Thinking of filing HELP???

[halloweendmb1]

Thank you in advance for your thoughts...

My wife and I have reached a point where we need to do something. We have not missed a payment yet but the credit cards, student loans and mtg have now reached a boiling point. We have three kids (8,3,17 months) so my wife stays at home because daycare for 2 kids would be too much. She does work part-time about 10 hours a week and I usually just ask her to put gas in her vehicle and keep the rest. I work a great job that is 100% commission and I have been really working hard to get out of this mess, but it just isn't that easy with a car repair here, or gas being $3.25 a gallon.

We are wondering with a 401K of $10,000 and no other liquid assets if we could file a chapter 7 just on the credit cards and medical bills? I want to keep my house and I know student loans have to be repaid.

We owe exactly $43K in total credit card bills and another $10K in medical bills for our daughter. Insurance dropped her; she has a very rare medical condition that is not life threatening but she still needs to see a dr.

I don't know how BKs work I would rather file a Chpt 7 and be done with it and never have another credit card again. In credit card payments I am paying more than my mtg, property taxes, and health insurance MONTHLY. I feel horrible in this situation and am looking for help, any help at this point. I have virtually no equity in my home which we bought 2 years ago. I drive a 9 year old car which is starting to eat money in repairs.

I will admit I have robbed peter to pay paul on these credit cards and am worried with a cash advance check used here and one used there can they come after me for that? The checks are 3.9%-5.9% fixed for life (Chase) or for a year. and then I always transfer them to another account so the rate doesn't get to high.

Please help....

[lrprn]

Welcome to BK Forum - glad you found us!

We are wondering with a 401K of $10,000 and no other liquid assets if we could file a chapter 7 just on the credit cards and medical bills? I want to keep my house and I know student loans have to be repaid.

Whether you can file Ch 7 or not depends on your family's total gross income during the previous full calendar months before you file. What state are you in? How much gross income have you and your wife had for the last six months?

Retirement funds like 401K are protected in bankruptcy - that can't be taken from you.

When you file, you must include ALL your debt - you can't pick and choose (although typically only unsecured debt like credit cards, medical bills, etc is wiped out unless you want to surrender assets as well). Whether you can keep your house depends on the amount of equity (you said it's zero), which state you live in, and what your state allows for exemptions when you file.

...and then I always transfer them to another account so the rate doesn't get too high.

When did you do your last transfer?

It will help us help you better if you can answer the questions above. Also since you are learning about bankruptcy, you will learn a lot if you review these excellent websites that do a good job of explaining Ch 7 - http://www.uscourts.gov/bankruptcyco.../chapter7.html - and Ch 13 - http://www.uscourts.gov/bankruptcyco...chapter13.html . These are the two bankruptcy chapters that individuals can file. Which one you can file depends solely on how you come out on the the required Means Test. You can find a good explanation of the Means Test in non-lawyer language here - http://ezinearticles.com/?The-New-Ba...glish&id=74968

Hope this helps! Keep asking questions - we'll help you as much as we can. Again, welcome!

[halloweendmb1]

Thanks for your info here are some answers
Last year we grossed $54K with a family of 5.
This year to date we have grossed $28K
I live in WI
The last balance transfer/advance was made in July.

[freshstart06]

go to www.legalconsumer.com click on means test
This will tell you if you qualify for chapter 7.

[lrprn]

Last year we grossed $54K with a family of 5.
This year to date we have grossed $28K

In Wisconsin, the median income for a family of 5 is $79,659 - http://www.usdoj.gov/ust/eo/bapcpa/2...come_table.htm . Doubled your gross income is $56,000 - well below the median for your family size. That automatically qualifies you for filing Ch 7.

You can file Ch 7 70 days after your last balance transfer. If you file before that, the creditor could object stating you knew you were going to file and not pay before you took the money.

If you are certain you are going to file, then stop paying all your non-secured creditors now and use that money to catch up what you have been doing without - dental care, car repair, clothes, etc. - anything that's a legitimate and reasonable living expense. You can also save the money to pay your $299 Ch 7 filing fee, the $50 or so to take the required pre-filing credit course, and to pay a good bankruptcy lawyer's fees if you plan to use a lawyer to file (highly recommended if your case is not a simple, straightforward no-asset case).

[halloweendmb1]

Should I not charge anything for 70days?
Also does it matter how long some accounts have been open? For instance within the past couple months and transfered balances to them 0% for one year. Should I wait a certain amount of time on those as well?

[lrprn]

Should I not charge anything for 70days?

It's no charges for 90 days before filing to significantly reduce the chance that one of your creditors will file an objection stating that you made the charges knowing you were going to file and wipe out what you owed. It's 70 days for cc transfers for the same reason.

Also does it matter how long some accounts have been open?

It does if you opened new credit card accounts or took out new unsecured loans recently - did you?

For instance within the past couple months and transfered balances to them 0% for one year. Should I wait a certain amount of time on those as well?

If you mean that you transferred balances after opening a new card a few months ago, then you need to wait at least 70 days before filing - for why see my reply to your first question.

[halloweendmb1]

Thanks for the heads up I guess I need to wait, I probably wait at least 90-120 days to make sure. Here's to a fresh start