Please help me make a decision.

[km2654]

The attorney that I am going to hire wants me to right away because I'm getting a $40 a week raise, a $1500 bonus and there are 3 paydays this month. The raise will be retroactive to April. Right now I'm a couple thousand over the median income.

In order to pay her I will have to take a 401k loan. She said that would be ok. I'm not sure I want to do that. I am not late on anything yet. I've been thinking that maybe I should stop paying everything and save up for the attorney. That would also put me a few more months away from a cash advance I did on one of my credit cards.

I think I'm just so stressed that I just can't make a decision. So any advise would be greatly appreciated.

[AngelinaCat]

The attorney that I am going to hire wants me to right away because I'm getting a $40 a week raise, a $1500 bonus and there are 3 paydays this month. The raise will be retroactive to April. Right now I'm a couple thousand over the median income.

In order to pay her I will have to take a 401k loan. She said that would be ok. I'm not sure I want to do that. I am not late on anything yet. I've been thinking that maybe I should stop paying everything and save up for the attorney. That would also put me a few more months away from a cash advance I did on one of my credit cards.

I think I'm just so stressed that I just can't make a decision. So any advise would be greatly appreciated.

Hi KM: Welcome to the Forum. In my very humble opinion you are being rushed.

Please take a few minutes to re-read the above sentence and digest it. Then re-read it again.

You are being rushed. Your situation will not change very much in the next two days or probably the next two weeks.

PLEASE keep in mind that as the economy is not good for us poor folks out here, NEITHER IS IT FOR THE ATTORNEYS! More and more we see them coming onto this forum trolling for business. Although, we have some very good helpful members who happen to be attorneys.

But any decent attorney is NOT going to suggest that you borrow against your 401K or touch it in any other way--especially to pay their fee! Any attorney who does so, is NOT looking out for your best interest and is seeking to line his/her own pocket.

Now that you have discovered us, please take a couple of days to read through the Ch7 and Pro Se Boards, along with a few others here and actually see what options are available for you. There are more than you may think.

Above all, please calm down. I guarantee you that all of the members here, myself included, have been where you are situated right now, and we truly feel your pain.

You are now among friends--you just don't realize it yet!

[AngelinaCat]

Hi KM: On re-reading your post, I am more than certain that I am right. You are being rushed. And your own instincts that tell you that you should wait to let a cash advance drop off the radar are exactly correct.

Since you are that far ahead in your thinking, why not take some time to study the different boards here?

You might want to purchase the Nolopress.com down-loadable book on doing a CH7 bankruptcy yourself. It is a good straightforward guide of the process, and is written in plain English. It costs about $17.00., but other members have been able to get coupons.

Even if you do decide to hire an attorney, one poster commented (regarding the book): "It helps keep the attorneys honest!"

Good luck!

[km2654]

Thanks you for your reply. The attorney didn't suggest I take a 401k loan, I asked but then had second thoughts.

The lawyer seems pretty smart (the best of 4), but like you said I did feel rushed. I really just started considering bankruptcy a few weeks ago. I'm still trying to come up with another solution. If it was just my $30000 in credit card debt I think I could really try to budget and slowly pay it off, but I also have a heloc left over from my foreclosure that I have received a couple collection notices on so I would end up filing even if I did a debt settlement. I was hoping they would send me a 1099-c but I guess that won't happen now.

Even though I know its inevitable I can't even bring myself to stop paying my credit cards. I know after lurking here for a while that I should just stop, but I just made another payment yesterday!!

[lrprn]

km2654, if you wait to file after receiving the raise, the bonus, and with a three-paycheck month, it will increase your disposable income calculations on the Means Test and Schedules quite a bit. This will increase your calculated monthly Ch 13 payment for five years - best to avoid this if possible.

This is why the lawyer is trying to rush the filing. She's trying to get you the lowest Ch 13 payment possible. You don't want to file a Ch 13 that forces you to pay more than your normal disposable income is going to be.

Now whether you should take out money from your 401K to pay the lawyer....that's another thing altogether. I would avoid doing this if at all possible. If you've already stopped paying your unsecured creditors, has this freed up enough to pay your lawyer?

Your only other option is to wait six months to let the bonus drop off and select a time to file when a three-paycheck month is not included. Can you wait to file until this happens?

[km2654]

Irprn, I haven't stopped paying anyone yet. I get knots in my stomach just thinking about it. I took $6500 out on 6/6 on a cc to try and consolidate my bills to make it easier to pay them (I had no thoughts of bankruptcy back then). I know I should wait as long as I can to file because of it. The attorney said it would be ok to file now because I would be filing a 13??? Is this true? I should have asked her why but I didn't.

To be honest it was such a relief to have someone take over and tell me what she thought I should do that I didn't ask enough questions.

I feel like I would just like to file to just get it over with! Of course with a 13 it wouldn't really be over would it? So I need to figure out what the best financial decision is not what will make me feel better.

If I did take a 401k loan the payments are allowed under a Ch13 aren't they? I thought I could take the loan for $2000 and pay it back in 12 months. What do you think?