Am I on the right track?

[haunani]

1st time poster here....

Background info: Unemployed as of Sept '05. I was the primary earner of the household (myself and my husband). We've been living off of my retirement money so far, combined with my unemployment benefits and his income. The money will be gone, though, around late March/early April. It was recommended to me by a family member that I look into filing for bankruptcy.

Our expenses at this time FAR outweigh our income (it was not that way when I was still employed).

My main concerns would be about whether or not we would lose the house, 1 or both of the cars, and some of our pets. We have two registered dobermans and a registered Arabian horse. In Georgia, I think the pets aren't allowed to be valued at over $300. Then there's the tack and such for the horse, too. This weekend actually, the horse is going to FL to stay with a friend of mine until we can get back on our feet.

I'm trying to decide if filing Ch. 7 is the right move for us or not. I'm leaning towards yes, but then I worry about what we'll lose in the process.

Any advice?

[bkfiler]

welcome!

the best advice to start off with is you need to consult up to 5 attorneys, they are free adn you will learn so much in those consultations that most everything will be answered. even if you plan on filing yourself.

the rules became stricter after the change in laws oct 17, 2005. so find the means test link - search the site, and put the numbers in and start from there.

we cant know anythign about your case untill you give us numbers. attorneys will be able to figure that out quick.

[haunani]

The one I found and calculated gave my CMI as $2534.11 which is $1280 under the median. That's the 6 month average, for which 3 of them I still had my job which pushes the number up.

It didn't even give me the option of adding in all of our expenses, which are about $2250 per month. Our true CMI (truly current) is more like $1800.

[StaciMM]

Regarding your home & cars-depends on how much you owe on them compared to what they are worth. If you have more equity than you are allowed to exempt, it could be an issue. One thing to consider, though, is whether you can afford to keep both cars (if both have payments).

Regarding the pets, you probably will not be able to exempt all of them. The idea of losing things is hard-but it is a tradeoff for having the debt gone.

[haunani]

I think the total of the equity in the house and cars is about -$6000. We owe more than the one is worth and the other we have about $200 or so equity... same for the house, about $200. (We just bought it in June and did so with $0 down payment with a VA mortgage)

[StaciMM]

WIth little equity, you should not have an issue.

The bigger question to think about-and this you don't have to decide TODAY-is can you afford the house & car payments? If not, and you decide to file, this is the time to do something about it. We started out planning to keep both vehicles, but came to our senses and realized both were way upside down, one had reliability issues and the other was BAD on gas mileage. In the end, we decided to become a one vehicle household, surrendered both of the original vehicles, and got a used car (reliable, but lesser payment).

[JimH]

It sounds like your home and cars are safe and that a ch 7 would be your best bet. The dogs are probably safe since older dogs, even registered ones, aren't worth alot. If they're fixed, then they have close to no value. Plus, I like to believe a trustee would have at least a little compassion towards people in the family who happen to be non-human.

The horse is another matter - not sure if that's a pet or livestock. Not sure of the exemptions in GA, but you may have a wildcard that could cover that. Just a guess. If not, then the horse is probably as good as gone in a ch 7. - ch 13 would be a different story though. The payments in the ch 13 have to at least total what the creditors would of recieved had you filed ch 7. If it's an expensive horse (and tack), then you may have a problem.

[StaciMM]

I forgot about the WC-thanks Jim!

In GA, you can use the homestead exemption as a wild card if you don't need it on the home. If you have no or little equity, you should be able to do that to cover the horse & dogs (depending on value). The exemption is $10,000 per person.

Vehicle exemption is $3500 each, and personal property up to $5000 each.

[haunani]

The dogs are 6 months and 3 years, with the 3yo not fixed. We just recently took her in (a rescue) and were waiting until one of us found work to get her spayed. She's not good for breeding, though, due to some genetic defects, so I'm not sure how that would play into it.

The horse, I bought for $2k but he's not worth that much. His tack total up to about $500 or so. Since we have nearly no equity in the house and the one non-upside-down car (it's a great little car in many ways, we'd happily give the other one up), we should be able to use that wildcard to cover him.

I'm planning on setting up some meetings with attorneys next week.

[StaciMM]

Sounds like that will work... Be sure to discuss the exemptions with the attorneys you meet with. Most likely a pet w/ no breeding options doesn't have much of a market value, but w/ the wild card it shouldn't be an issue anyhow. Personally, I enjoyed knowing that we didn't use all of the WC, so could have amended if the trustee had an issue with any of our values.

I can't tell you how nice it is to only have 1 car payment. We'll never have 2 at a time again! (We'll either save to buy something without a monthly payment, or will wait to finance another vehicle after this one is paid off-used of course.)

[haunani]

Aside from the mortgage (which is at the level with apt. rent around here, so if we gave up the house, we wouldn't be saving any money), that 1 car payment is our highest payment at about $420/month! My car is only $142.

[StaciMM]

Our car payments were $505 and $369. Insurance was $220. Now, 1 payment of $295 and insurance of $130. (Our insurance is high due to an auto accident I had. Next week is the 3 year mark-WooHoo! The next renewal should be nicer.) Dh was working a part time job, and we never realized that everything from the extra job was going into transportation, and the 2nd job was the only reason we 'needed' 2 vehicles. So, our bottom line didn't change-but by cutting our vehicle expenses, Dh gets more sleep and more family time and that is worth plenty. He works nights, I work days. We've shared the 1 vehicle for nearly 3 months now without issue. If he did need to do something during the day, he could take me to work & pick me up (I work 12 miles away from home).

When you total your expenses and income, where do you come out? If you haven't started writing everything out, it would be a good idea to do so before meeting with the attorneys. If you search, there are probably some posts here where people have listed their budgets, for feedback to make sure they were not forgetting anything.

[haunani]

Right now our insurance is about $131/mo for both cars. For just my car it would be $95... not bad! And that's with 2 tickets, 1 collision, and 1 comp. claim for my husband (I'm clear now).

Another question... how are checking/savings account balances handled? We have about $1200 in savings right now, but that's money that we've been deducting from to live off of. If there's some way, I'd like to hold onto it for that "emergency" fund... like a broken down car, medical emergency (no health insurance), etc.

[StaciMM]

With the wild card, you should be ok. If you didn't have a wild card, then you would want to file after you'd paid all the bills you possibly could and to have less $$ at the time of filing.

Something you probably haven't thought of yet-but if it applies to your situation, you can also list a potential tax refund as an asset and claim part of the WC for it.

My accident was 1/19/03. Total loss of the vehicle but I lived...

[haunani]

I'm sorry you had to lose the car, but it's good that you survived.

I honestly have no clue if we're getting a refund or not this year. We're still waiting on some statements to come in (husbands W-2 and s-loan interest statement, unemployment tax info and TSP withdrawl info (gov't form of 401k)).