1st time here, need advice, please

[kjb1969]

Last night me and my wife crunched some numbers. We bring home $4150 a month. All our bills, min payments on all cc, utilities, mtg, food, gas, cars, medications, and $40 each a week spending money comes to $5100. Again thats paying only the min on all cc.

So that puts us Apx. $950 in the hole every month. We both have made some bad choices to say the least. it really got out of controll when our first born entered our lives 2 +yrs ago. (daycare, food, ext)

for the past few months (6-7) i have been moving money from 1 card to another, transfering $ for lower intrest, ext.
It has caught up to us. every month we are charging the $950, plus, just to break even, i have enough credit left to keep us afloat for 6 or 7 more months.

Our credit scores are around 725 and ALL bills are CURRENT and have NEVER BEEN LATE AT ALL. In 6 or 7 months there will not be enough money to pay for our bills.

We are first time homeowners in our home for 3 1/2 years in a townhouse (Never late) and it is currentley worth almost exactley what we owe.

i work a part time job as well from April to November and it brings home apx. $600 a month bring home.
Full time job.. 39,700 Gross last year, less this year due to overtime cuts. Wife makes 38,500 gross a year.
Three of us total, in N.J.

I am already working 65 hrs a week, the time away from my daughter is not easy, to say the least!! I was going to sell my car and get a clunker, but that will only save us around 425-450 a month including car insurance. We would still be in the hole!!! There is simply not enough money coming into our household and time is running out!!!!!!!!!! Kevin

[kjb1969]

Help!!! Anyone??

[familyof7]

You need to check out the means test but from what I gathered you are below the income limit so you should qualify for a chapter 7. You need to conult with some attorneys in your area. If you are going to file STOP using credit. Stop paying creditors you should wait 60 to 90 days min before filing from the last charge. How much equity do you have in your car or home. All of these things must be considered before filing. BUT DEFINATLY call an attorney 3or 4 even and chec out your options.

[Minnymouth]

Welcome to the forum, sounds like your world is starting the "turn upside down phase" of your life.

When figuring your bills up - you DO NOT figure in cc bills as part of your monthly payments. Any creditor that you owe that you are not keeping - cc debt, house, car, etc you do not add these monthly payments into your monthly cost. This is only actual bills of home (if you keep it), autos(if you keep them) household expenses (utilites) etc.

Have a meeting with at least 3 attornies and see what their professional opinions are.

When you take out the expense of all the credit card payments, does it leave you a lot of extra income at the end of the month....... if so, you may be looking at a Chapter 13.

Keep us posted.

[kjb1969]

k

[JRScott]

The Trustee most likely will not allow 40 dollars a week Blow Fund each (That's 80 dollars a week or 320 dollars a month).

I realize you are researching your options.

You would want to file when your income is lowest. The look back period is 6 months. So Ideally you would want to file within 2 months of just doing the full time job. (so 4 months pay from FT Job, and 2 months pay for FT and PT job).

Given your income level it is possibly you might still be forced into a Chapter 13.

You should complete a means test to check if you pass it. It might do well to schedule 3-4 free consultations with BK attorneys in your area. They can better advise you on your options and give you an idea if your if your expenses are on par with what is normally seen.

[reallynervous]

Kevin,

Your situation is very much like ours in that we were charging a lot of living expenses to be sure to continue to pay our credit card bills each month. That is obviously not a good situation to be in as you have identified.

First thing would be to add up your GROSS income for the past 6 months. Then take that 6 month total and double it to get an annualized number. This information is used for the Means Test other posters have referred to - a basic first test to see if you will qualify for a Chapter 7 bankruptcy without a presumption of abuse.

You will compare that gross income number to the median income for your state. You can find that number here...

http://www.usdoj.gov/ust/eo/bapcpa/20070201/bci_data/median_income_table.htm

That should give you an idea of which type of BK you may be looking at.

I don't know your actual total amounts of debt, but I would say that if you are sure you will need to file BK, then you will want to stop using your Credit cards and use only cash to pay your living expenses. In your case, as it was in ours, it will mean that you will have to stop paying your credit cards and that is a scary feeling when you have been working so hard to keep them paid on time.

As previously mentioned, you need to figure out what your monthly expenses are as your attorney will need that info.

I know it is an overwhelming feeling to reach that realization point. But it is also a starting point to rebuild things.

Once you get those numbers together, do schedule some attorney consult appts and see what they say.

Good luck!
ReallyNervous