100% Commission, Higher Than Avg Income - Lost & Confused

[nordique3]

I had my 1st consult with an atty last week. Currently exploring every possible option before making any decision. Have had no late payments on anything but work a fully commission job that has netted me less than 7k of after tax take home money in the past 7 months. Single income family with 3 young children (6, 4, 2). Previous years incomes have gone from 350k to 200k to 125k to 85k. We clearly have wasted money but aren't "spenders" (paid for cars in cash etc). Our demise has stemmed primarily from a significantly reduced income and an investment property that went horribly wrong and I sold out to my partner for about 40% on the dollar. To boot, the money used to invest was from unsecured lines of credit. Currently about 120k deep in unsecured lines, 30k in heloc and 4k in credit card debt. The credit lines are tapped and I don't want to put anything more on the heloc (home value appx 300k, primary mtg @ 235k and heloc @ 30k).

I really fear the budget plan. What if I go 3 months w/out a paycheck, or at least a substantial one and can't pay the bills (basically what I'm going thru now except I have credit to pay the bills/mtg)? We don't have savings today to pay for bills. If I sell out of another investment property, stocks, kids 529's etc during 13, do all of these proceeds go direct to creditors?

I'm so tired of living like this. I have let my family down, I've let myself down. I am not excited about this but am wondering if this is my only way out - but fear failing at this as well. Any feedback would be seriously appreciated.

[nordique3]

I also forgot to mention but I expect/know that I will be missing 2-6 weeks of work this year as one of my children has a very serious heart defect and will require open heart surgery (not the 1st). We have been blessed with the ability to have the "best of the best" operate on her but it requires leaving our current metropolitan area for another 1/2 way across the country. I really am not willing to sacrifice the talent working on my child, she could have her surgery in our city, but giving her the best chance of life is of far greater importance to me. Since I'm full commission, there's no paid time off for things like this. Any idea how this may affect a payment plan?

[BCA2009]

If you can have six months of low salary, you sound like a potential Chap 7 case.

[nordique3]

Atty said I wouldn't meet the means test.

[Bkman2]

I'm commission only and my wife is w-2. I filed and she didn't. They looked at both our income over the last 6 months and took an average of that to be our monthly income. If your total household income average is less then the state limit you can normally do a chapter 7, if not then a chapter 13.

I felt the same as you do. You must look at it this way, family is family and money/debt is business. Business can be good and business can be bad. BK is a way to fix it when its bad.

Being 100% commission or w-2ed is all the same. You do your job the best you can. If the work falls off but you still did your best then its not you its the economy that changed.

Good luck to you and your family.

[BCA2009]

Atty said I wouldn't meet the means test.

If you have six months in a row of low income (below median), you can file. The means test looks at the average of you income for the six months prior to filing. This would also apply to income you have earned, but not collected. If you make a big sale and "earn" a bonus, it will count as income regardless of wheter or not you have received it.