Concerned I May Not Qualify

[NewChanges4]

Hi, all! I hope I am posting this in the right place.

I am a (very) newlywed...just 8 days in. I've been considering filing for BK for months now and finally worked up the nerve to discuss it with my husband earlier this week. He doesn't have good credit (at all) but still does not plan to file. Nor is he considering it.

My brother recently spoke to an attorney who advised him that he does not qualify for BK due to not having a lot of unsecured debt. He has two tax garnishments (federal and state), lots of student loans that are past due, a car, and charged off debt.

My concern is that I may not qualify for BK either. This was never even a consideration before speaking to my brother. I make a fairly decent living but still live paycheck to paycheck each month. Our rent is reasonable but in addition to rent, we pay $1200/mo for daycare and (my personal) car note is $567/mo with about $10k left to pay it off. It's roughly worth about the same. My student loan payment which is GREATLY past due has a remaining balance of roughly $107k. I owe approximately $7,000 in federal taxes for 2009-10 and those payments are due to commence next week. I have one credit card with an extremely small balance of $130 but is closed. Then I have about $10-15k in charged off credit card debt that I am still receiving calls and letters about. Last year I was admitted to the hospital so I have another $2,000 in debt from that which is also in collections.

Will I even qualify for BK? Can I include any of this debt in a repayment plan? I have an appointment with an attorney this afternoon so I will know more then, hopefully

My credit is in the toilet (FICO is probably below 500 at this point) but I don't know how to start improving that score so that we can purchase a home in the next 2-3 years.

Thanks in advance

ETA: I do have one open AMEX card. It's my corporate card that is necessary for work. I ONLY use it for work related expenses and expense everything on it.

[minan]

Hi, all! I hope I am posting this in the right place.

I am a (very) newlywed...just 8 days in. I've been considering filing for BK for months now and finally worked up the nerve to discuss it with my husband earlier this week. He doesn't have good credit (at all) but still does not plan to file. Nor is he considering it.

My brother recently spoke to an attorney who advised him that he does not qualify for BK due to not having a lot of unsecured debt. He has two tax garnishments (federal and state), lots of student loans that are past due, a car, and charged off debt.

I'm not sure where your brother's attorney got his information, however for a chapter 13 bankruptcy, you cannot have more than $336,900 in unsecured debts or $1,010,650 in secured debts.

You can file to deal with tax issues etc...However taxes can only be discharged under some strict criteria. Student loans will not be discharged in a bankruptcy regardless of whether it is a 7 or 13.

My concern is that I may not qualify for BK either. This was never even a consideration before speaking to my brother. I make a fairly decent living but still live paycheck to paycheck each month. Our rent is reasonable but in addition to rent, we pay $1200/mo for daycare and (my personal) car note is $567/mo with about $10k left to pay it off. It's roughly worth about the same. My student loan payment which is GREATLY past due has a remaining balance of roughly $107k. I owe approximately $7,000 in federal taxes for 2009-10 and those payments are due to commence next week. I have one credit card with an extremely small balance of $130 but is closed. Then I have about $10-15k in charged off credit card debt that I am still receiving calls and letters about. Last year I was admitted to the hospital so I have another $2,000 in debt from that which is also in collections.

Will I even qualify for BK? Can I include any of this debt in a repayment plan? I have an appointment with an attorney this afternoon so I will know more then, hopefully

My credit is in the toilet (FICO is probably below 500 at this point) but I don't know how to start improving that score so that we can purchase a home in the next 2-3 years.

Thanks in advance

ETA: I do have one open AMEX card. It's my corporate card that is necessary for work. I ONLY use it for work related expenses and expense everything on it.

Student loans cannot be discharged in a bankruptcy, however we had our student loans in the bk so something does get paid, however at the end of bankruptcy we will need to make arrangements with the loan company to continue payments.

We filed chapter 13 to deal with taxes and all our debt is included since you are required to list all your debt on the paperwork.

You and your brother both should take the time to schedule appointments with multiple attorneys (many do free consults) and go from there.

[NewChanges4]

minan -

Thank you for the reply! I actually just returned home from meeting with an attorney to discuss a 13. He advised me to file a 7 since he believes I will qualify for that. I am going to speak with my husband tonight and make a firm decision. I am ready to sleep again at night.

[minan]

minan -

Thank you for the reply! I actually just returned home from meeting with an attorney to discuss a 13. He advised me to file a 7 since he believes I will qualify for that. I am going to speak with my husband tonight and make a firm decision. I am ready to sleep again at night.

Just so you are aware, your 2009-2010 taxes are not going to be discharged in the bankruptcy regardless of whether it is 7 or 13. They are too recent and there are strict guidelines for when they can be discharged. I hope your attorney told you that. Don't want you to be thinking otherwise.

[minan]

I say this from experience as we filed for taxes also. Believe me we did a lot of research when we started to look at bk as an option.

[NewChanges4]

Thanks for the heads up. I believe I read this elsewhere online so I went into the meeting with the motion that I would just keep the arrangement I already made with the IRS.

[momofthree]

Just so you know, filing ch.7 will get rid of the chargeoffs and medical bills. Since you haven't been paying them anyway, it won't save you any money on a monthly basis.