Keeping a computer in Ch. 7? Friend of mine's vehicle repo'd by unsecured creditor!

[debtmonster]

I'm going to see what my next checks come out to be. But based on last month's sales, it's not looking good. My income comes from network marketing right now, similar to those people doing Herbalife or Amway it's just my income ended up being much more than just a few hundred per month. I made $40,000 last year from this income in addition to the day job me and my wife had. This year I hardly had any day job income. My big issue is the self-employment taxes. They are a killer for me and are pretty much the main reason why I cannot afford the things I have. If I didn't have to put away that huge chunk to pay the IRS, I could just barely get by on the checks I am making. From January 2008 until August 2008 I have made $32,700 so far. I worked a day job for a couple months and made about $4,000 until I was in the hospital for chest pains and then I left the job from the stress. Then when my wife's mom came down with cancer, she left her full time job to be with her until she passed away last month.

Let me schedule the appointment and show the lawyer the whole ball of wax and see what he says.

Is there a web page I can enter all of my total debts, past due and current and my current gross income to see if I could pass or fail the means test?

[JRScott]

These are all great replies. I was reading that if you go above the median income that it doesn't mean that you don't qualify.

I am sure that many people will benefit from reading these posts, not just me. That's the entire purpose of this forum. Now people can see my income and expenses and get an idea based on your replies if they are in a similar situation.

You can still qualify for a chapter 7 if you are above median income. It depends lot on your debt etc.

The only way you'd know for sure is to fill out the full means test. That said I really think that the cars and house would be found an undue burden and it is unlikely a judge or lawyer would sign the reaffirmation agreement.

In essence you'd need to say Hey we are reaffirming. Then get past the 341 and never sign the reaffirmation. Then if you have to let them go later you can't be held responsible for deficiency balance.

[debtmonster]

I do apologize that you were offended...

However, I did not say that you were a troll... I said "At first, I thought you must be a troll."

Why? Because some things did not make much sense. You were coming up with reason after reason that you needed a BMW SUV. It just is not rational for someone in the situation you are in! "I can't pay my bills, and probably won't be able to after a bankruptcy, but I need that BMW!" Sorry, but sometimes tough decisions need to be made.

You know, getting rid of "stuff" really sucks at times. But, it is a correction. Hopefully, things improve from there.

I do wish you the best, and I hope that you get the help that you need on all fronts. You owe yourself that much!

BTW... Beemer can offer 1.9% on used vehicles because the rate has been bought down by the dealer. Anyone will offer that rate with sufficient buydown.

I wish I could give it back, start fresh and get another brand new car... a cheap one... for like $200/mo. with $500/down. Whatever happened to those deals? We need the $10,000 cars back again. The last time I went to buy a Hyundai Accent, they wanted $17,000 for a 3-door, 5 speed at 16% interest with a much better credit score than I have now. Imagine going in there for the same car after a bankruptcy and having no money down since I paid it all to my attorney.

[Never_Again]

I do apologize that you were offended...

However, I did not say that you were a troll... I said "At first, I thought you must be a troll."

Why? Because some things did not make much sense. You were coming up with reason after reason that you needed a BMW SUV. It just is not rational for someone in the situation you are in! "I can't pay my bills, and probably won't be able to after a bankruptcy, but I need that BMW!" Sorry, but sometimes tough decisions need to be made.

You know, getting rid of "stuff" really sucks at times. But, it is a correction. Hopefully, things improve from there.

I do wish you the best, and I hope that you get the help that you need on all fronts. You owe yourself that much!

BTW... Beemer can offer 1.9% on used vehicles because the rate has been bought down by the dealer. Anyone will offer that rate with sufficient buydown.

[debtmonster]

I warned my wife about using her credit cards too much. However, I threw up my hands and made her do the bills.. All of them. This was 2 years ago. As money got tighter and tighter.. she started to complain. I let her manage everything. I went into the hosptital in June. Although I have insurance it's going to cost us $$$ we don't have and we have already been garnished once for medical bills.

My point.. she dealt with the paying the bills and the stress of not having enough money. After the hospital.. I went to her and said "we both are to blame" for this and we both need to get out of this. I have done a majority of the BK work... However, I made her do some of the tuff paperwork.

In otherwords.. make this issue both your fault and she may come around. It is another difficult change she is going to have to endure... tell her that. Best wishes

One last thing.. being "the man/woman of the house" requires making some of the tuff decisions and acting on them.

I agree. But everything is in both of our names. She has to agree to sign the paperwork to file, otherwise I only get $1,000 of personal stuff to keep and our personal stuff exceeds $1,000.

[debtmonster]

I can only imagine with the payment, Ins. cost plus the cost of gas what your actual payment is for your SUV. just a thought.

Speaking of that, the insurance bill just came for both cars. $110/mo.

For about $70 I can go about 425-430 miles on a tank. Lately I'm not driving it much. Being unemployed, we hardly spend any money on gas now.

[Mi Bankruptcy]

I warned my wife about using her credit cards too much. However, I threw up my hands and made her do the bills.. All of them. This was 2 years ago. As money got tighter and tighter.. she started to complain. I let her manage everything. I went into the hosptital in June. Although I have insurance it's going to cost us $$$ we don't have and we have already been garnished once for medical bills.

My point.. she dealt with the paying the bills and the stress of not having enough money. After the hospital.. I went to her and said "we both are to blame" for this and we both need to get out of this. I have done a majority of the BK work... However, I made her do some of the tuff paperwork.

In otherwords.. make this issue both your fault and she may come around. It is another difficult change she is going to have to endure... tell her that. Best wishes

One last thing.. being "the man/woman of the house" requires making some of the tuff decisions and acting on them.

[jpntx]

I feel bad for you, there's nothing worse than having a Husband/wife that is not supporting.

Your wife needs to realize that is just stuff, I would give the shirt off my back if it meant my husband not being stressed out. she seem to be fixated on owning a BMW. Life happens and perhaps the lifestyle you had before is not the life style you could have now.

We have all been there, where we fall on the credit trap, I have learn that if I find the need to charge things, maybe is because I can't really afford them to begin with.

Good luck to you.

[scubaman]

I can only imagine with the payment, Ins. cost plus the cost of gas what your actual payment is for your SUV. just a thought.

[debtmonster]

These are all great replies. I was reading that if you go above the median income that it doesn't mean that you don't qualify.

I am sure that many people will benefit from reading these posts, not just me. That's the entire purpose of this forum. Now people can see my income and expenses and get an idea based on your replies if they are in a similar situation.

[kileyj]

counseling

You can get FREE counseling. Call around in your community. If you go to church ask your clergy. Call your insurance company for who to go to in your area.

Can you file for just YOU? Your wife is going to end up in the same boat if she isn't careful w/ her spending and doesn't change her outlook soon. If she isn't going to go along w/ you on this then make sure your future cards/accounts don't have her name on it. Her boat is going to sink.

Can you sell the house and move into an apartment?

I hate it but we did that. We sold a very nice home - at the time we bought it we could afford it - but as years went on and things happened we were going into debt fast. We sold the house, barely made anything on it, and now we're in a tiny cramped apartment. We sold almost all of our furniture on Craigslist. And you're right, you won't make much on anything but you might as well take what you can and get a small apartment. The smaller the better. Why? Because you won't have a spot to put something new. It helps w/ cutting back on spending.

Get rid of the cards. Don't give any excuses. Get rid of them and get something that is very cheap. You'll find them on Craigslist.

My husband is going to be filing. He'll have to get rid of his car - which is paid off - and he'll have to get a car that is worth no more than $3,000. Sucks but you have to play by the rules if you want that clean slate.

The wife needs a serious wake up call and maybe if you let her sink she might see the light and come around. It sounds like it's already too late for her as at is so let her file for herself.

She may just be as stressed and scared as you are and is too afraid to come face to face w/ the reality of it all.

It sucks but it gets better. Keep telling her that.

[woeisme]

You won't consider counseling, although there are ways to get free counseling from clergy or other income based places (have you even checked your insurance? I was really surprised when I found out we only have a $10 co-pay for each counseling session when my step-son was having problems due to the death of his mother).

Your wife is suffering from several emotional upheavals at the moment, including the death of her mother, which might be contributing to her being so inflexible on another big scary change at the moment, bankruptcy. That's tough, and is complicated by the timing with your financial problems, but it is really possible that as she has time to cope with the other issues going on, maybe she will start to wake up to the financial problems.

But please, don't consider a permanent solution like suicide to a temporary problem. Your life is surely worth more than an SUV and a pile of bills!

[JRScott]

Before we were not living beyond our means. Now we are since our income is almost cut in half. I have talked to people who have filed BK and they told me it was no big deal.

I don't know why the banks don't offer 1.9% financing on used cars instead of new ones. BMW is the only one I know that does this. You can get a 2 or 3 year old BMW with .9 or 1.9% financing and get a 100,000 mile warranty to boot. Why can't GM, Toyota, Honda and all of the others do this instead of punishing us with 12 to 18% used car interest rates?

The way to buy a used car is from a person who was ready to trade it in and buy it for the amount the dealer was going to give them. The used car dealers typically get $5k in profit when you buy a used car. I can't see paying that kind of money and I don't have $16k cash to buy it for cash.

As of right now, my father-in-law has that Honda Oddsey van. If we had the cash, I bet I could buy it for $16,000 to $17,000 from him. I see the same van selling for like $23,000 on the used lots. I'm not a big fan of mini-van's, but if we did the BK, I would love to take the payments over. That vehicle would be very practical for us, plus it would do him the favor of getting rid of it. He can no longer afford the payments since my wife's mom passed away a couple weeks ago.

My wife is coming home tomorrow. I'm sure she'll do what she always does... every single time I bring up the BK subject, she tells me to shut up and stop bothering her about it. I told her that she cannot keep ignoring this. I told her wait until April of 2009 when we file our taxes and I have not paid any of the vouchers all in 2008 because I've been paying creditors instead. If she thinks it's bad now... wait until it's time to deal with the IRS and get slammed with penalties and fees that you can't make go away. It will make doing a BK look like a picnic.

Don't pay cash for the van. Remember you can only exempt so much when you file bankruptcy. Better to perhaps let the father in law let you borrow the vehicle until after bankruptcy then either buy it then or make the payments for him.

Try to pray some, I think that's what you need most. The kind of help you need most right now we cannot provide, but God, he can provide if you trust in him.

[JRScott]

Yes, I have showed her. She thinks that going back to work for $200/wk. will fix this. I told her she would need to make $3,000 to $4,000/mo. to fix this. $200/wk. will not put a dent in the money we need. It's just making it worse because she's putting all of those miles on the car to get to work since we live so remote out in the middle of nowhere. For me to get a good paying job, I have to drive 90-120 miles away. We can't sell our house because it's upside down. And even if we did sell it, we can't buy another one since the banks are more strict about giving out loans. And now that our credit score is like mid 500's and my wife's is about 511, nobody will sell us a house. Plus the fact that I have apt evictions on my credit report from the past, no apt will let me rent. I already talked to a couple about it. Not to mention that renting is a scam. When you rent, you're simply paying somebody else's mortgage and not getting the tax benefits. I get a near $10,000/yr. write off that I could not get with renting an apt. And an apt similar to what I am living in now would cost more than we're paying. I've talked to lots of friends who have seen my house and when I tell them what I pay for the mortgage and utilities all of them have said unanimously, "You will never get a place that cheap down here. You're better off staying there."

It's getting to the point where suicide will be the only way out for me.

Okay suicide is not the answer, that won't solve anything.

Have you asked your wife to pray with you about it. Even if you are not normally church going or praying people, it might do a lot of good to just kneel together and pray.

You might mention how much you love one another, how important your marriage is.
You might mention the drastic loss of income.
You might mention that your wife has attempted to get employment but it is not enough to meet the present need.
You might ask about the house and whether you should keep it.
You might ask about the SUV and whether you should keep it.
Do this for each such thing. Listing each out best to your memory in the prayer asking for the Lord's guidance on each issue.
Ask that he awaken each of your minds to the situation fully, that you might be able to find the solution that can keep you together.

Hopefully new doors will be opened and new understanding gained.

[JRScott]

I would never own another Hyundai or Kia again. The BMW will far outlast a Hyundai. Try putting 300,000 to 400,000 miles on a Hyundai. The Highlander does not get 30 MPG unless you get the Hybrid. No bank will finance me without a huge down payment. The thing is we have the car we like in our possession right now. If we lose it, we will have to go without a vehicle for a very, very long time until we can save up to replace it. If I lose these vehicles, I have no intentions on paying 23-26% interest on a used car from some lame buy-here pay-here and then deal with all of the break downs.

If I were single and not married, this bankruptcy would be a WALK IN THE PARK. I would give it all bank, including the house and go rent a $400/mo. apartment some place out in Kansas or something. Being married to a wife that wants to keep everything, it makes it very hard.

Next month's income may be $3,000. Out of that I need to put away 20% for taxes, $400-500 for my business advertising and then all of our other bills which are something in the lines of this:

Car #1 $740
Car #2 $309
Mortgage $821
2nd mortgage $110
Electric $120
Gas $400
Food $400-500
Car insurance $110 (which is cheap for 2 brand new cars, including the $43,000 BMW!!!)
Home owner's insurance $240 (paid every 3 months)
Internet/phone $100 (used for business purposes)
Rooms to Go $75
Then there's the credit cards
Bank of America, HSBC (several), Citibank, Amex, Sam's Club and a long list of others.
Clothing... home repair...

the list goes on and on and on and a $3,000 gross check will not cover it.

What sucks is that we're over the median income for most of this year. I have to wait for 6 months now. And by December, the Christmas bonus will come and mess it all up and then the clock will start again... so it may be until July off 2009 that I can file!!!! THIS SUCKS! I want to do this NOW and get it over with.

The problem is... how do I do it with this history of income?

1/15/2008 3384.78
2/15/2008 2983.16
3/14/2008 2998.66
4/15/2008 4250.89
5/15/2008 5212.48 (plus had day job income added on top of this of about $1600)
6/16/2008 4328.14 ($1600 of day job income added)
7/15/2008 4977.02
8/15/2008 4615.87

Those numbers above are income I made from a home business, plus we had extra jobs. We don't have the jobs anymore since we left them to go be with my wife's mother who was dieing from cancer. She ended up passing away at the end of August. She lived 340 miles away. My wife ended up acting as a full time nurse for her as she could not walk or do anything in the last days.

With your income as it is you will probably need to wait 3-6 months at the lower pay rate before you can file.

You seem adamant on keeping the SUV but really it is not what you can afford on your current wage.

Your house is also to expensive eating up 31% of your income. The SUV if you make 3000 is eating up 25% of your income. That's over half your income just for a home and transportation before counting gas, food, electricity, water, sewer, taxes etc. You mention you have to put away 20% for your taxes, if your taxes will be that much this year that means that you are consuming 76% of your income just in home/SUV/taxes before buying any food etc.

You can't live that way.

Regardless at the moment the main problem is income. At the present you probably have to much income to file a Chapter 7. If you filed today you could possible get into a Chapter 13, but you'd need the SUV which is probably to new to cram down on payments and the house in it and hopefully cram down the house.

Ultimately though I don't believe in the long run you can keep the house and car. Even if you later do a Chapter 7 6 months down the road, do not sign reaffirmation agreements for them, if you do you will probably wreck your life as I see now sustained way you can pay them off in the future in your present situation.