Very Quick Scenario

[arlington]

Husband and I both plan on going for Chapter 7.
Total household income is $96,000/yr
Total ccard debt is appx. $35,000 (appx. $940.00 month)
House mortgage balance is appx. $89,000
Last appraisal when we got home equity loan was $140,000 although the tax assessor's office has a total appraised value at $108,000.
We currently have an home equity loan balance of $17,000

My attorney stated that we stop making payments but we haven't technically hired her yet (she was on vacation because of the 4th of July). My husband says we keep paying until she actually files.

My questions...

1. Do we have the option to keep our house?
2. Did you all take the online course through a debt management program?
3. What does it exactly mean when you file and how long after the paperwork was filed did you completely stop making payments to the creditors. Some of our creditors are already enrolled in a debt management program and have been for at least a year.

[familyof7]

Do not make any more payments on cc or creditors or it could raise a red flag . Dont make any purchases with credit cards 90 days before filing or those purchases could not be dicharged .96,000.00 is high income have you taken the means test? With an income that high you may not even be allowed to file chapter 7 .Yes ,you can keep your house if you have less than the allowed amount of equity if you have more equity than is allowed you will loose it. Yes you must take the course online or over the phone Before you can file or you case will be automaticaly dismissed. You should really look into the means test before you file because I dont believe you are going to be allowed a chapter 7 with that income they will possiably make you do a chapter 13.

[arkienurse]

Husband and I both plan on going for Chapter 7.
Total household income is $96,000/yr
Total ccard debt is appx. $35,000 (appx. $940.00 month)
House mortgage balance is appx. $89,000
Last appraisal when we got home equity loan was $140,000 although the tax assessor's office has a total appraised value at $108,000.
We currently have an home equity loan balance of $17,000

My attorney stated that we stop making payments but we haven't technically hired her yet (she was on vacation because of the 4th of July). My husband says we keep paying until she actually files.

My questions...

1. Do we have the option to keep our house?
2. Did you all take the online course through a debt management program?
3. What does it exactly mean when you file and how long after the paperwork was filed did you completely stop making payments to the creditors. Some of our creditors are already enrolled in a debt management program and have been for at least a year.

Have you taken the means test yet? How many are in your family? I ask because median income for GA for 2 is $50,376, so you are way over the median. Did your lawyer ask about income and expenses? Have you actually had a sitdown with all the facts on the table, or just a quick over the phone few questions?
I know we were told over the phone that we could keep our 2 cars and our house and file a 7. When we actually went in with all our info, the lawyer, after a quick glance, told us our payment would be about $700 a month. When all was said and done, we ended up paying 588 every 2 weeks, and are paying 100%. Our income at the time was MUCH less than yours, and our debt was about the same as yours. And we had 4 kids in the house.

Good luck and keep us posted.
-------------------------------------------------

<just found this from http://research.lawyers.com/Georgia/...n-Georgia.html >

" If there is no equity in your house (today's value less costs of sale less payoff balances on all liens and mortgages), the trustee in a Chapter 7 bankruptcy will abandon the house to you. That is, you keep it, as long as you keep the mortgages current.

A bankruptcy does not wipe out voluntary liens, like mortgages and deeds of trust, or tax liens. So the lender still has the right to foreclose if you do not pay. If you pay, everyone is happy. Remember, the lender does not want the property; it wants you to pay regularly on the loan. Foreclosure is a last resort for the lender if it concludes it can't get the owed money any other way.

If there is less than $5,000 in equity in your house, you can claim a "homestead exemption" and keep the house, as long as you pay the mortgages. If there is more than $5,000 in equity, it is possible you could lose your home. In that case, you may wish to consider a Chapter 13 bankruptcy."

[lrprn]

Husband and I both plan on going for Chapter 7.
Total household income is $96,000/yr
Total ccard debt is appx. $35,000 (appx. $940.00 month)
House mortgage balance is appx. $89,000
Last appraisal when we got home equity loan was $140,000 although the tax assessor's office has a total appraised value at $108,000.
We currently have an home equity loan balance of $17,000

I see from an earlier post of yours that you live in Georgia. The median income for a family of two in Georgia is $50,376. You make almost twice that amount. I can't see given the information you provided here how you can possibly file Ch 7. PLEASE go get several more free consultations from 2-3 other experienced bankruptcy lawyers in your area. Unless there's additional financial information you haven't shared with us, I believe the lawyer you spoke with is wrong that you can file Ch 7.

My attorney stated that we stop making payments but we haven't technically hired her yet (she was on vacation because of the 4th of July). My husband says we keep paying until she actually files.

If you are certain you are going to file, there's no reason to pay any of your unsecured credit cards or loans. You must continue to pay your mortgage and other secured loans like your cars.

1. Do we have the option to keep our house?

If you can file Ch 7 (and as I said above I don't see how you can), you must be up to date on your mortgage payments and have less than $10,000 equity that is all that is allowed in Georgia - http://www.bankruptcyaction.com/gaexemptions.htm . Right now you have under that if you use your tax accessor's value (which is what you want to do).

2. Did you all take the online course through a debt management program?

Yes - we used Hummingbird - $49 at http://www.hummingbirdcreditcounseling.org/ . Others here have used them as well - we liked them and will use them again when we do our pre-closing education.

3. What does it exactly mean when you file and how long after the paperwork was filed did you completely stop making payments to the creditors. Some of our creditors are already enrolled in a debt management program and have been for at least a year.

The minute you file Ch 7 (if you can), you immediately stop paying everyone including your debt management program but keep paying your secured lenders (mortgage, cars, etc). As I said above, if you are certain you are going to file, then there's no reason at all to pay your non-secured creditors anything before you file. We were in a debt management program and pulled out of it five months before we filed Ch 13 to save money to pay our lawyer's retainer and catch up on medical and dental care we had put off for years.

[CindyLou]

My advice in your case, it to do what you husband said. Because if you end up in a 100% payback, which is possible with your income, then you could be adding extra late payments and fees. Retain an attorney ASAP, hopefully before you next cc payments are due. You need more legal advice before you change anything. Unfortunately, I cannot imagine that you would be allowed a 7. Are there just the two of you in your family?

[JRScott]

How many in your family?

If its just the two of you you are going to have a hard time filing a chapter 7 and most likely will be forced into a chapter 13, that is assuming there aren't some extraordinary circumstances you haven't divulged such as massive ongoing medical treatment, etc.

[arlington]

Re:

We actually have a family of 4 - sometimes 5 when my stepson is here. I hadn't decided to file in either direction yet. We left our paperwork with the attorney and then she went on vacation for the 4th. She will return to the office on Monday and hopefully perform our means test which I think I already know which direction its going to go. But if we end up having to file Chapter 13 then what's the difference in doing that v.s. the Debt Management Plan we are already in through CCCS of Atlanta?

[lrprn]

We actually have a family of 4 - sometimes 5 when my stepson is here.

If your stepson is on your taxes as a dependent, then for bankruptcy purposes you're a family of 5. Otherwise you are a family of 4. In Georgia the median income for a family of 4 is $66,508. For a family of 5, it's $73,406. Your income is still well over both, so again unless there's some other financial issues you haven't shared, the chances of you filing Ch 7 are very small.

I hadn't decided to file in either direction yet.

You don't get to decide which chapter to file. The bankruptcy law mandates that you complete a required Means Test that determines whether you can file Ch 7 or must file Ch 13.

But if we end up having to file Chapter 13 then what's the difference in doing that v.s. the Debt Management Plan we are already in through CCCS of Atlanta?

The important differences are that when you file bankruptcy, your creditors have no choice - all of them MUST go along with your Ch 13 plan. Also bankruptcy's automatic stay protection forbids your creditors and any collectors they may sell your debt to from contacting you to request payments once you file and have a case number. No phone harrassment allowed

Here are a few excellent websites that explain Ch 7 and Ch 13 bankruptcy and the differences between them. They are well worth a read by both of you so you understand what you are getting into before you meet with your lawyer -

http://www.uscourts.gov/bankruptcycourts/bankruptcybasics/chapter7.html

http://www.uscourts.gov/bankruptcycourts/bankruptcybasics/chapter13.html

http://www.mroselaw.com/CM/Custom/Chapter-7-13-Comparison.asp

http://www.personal-bankruptcy-chapters-7-13-filing-laws.com/ch13/difference-chapter-13-7.htm

Hope this helps!

[JRScott]

With you income level so high it is likely you'll have to do a chapter 13.

I stopped paying my creditors months before I actually filed. However your circumstance is different as your income level will put you into the chapter 13. It is also possible they may require a 100% payback as part of that so your husband's idea might be a good one for now. (You might hop into the Chapter 13 forum and read there some to and see what folks think over there ).

One option your lawyer might suggest would be for one of you to leave your job. This would take some time but after around 6 months of only one of you working you probably given house size could qualify for a chapter 7. During that time you would however need to maintain the house and car payments, and of course meet basic household expenses. You would probably be harassed a lot to by the creditors calling . Still it is somewhat of an option.

[Blue_Ray]

You make 36K more then us and your CC payments are right @ about ours. But your home has more equity then ours and by the look of it, I bet they may want you to file chapt 13. At the end, do you have toy money to spend?

I know we can't make it, but if I made the income level like you and the assets/bills you have (almost like ours) I know I can take care of everything.