Need Advice

[lmg]

Here is my situation. I live in NJ and will be going to see a bankruptcy attorny on the 2nd. After adding everything up, it looks as if my husband and I have about 100K in unsecured debt. About 70k is on credit cards and remainder is through my husband's business (sole proprietorship). Quite a bit of our credit card debt is due to this business, just living off of them hoping that things would turn around - also used some of the credit card checks to for the business (to purchase materials, etc.)

I have a few questions that come to mind...

1. We will be able to file jointly since the business is a sole proprietorship?
2. We have a mortgage and car loan which we are current on. I believe the equity in my home will be exempt but just not sure how your home value is determined. How will these be affected with the bankruptcy?
3. Two of the unsecured debts are with my credit union along with our motgage. I am currently behind on the credit card - can they take my money or freeze my account?

I'm sure I will have more questions, any advice would be appreciated - really stressed and scared right now!!

[rrockinggramma]

Your attorney will be able to tell you which chapter you qualify for, 7 or 13 based on your income/expenses etc but unless you have lots of equity in your house and car, you should be able to keep them. If you have lots of equity, then chapter 13 is how you would protect them. Credit unions are awful. They will probably make you reaffirm the cc with them. They can't take your mortgage away of course if you are current with them but they can make it tough with the cc. You might end up having to work out a payment arrangement with the cu on the cc. Or you might want to refinance the mortgage before filing to get it out of the cu and then open up new account somewhere else. Yes you should be able to file jointly. But be sure your attorney knows what he is doing.

[MomIcantFindmy]

If your checking or savings is in the same CU as your credit card. Change banks now. Before you file so it doesn't show up on checksystems. Have nothing in that account The credit union likely has a cross collateral agreement buried in the paperwork you got. They could easily take out your missed payment amount at the very minimum.

[lmg]

If I am able to file a chapter 7, would i still have to reaffirm the credit card with the credit union?

[rrockinggramma]

You can do it and I can't say for certain what YOUR credit union will do but this is what my credit union did to me. We had a secured loan (truck) and a personal loan and a credit card with our credit union. We filed a chapter 7. We wanted to continue to pay for the truck and we're willing to reaffirm. The credit union told us and our attorney NO WAY would they allow that to happen unless we reaffirmed on everything we had with them. Our attorney (who was wonderful) talked to them on the phone. The rep from our cu made him so angry that he called us and told us we were going to do a 722 on the truck and discharge it all to the credit union. Well that is what we did. Lo and behold, we were flagged by them as "no service" whatsoever. We couldn't even cash a check written on their cu! Our attorney had warned us about how nasty they can be and he was right. To this day, on that truck loan, that cu refuses to change our credit report to reflect IIB/zero balance, despite our disputes. So my next step now is to sue them in small claims court for violation of the FCRA. They changed everything else on our credit report to IIB/ but not that one debt. So with your mortgage, yes you can discharge the unsecured but don't expect it to be friendly. Change cu now!!!!! and plan to pay your mortgage payment with certified cashier's checks or take it to them and personally hand them the cash. They will probably not be happy about it at all. GL

[lmg]

Thanks for the responses, I already opened a new account at wachovia and i'm in the process of switching my direct deposit to them fromt he credit union. Turns out the credit union did freeze my account this weekend so I will need to give them a call tomorrow to find out what I need to do to get access to my money, I'm thinking they want the full past due amount on my CC. What a pain this is...

I've been doing a lot of research and from what I can tell, we will qualify for a Chapter 7 based on the means test it's just that i'm not sure about the equity in my home. If I do qualify for a Chapter 7 and do have too much equity in the home will I be forced into Chapter 13 and if so, what if there is not much left over after expenses to make any type of payment?

I see the attorney in a few days for a consult, I'm just so anxious about all this...Thanks.

[rrockinggramma]

if you are in a chapter 13 only because you have home equity, not behind in mortgage payments or other secured payments etc then the test they apply is what would your creditors received IF you had filed a chapter 7. So depending on how much equity you have, your payments would be set up so that if you have 10,000 in equity, then that is how much your creditors would receive. Your payments then would reflect that amount, spread out over 5 years. Course in a chapter 13 not all creditors file claims which reduces your payback as well