Overwhelmed with DEBT.

[jlasky]

Hi everyone I am new to this forum, I am glad I found it by using google. Anyways I am a family of four (wife, son and a newborn) that live in MO. We have around 1480.00 for our first and second mortgages per month (barely any equity). Two cars totaling 840.00 per month, paid off both cars in 5 years, 2012 (no equity). We have 200.00 of student loans a month. We pay $600.00 for halftime daycare per month. We have around 70,000 of unsecured debt. I come home with 3200 to 3400 a month, spouse 1600 a month. We juggle our credit cards till their high limits and now we are at our last resort of filing bankruptcy. We can't even by food with our money, we have to charge it on our Amex. I am a positive person, but I really need to do something fast. All secured debts were paid on time. All unsecured debts were paid on time by juggling the credit cards, but now we are gonna have issues. I need to find a lawyer next week about my debt issues. Any MO lawyer recommendations? I am thinking chapter 7 would be our best option. I rather not do a chapter 13, I don't think we would be able to make the payments since we have personal expenses (clothes, food, phone bils, etc). I am curious if chapter 7 would work for us? Also included in my unsecured debt is a 10,000 loan from a business that I work for, would that cause any issues of losing my job if I go with bankruptcy? Should I stop paying the unsecured bills right now or wait until I see an lawyer? Love to hear the feedback!

[jal1129]

Welcome to our forum! The biggest factor in decided if you can file a 7 or 13 is going to be your income and assets. It sounds as if you don't have any equity in assets so that should'nt be a problem but the median income for a family of 4 in MO is 65,909, gross. You have listed your net income so I am guessing you are going to be over on income. That does'nt mean you can't file a 7 it just means you are going to need to talk to a lawyer or 3-4 about your situation and they can help you determine which way you should go.

If you are absolutely committed to filing bk then by all means stop paying on your cards. But if you are not yet sure then I would wait until you consult with an attorney about your options.

[jlasky]

Thanks Ja|1129. Do I have to change my checking account info if I stop paying the bills. Will I get alot of calls from the collectors during the filing and discharge? I am about 25,000 above median in MO, but personally with all of the secured debt it would be difficult to go with an Chapter 13. Anyone else in a similar situation that filed for a Chapter 7 successfully?

[jal1129]

If you owe money to the bank you have a checking account at then definetly open up a new account at a bank you don't owe money to before you quit paying.

$25,000 over median is alot over. Unfortunately we don't get to choose which chapter we want to file, there are laws set up to tell us which way we have to file. Some things people have considered on a temporary basis to lower income are: could your wife stop working for maybe 6 months to lower your income, stop working any overtime, quit second job. Things like that and then wait it out for 6 months to lower your income.

[familyof7]

If you are going to file stop paying the cc debt open a new checking account close the current one the 10,000.00 loan from the business you work for what are the circumstances involved w/ that no they can not Fire you because you file bk but they could make a differnt excuse as to why they will fire you but you could also still pay the debt back as a show of good faith After the bk if you pay during it might be considered prefrential treatment if it is a secured loan you will havew no problems you could reaffirm or just continue to pay even during the bk and no you should not receive any collection calls after you file if you do tell them you filed and that should end that if they do still call they can troubal so call a lawyer and weigh your options

[jlasky]

If my wife quits her job it would be very difficult to wait it out for 6 months. All of the collection agencies will call me and harass me for 6 months. I am not sure if thats a good option. I just ran a means test online, so far it said I have an 80% chance to file chapter 7. I know its just an electronic form, but I guess it could be possible. I guess I will see once I talk with a lawyer. About the business I work for... I dont work for them, but it is an Line of Business in the corporation. I checked my credit report and it is unsecured loan.

[loonzilla]

You may be over the medium, but compute the means test to see where you stand. I am also over the medium, but my secured debts along with my monthly medical expenses made me eligible for chapter 7. Of course, my lawyer says I should have no problems, but won't know officially till 314 meeting. So search some sites for means test to obtain a link or search for Best Case Bankruptcy software and download the trial version. You should get a better understanding of your situation after that is completed. Good luck!!!

[lrprn]

Are you living on the west, central, or east side of Missouri? If you are living near the KC area, then several of us are from that area and can share some lawyer recommendations with you privately.

If my wife quits her job it would be very difficult to wait it out for 6 months. All of the collection agencies will call me and harass me for 6 months. I am not sure if thats a good option.

Trust me - if you will have to file Ch 13 now with your current income, it's a great option to wait out the six months with call waiting and your answering machine picking up all your calls so that you can file Ch 7 instead. Ch 13 at your income level is going to be 60 months of the trustee controlling all your finances and taking ALL of your disposable income for five long years while you pray that you and spouse dont lose your jobs or have a significant income drop, that your cars hold up, and your family avoids any expensive medical emergencies. Spend some time in our Ch 13 forum if you want to know what that's like from those of us who are living that now. If you can avoid Ch 13, it's well worth ignoring your phone ringing or just hanging up when collectors call for six months, believe me!

Most bankruptcy lawyers provide free consultations. Make appointments with 3-4 in your area and share all the information you've shared with us. You'll learn a great deal about what's going to be possible in your case plus you get to check out lawyers to see who you think is going to represent you well.

Any time there is business debt mixed with personal debt in a bankruptcy along with higher income like yours, that case is going to be looked at very closely by the assigned trustee. You need an experienced bankruptcy lawyer to help you file in your situation.

Hang in there - we've all been where you are right now. Keep reading the posts and stickies here and researching bankruptcy online so you understand the differences between Ch 7 and 13 and how the Means Test works. If you would like some helpful websites about any topic, just let us know. Welcome and glad you found us!

[jlasky]

Thanks for the information. I live on the east side, stl. Any good lawyers you know that are located in STL? I did a quick means test and it appeared I qualify for a chapter 7, but its only a test on the internet. I am not going to file for CH13, it seems like there more cons than pros.

[lrprn]

I am not going to file for CH13, it seems like there more cons than pros.

Depends on why you are filing, which assets you want to save, and how much income you have. If the only option you have is Ch 13 vs never digging out of the debt hole, Ch 13 looks pretty good!

However, if your gross annual income is below Missouri's median for your family size, chances are you couldn't file Ch 13 even if you wanted to.

[leftyf]

Lawyer Recommendation

I would also like any recommendations for Ohio lawyers...I'm in the Southern Bankruptcy Court (The Cincy & Columbus court, I think.)
Thanks, Lefty

[jlasky]

I don't owe any debt's with my current bank that host my checking account. Should I still change my checking account to a different bank, since the creditors know my bank account and routing number, since I manually pay them online?

[lrprn]

I don't owe any debt's with my current bank that host my checking account. Should I still change my checking account to a different bank, since the creditors know my bank account and routing number, since I manually pay them online?

Since you don't owe any debts to your current bank, then there's no cross-collaterization that can occur.

Some of our members have had a problem with creditor auto-withdrawals for payment continuing to come out of their accounts even after permission to do so has been withdrawn. As long as you don't have any creditors that are allowed to do that and you are paying your creditors yourself through online bill payments that you control, you should be fine leaving your account where it is. Creditors can't just take money from your accounts without the court's or your prior documented permission. If they could, all of us would be at $0 in our accounts before we file!