Looking for feedback

[Newlife29]

Where do I start I guess. The past 2+ years have completely destroyed my family and I financially. My income has dropped over 80% in 2007-2008 from 2001-2006. My wife and I have thought about Chap 7 down the road since we have burned through savings/investments (besides Rollover IRA) the past 2 years. In 2+ years we have accumulated around 200K in credit card debt as well trying to stay afloat with the house, cars, kids, etc. Our income is easily under the means test but how will a court look at it if we accumulated that much debt that quick. We only spent the $$ on everyday living and my business. Nothing questionable. The business is now gone because of the real estate industry. It did not make sense to go any furtur with this current market trend. I am now trying to figure out exemptions just to see where we stand. An attorney told me that federal exemptions are usually best and that you exempt a decent amount so we can start fresh. Something about 8K car exemptions per person? Is that true? Does anyone have a website for those? I appreciate any feedback.

[BROKENN]

Hi and Welcome! No, if nothing is questionable do not worry! And lots of businesses are going down. We too are one of them

Here is a great site for means and exemptions per your state (don't know your car exemp): http://legalconsumer.com/bankruptcy/...test/index.php

And another: http://www.usdoj.gov/ust/eo/bapcpa/2...anstesting.htm

Good luck!

[TEW]

Welcome to the forum
No one is going to ask what you spent money on. that's not what this is about. If living off CC's was a crime I'm going away for a long time. most of us here got here the same way most everyone one here went down with a fight until we had nothing left.
good luck and let us know how your doing.

[JRScott]

The first thing to decide on exemptions is to find the exemptions for your state and then the federal. Compare the two and see which is the best option for you. The lawyer could be correct though but depends on your assets that need protecting .

[Flamingo]

Once you lose the job or the income drops, you hit the savings and when that is gone you rob Peter to pay Paul as to the credit cards until everyone, including Peter and Paul, is broke. That is how many of us on this forum got to filing BK. I call it the black hole prior to having to file because that is just how it starts. You have high debt and then the job or business goes taking away a large percentage of your income. Unless you can replace the amount of that income in a short period of time, the downward spiral starts. The mistake many make is not investigating filing BK sooner and fight hard utilizing other credit or sources trying not to file. Unfortunately, as we all find out, it just doesn't work that way the majority of the time. The original large debt, plus the accumulated debt while drowning, is just too much for anyone. Now you see why banks and lenders are scaling back on the amount of credit lines and limits on available credit.

Attorneys and trustees are aware of folks utilizing credit to survive prior to filing. As long as you are honest and forthright, you will not have a problem. Best of luck to you!

[AngelinaCatHub]

Welcome to the forum
No one is going to ask what you spent money on. that's not what this is about. If living off CC's was a crime I'm going away for a long time. most of us here got here the same way most everyone one here went down with a fight until we had nothing left.
good luck and let us know how your doing.

AMEN Also to add, we started to bounce checks attempting to beat 'float' that now electronically does not exist. At this time we ran out of checks and I refuse to order more, and we have one debit card and if there is no money in the account the card is dead till there is. I liked what Flamingo had to say about the black hole right before realization that you are over your head. Our new start is working, we are using Angelfoodministries product and I'm pleased to say, that there is a light at the end of that seemingly long tunnel. 'Hub

[Newlife29]

We are going to put our house on the market at the beginning of Dec. We can no longer afford to rob Peter to pay Paul in terms of these payments. OUr investments are now tapped. It is sad because we thought it would be a house we lived in forever with the kids. It was our dream house but it has become a complete nightmare. We put down 20% on the house back in mid 2006 (worst time to have bought). Sale price was around 1.1 and we put in around 150K (through savings and Home Equity Line) right off the bat. A few realtors are telling us the value is around 950K or so. Right now with both mortgages we owe around 970K. We are thinking to at least try and put it on for 1 mill to break even after the realtor commissions and things. Couple questions though about this.

1. Let's say it does not sell and the banks (1st is with one bank and 2nd is with another) offer to short sell it. Will we be 1099'd for the difference? Can that difference be put into BK?
2. If the home does not sell then it looks like my wife and I can use $10,125 each towards anything in terms of exemptions? Is that the case for federal exemptions? AM I reading that correctly?
3. Both cars are under my name right now. We are looking to get rid of one because their is a decent amount of equity (worth 18K and owe 6K) in it and buy a 7-8 year old car and use the $$ for everyday expenses up until we most likely declare. Is that OK?
4. I thought I read a law that states the gov't can not tax you on short sale proceeds up until 2011 or 2012. Is that true? Does anyone have a link to that? I read something in money magazine a few nights ago.
5. We have been using our credit cards for everyday expenses still. That is the only way to really get by. Do trustees look at that if you are only using them for gas, groceries, and every day type bills?

I appreciate all the feedback. Just very stressed about everything.