Where to even start ?!

[MyLadybug]

I am in the process of still reading the FAQ's and links but all this new information has my head spinning.

My spouse and I have been struggling to make ends meet for awhile now. Paycheck to paycheck. When comparinf our median income we made under on our tax return for 2005 but only barely.

We have $52,000 in CC debt - HOLY MOLY !!
2 Vehicles
One we owe $2300 on and Blue Book has value at $7000 - although this sounds very high to me !
Second Vehicle we owe $14000 on and it is worth $11, 105 - have no idea how that happened !

Also about $600 in medical bills I have been making monthly payments on.

There are 4 in our household and we rent don't own a house. Only thing we have of value is about $6000 in a 401k.

He is also in the military and didn't want a bankruptcy to look "bad" or jepordize his security clearance.

We seem to be making it work. We weren't getting it anywhere to pay off our debts but they weren't late either. Credit is all but perfect if you don't count that all our CC's are maxed. We were just tired of "spinning our wheels".

Earlier this year I got a better higher paying job which lasted all of 3 months and was just laid off. My old job will have me back but only at 20 hrs/week.

Now we have come to the realization this is where we sink. There is no way we will make it.

I have no idea if we even qualify for Chapter 7 or 13. Do we get started now. Do we wait a few months ? DO I keep paying on all my credit cards until we see a lawyer ? I don't want to let my bills slip if this won't work out. We will just have to figure something out but I don't know what or where to even turn at this point. Not even sure what to look for in a lawyer !!

HELP !!

[FilingOnMyOwn]

If you only owe 2,300 on a car and its worth 7,000, its probably a very reliable car that remains in high demand despite its age/mileage, like honda, toyota etc.

A BK on a military person can cause serious problems in the service, at least thats what I was told by a military roommate. He said you can be kicked out for having severe financial problems, I dont' know if its true or not.

[MyLadybug]

The car is actually a 1998 Chrysler Sebring Coupe

[9877donna]

Make an appointment for a free counselling session with a few lawyers in your area and see what they can do for you.Pick one that you trust and feel comfortable with and let them help you with your current situation before it gets worse.
A lawyer can tell you if you qualify for a Chapter 7 or 13.Get started now and save yourself alot of stress and aggrivation in the future.
Good Luck.Please let us know how it goes.

[FilingOnMyOwn]

The car is actually a 1998 Chrysler Sebring Coupe

Yeah noone in their right mind would pay 7 grand for that car, maybe you accidently looked up the dealer retail value. I see the late 90's versions going for 1,500-2,500 all the time.

[SinkingFast]

The Chrysler is only worth between $2K and $4K, roughly, depending on the model you have, mileage, and options.

http://www.edmunds.com/tmv/used/1998...ing/index.html

With regards to the Military, BK, and Security Clearance, I found this Forum where this situation was recently discussed. You might want to read this thread:

http://forums.military.com/eve/forum.../1980080480001

From what I read, the military isn't anti BK. Just anti BK with regards to Security Clearance.

Is there a lateral move your Hubby could possibly make that would keep him at the same rank and rate without Security Clearance being necessary??!! Possibly something to look into as you ponder your options.

I'd also suggest you call 2-3 BK attnys. Make some appts for Consults. Generally Consults are free and you can learn a lot. You'll get opinions from the attnys specific to your particular situation. Just because you Consult doesn't mean you're gonna file. Just learning and keeping your options open.

Also, contact a DOJ approved Credit Counseling Agency.

http://www.usdoj.gov/ust/

There are nationwide CCA's and local ones listed as well. Click the link for Credit Counseling and Debtor Education. You'll want to click on Credit Counseling after that.

See what they recommend and maybe ask to have a DMP prepared. Debt Management Plan. Works very similar to Ch 13. The CCA takes all your debts, rolls them together, figures up one payment for you to make, and within 5 years you're debt free. No Automatic Stay protection, but the same idea.

A potential problem with the DMP approach is if you have Creditors that will not participate. You'd make your DMP payment and still be responsible for paying other Creditors outside the plan.

Whatever you do, DO NOT cash out any retirement monies you might have at this point. Until you decide for sure, for sure how you plan to proceed. Retirement monies are protected and exempt under the New Law. If you do decide to file, no sense jeopardizing your future trying to put a bandaid on a gusher.