Please Help!

[concerned]

We were trying to do a ch. 7, but our attorney told us that we may be forced into a ch. 13, due to our income (combined $87,000 before taxes). I am concerned that we didn't get good advice. We want to get rid of our house, which is the majority of our debt. He basically told us to find another place to live. I have found an apartment, but I am leary to sign a lease without knowing for certain what will happen with our file. If we get cold feet and back out of filing, we will also have a lease. Here are the particulars:

$224,000 (first & second mortgage on our home--plan to forfeit in bk)
$17,000 line of credit (land payment, but unsecured)
$3,500 credit card debt (plan to pay $1,000 prior to filing)


We really only want out of house related expenses, but if we can't just get out of these expenses, is it really in our best interest to file at all?

I keep trying to reach the attorney, but they just keep telling me they are swamped. I need to know what I should do! If this doesn't get done by Oct. 17, will this extend our repayment expectation?

Please HELP!!!

To make matters more complicated my husband and I have separated due to the stress of all this. We are on speaking terms and will do what we have to financially, but I am worried we will be forced to live together to pay off what they will want us to pay.

[concerned]

Should ADD

We have two modest cars that we own outright.

[Lightning]

Why are you filing bankruptcy over $20,500 in unsecured debt if you earn $87,000 a year? You should be able to pay that back without a Chapter 13 plan. If you don't want the house, sell it. What is it worth? With your income and relatively low amount of debt, you may even be able to pay the difference between the loans and the selling price if you can't sell it for what you owe.

[concerned]

We can't sell the house!

We have been trying to sell the house, but haven't had anyone interested. We live in an area where houses don't sell very easily, especially ones that are > $100k. We initially went to the attorney to see about a deed in lieu or a short sale. We never had any intention to do a ch. 13 or 7, but the attorney we met with said that most likely the banks will not agree to either short sale or deed in lieu and by the time we heard back from the banks, the new bankruptcy laws would be in effect and then we would really be in trouble. He suggested that we just file bankruptcy now to avoid that. I am concerned that our discretionary income will be too high once we move into a cheaper place, that we will simply be spending the money we were putting to an overpriced house to rent. What should we do?

[StaciMM]

This is probably a topic best discussed with 1-2 more attorneys. If you separate, though, and take on 2 separate rents, etc. that will play into your budgets but I don't know how normal that is.

Regardless-if you think you are going to file, paying $1k to a credit card before hand is a no-no. The trustee will take that back to distribute among the creditors (and take a cut).

[Pinktiger]

See, this is exactly what I mean, Lightening. listen to urself:

Why are you filing bankruptcy over $20,500 in unsecured debt if you earn $87,000 a year? You should be able to pay that back without a Chapter 13 plan. If you don't want the house, sell it. What is it worth? With your income and relatively low amount of debt, you may even be able to pay the difference between the loans and the selling price if you can't sell it for what you owe.

If your intent is to help people, it isn't working. You just come off as a jerk.

[concerned]

Thanks for the information. I guess we don't understand why we weren't given more direction as to what to do from our attorney. He acted like it was just simply & easy and he would take away the house and we could easily move on with our life. I am finding that this would exactly be the case. We wanted to pay $500 to a cc that we use as an overdraft. I am concerned that they will close that and we won't have overdraft protection. We are just completely lost. It all started with building a house. The cost just came to way more than we expected, and before you know it, we're trapped! We have a son, day care, student loans, etc. I know $87,000 sounds like a lot, but most of it is eaten up with debts (both the house & other). On the other hand, I don't want to file if we are not going to be any better off and without a home!

It is true that with the new rules, we may have to pay for 5 years instead of 3?

[StaciMM]

Yes-the new rules will automatically mean 5 years for a chapter 13; the current rules are 3-5 depending on the case.