rd. My husband is our only income. His yearly income is about $52,000 a year. We have a $100,000 mortgage on our house that is current. We also have about $60,000 in credit card debt that we have in a debt consolidation plan but it has been to much for us to pay each month. My husband also has a $12,000 student loan, and we have 2 cars, one paid off ( 1993 ford truck) and one we own $2,500 on. We have more going out each month than is coming in. At the end of each month we are -$200 in the hole. I also have about $2000 in credit card debt of my own long since charged off. My husbands friends have told him he makes to much money to qualify for chapter 7. Is this true? He also has a 401k that has $15,000 in it but a loan against it for $14,000. Can they take the money that is in there with a chapter 7. He also sometimes depending on how his companies does, recieves bonuses, though they are not guarenteed. Will they take those after we file? Will they take our home? We have about $10,000 in equity. Any help would be appreciated. Thanks so much.

Jena

[HHM]

Your have serveral issues that would take too much time to address here, but in breif, I think your husbands friends are almost right, you are probably borderline on whether you could file a chapte 7. To answer your own question, if you stopped paying your credit cards today, would you have money left over at the end of the month, if the answer is yes, and the amount is more than $150 per month, then you would probably have to file a chapter 13, however, with 60,000 in CC debt, that is not a bad option at all and you should seriously consider it.

It sounds like your debt is eating you alive and you have to do something, you would certainly benefit from either a chapter 7 or chapter 13.

401K loans are tricky, because technically they are not loans and you can't list yourself as a creditor. Also, it sounds like most of your assets would probably be exempt.

[HRx]

Hi, based on the information you provided, you all would meet the criteria for filing a chp 7. You'd more than likely be have to sell your home under the chp 7, but consult with a few experienced bk attorneys in your state first. The 401k would typically wind up being reaffirmed.

Good Luck!

[jenjen123]

Hi,
Do most people have to sell their home when filing for a chapter 7? I was under the assumption that it was an exemption and would be safe. Would I be better off filing chapter 13. I have little or no income even after I attempt to pay the credit cards.

Jena