To file or not to file?

[daddywarbucks]

I am considering filing chapter 7. My income is over the average income allowed but I believe I will pass the means test because payments on my secured debt outweigh my income.

However, I have a few questions. These are the rough numbers.

$636k mortgage
$230k boat loan
$6k car loan
$50k unsecured debt

Ultimately, I want to keep the house and the car but not the boat and get rid of the unsecured debt. My main problem is the boat payment and unsecured debt. I can afford the house and car payment. However, I don't want to go to chapter 13 because, well, it would be a long five years I think.

1. Because the real estate market is bad I believe my house has negative equity. But if the trustee decides to liquidatel it how do I get another place to live after filing? Should I try to rent a house and then file?

2. If I wanted to not keep the house how do people find a new place to live immediately after filing and chapter 7?

3. I wanted to know if its a real option to not file and try to "return the boat asset" to the bank through a negotiation with them. My sense is they won't do it and will just foreclose on it and sue me if I ask them about it and tell them I can't pay. But I could be wrong. Is it normal for banks to take back assets and show the secured debt as charged off but settled? I tried to sell it for two years (even below loan amount) without success. If negotiating with the bank is the right thing to do should I do it or have a lawyer do it?

Appreciate any thoughts....

[jal1129]

I think we would need more info in order to offer any advice. What state are you in? How much is your income? What size family? How much equity is in your car? Is that your only car? Do you have any other assets? What kind of personal property do you have?

[keepmine]

If you have negative equity, don't worry about the trustee liquidating the house. The only reason it would be declared property of the estate is, if you had excess equity {above your states exemption} and there would be enough to make it worthwhile to pay some of your unsecured creditors.
Do you know the personal property limits your state allows for exemptions?
Were I you, I'd schedule consultations with a few bk lawyers and get your options explained.

[daddywarbucks]

I am in Maryland. Have a wife and 8 month old daughter with another due in October.

My income is $7k per month but secured debt is $8k per month. Definitely over the median income but I believe I pass the means test.

Hard to believe I am considering this when making as much as I do but I cant afford the boat - its like a second house. Used to make a lot more money and it made a little more sense then. In retrospect a bad move in dot com boom days. I can't sell the boat, and I can't afford to pay on it now or for 15 more years.

[SinkingFast]

If you can hang on until after the baby comes to file, that will help you somewhat.

The Median Income for a family of 3 is $78,211/year. Where the Median for a family of 4 is $92,502/year. If $7K/mo is your net, then waiting will put you closer to the Median.

You'll need to ask an attny for sure, but chances are, you'd be responsible for any deficiency balance due on the boat. If you voluntarily surrender the boat or the Lender repo's it,............. When they sell the boat, if it does not bring at least as much as you owe plus their costs, you'll be responsible to pay the remainder due.

As others have suggested, you might wanna consider scheduling 3-4 Consults with attnys that specialize in BK. Generally, Consults are free and you can learn a lot about your options.

Also, research and learn. Even tho you may choose an attny to represent you, this is your life that's getting messed with. Be sure you know what's happening and why.