Thinking about filing 7 and need some advice!

[Voltron1978]

I have about 20k in cc debt. All in my name - none is shared by my wife. The house and car are also in my name alone. House is worth 34k and I still owe about 30k. Car is paid for, but it is 8 years old and worth about only 4k. I have $1400 owed on a store credit furniture account ( Furniture Row ) and $2300 worth of carpet on another store credit account ( Carpetland / financed by GE money).

1. Will I lose the furniture and the carpeting even though I am current on payments?
2. By filing this time of year will I have to forfeit my tax refund next year rather than use it to pay bills?

I live in Michigan. Can I just reaffirm the furniture and carpet to keep them? Let me know if any more info will help. I just have a ton of questions. I have friend who is a bk lawyer and he said I definitely qualify for 7. I just want some general thoughts / answers / advice from you guys; especially anyone who has filed in Michigan.

Thanks!

[CindyLou]

The carpet is probably unsecured through GE Money...unless you put up collateral (which would not be the carpet itself!....They are not going to come take your carpet.. Now you need to find out if the furniture is financed through a revolving account or is it financed with a lien attached. Do you have your paperwork on each??? They will almost always allow you to reaffirm, but it the furniture is not secured either by itself or other collateral then they cannot take it and you would include it in your BK and be done with it. Let us know what you find out in your paperwork

[Voltron1978]

Thanks Cindy!

I just got back home and am going to look through my paperwork. I do not believe that there is a lein against the furniture or the carpet, but the stress that goes along with the process really hampers ones' ability to think clearly. I will post some more info up later. Thanks!

[HHM]

What is your job situation like?

Also, what do you hope to accomplish with the Bankruptcy.

From what you said, about the only thing the BK will help you with is the $20K in credit debt. For the most part $20K is right on the border of what is manageable and what is not.

As for a tax refund...yes, you will have to surrender 2006 tax refund. Note, to clarify terminology, when you "file" your tax return in 2007, it is for the "tax year" of 2006...so you will have to surrender most of your 2006 "tax year" refund.

Generally, simply having $20K in debt is not enough to drive someone to BK, what else has happened, or what else do you anticipate happening.

[CindyLou]

You know, you can change your withholding if they are taking too much out and will result in a large refund that they will take.

[Voltron1978]

What do I plan to accomplish?

I need to eliminate the debt that is now beyond my control. I work and my wife stays home with our daughter. Any money she made almost paid for the daycare.

I was between jobs when our daughter was born last year and had to charge a lot of household expenses. I have a good job now, but a third of my monthly income has disappeared due to Michigan's economy. After paying the mortgage, student loans, insurance, utilities and other necessary things, we have nothing left.

20k is just in credit card debt. $3700 for the furniture and carpet plus 60k in student loans. I know that the student loans cannot be discharged and I did consolidate to lower those payments.

Cindy: Both the carpet and furniture are in a revolving credit account. So they should be fine. Thanks.

I just need some people to share ideas with and I appreciate it. Finding this forum has been quite a blessing. Thanks!

Anything else I should be thinking of?

[emoney]

From what you have shared BK is really much help in your case. CC are about the only thing BK will fix.
Here is what I would do:
1. Stop loaning the government money by overpaying your tax bill. Pay only what is required.
2. Get on a written budget to includes making some small payments to the cc or maybe even CCS.
3. Get a second job as $500 a month will covers your past financial sins.
No real need of BK as it will fix very little, because cc will probalby not sue.
Best wishes,
emoney

[Voltron1978]

Thanks emoney. I appreciate all the suggestions. I need to sit down and look over everything and get my things in order before I can do anything. It is just so stressful and sometimes you feel like there is absolutely nothing that you can do.

[CindyLou]

I do not think emoney should rule out BK at this time. $23.700 is a lot of money! Especially with interest, etc. I fully expect the same thing will happen to emoney. He will end up missing a payment or two somewhere along the way and his interest rates will skyrocket. Right now his wife is at home with the baby and if he works a second job he will never see either. I say get it done now, get a fresh start now and NEVER ever get in this situation again. Take advantage of a couple of free attorney consultations and see where you stand. What would be worse is to be another year into this and have only paid the miminums and have accomplished nothing. I guess my advice is just be realistic about what you can and can't do. I tried for 3 years to get ahead of my debt and no matter what I did I just couldn't. If I worked 3 extra shifts one month to send to cc then I would need a new clutch on the car or always something. But emoney, you have to make the decision. I just know that my chp7 "set me free." I will not allow myself back in that situation. But it was such a heavy load to bare with no end in sight. Now I'm a year out from it and wouldn't do it different if I could, except that I would have done it as soon as began to feel overwhelmed. Good luck and keep us posted. Remember we all have different opinions because of different experiences. No one is wrong. Just different.
Cindy

[CindyLou]

oh, and as far as the student loans; put them in forebearance for a few months until you get everything straight. All you have to do is call and tell them you are having financial difficulties. But if you decide to do your BK then you will need to put them back into repayment so that you can included them in your expenses. Get them back into repayment asap as interest will still accrue. I have the same amount of student loans!!

[CindyLou]

correction; i kept addressing emoney in my posts....i was talking to volt. sorry for the mistake.