So I've been reading this forum for awhile now; I hope that I am not reposting ridiculously common questions. I did search for the answers so here goes.
The background:
Wife and I have been dealing with debt for awhile. She quit her job over a year ago, just before we had our first child, who ended up in the NICU for the first 2 and a half months of her life (born with one arm, and her liver in the umbilical cord).
Thankfully we had medical insurance so the losses there were not as epic as they could have been - the total billed to the insurance company was well over half a million, I think - but we still ended up with a fair amount of debt there.
On top of that, we have something like $40k in credit card debt and a second on our house for another $88k (on top of the first for $244k). The house's worth is up in the air, but we're probably slightly upside down on it at this point, maybe by $15k-$30k.
I've taken the means test using the washington state form, but I was a little confused by the ownership/lease costs section. (See the form here -end of page 4/top of page 5: http://www.wawb.uscourts.gov/read_fi...file=1378&id=0 ) The amount this allows you to claim as an expense is something like $483 (the form I filled out is at home, so I'm not sure). Does this mean I can claim that as an expense for a car that I own outright?
If it does, that means I pass the means test - I think we had $41 left over after expenses when I did the official one.
So. A few questions--
1. We just went through a situation where we found mold in our kitchen - really bad mold. The dishwasher was leaking, as was the garbage disposal, and we clearly couldn't leave it like that, especially with a kid. Homeowners insurance wouldn't cover it, because it was a seepage issue (and had clearly been going on for some time, as became evident after I tore it apart), so we had to eat the cost. I rebuilt the kitchen - or I'm almost done anyway - on my own to save money, used ikea cabinets (the old ones were rotted), replaced subfloor, drywall, etc. Completely removed everything with even the slightest trace of water damage or mold. Total cost was about $7k, which we largely paid for with credit. I realize that we need to at least put some payments and time in between us and that cost, but we honestly had no choice and we tried to minimize costs at every turn.
How would something like this be viewed? We have pretty much accepted that we might have to pay this back but obviously if we give up the house - as seems wise, given our situation - that would be something of a bummer.
2. Is it possible to use the bankruptcy - should we choose to file - as leverage to get our second mortgage to drop their interest rate or forgive some of the debt, or some other favorable arrangement that would make it so it makes sense to keep the house? Since the 2nd is through a different company than the 1st mortgage, I'm thinking that they stand to get basically nothing if the house is foreclosed on, and it might be to their benefit to do something like this. Is this even a consideration?
3. If we choose to file at some point in the future, what happens to the money we save each month by not paying on the debts? We live on less than what their standard expenses give us to live on - in fact the only absolutely non-essential that we really spend money on regularly is cable/internet - $100/mo -, so we'd probably have some money left over. Especially if we stopped paying on the mortgages in the event we chose to give up the houses - that would be $2700/mo. What is the expectation for this money?
Alternatively, are we expected to pay on the debts until the BK is completed?
4. I'm guessing that if we do this, Amex is going to revoke my company credit card (through my employer) since I owe them money on my personal account. Right? I guess it's up to me to decide if the consequences of that from a work standpoint are something I can handle.
5. I hate this stress so much and just want to find a way to pay it off or declare and be done. I do still harbor some hope that I can make a real payoff happen but it's going to be tough if not impossible, given our situation.
The background:
Wife and I have been dealing with debt for awhile. She quit her job over a year ago, just before we had our first child, who ended up in the NICU for the first 2 and a half months of her life (born with one arm, and her liver in the umbilical cord).
Thankfully we had medical insurance so the losses there were not as epic as they could have been - the total billed to the insurance company was well over half a million, I think - but we still ended up with a fair amount of debt there.
On top of that, we have something like $40k in credit card debt and a second on our house for another $88k (on top of the first for $244k). The house's worth is up in the air, but we're probably slightly upside down on it at this point, maybe by $15k-$30k.
I've taken the means test using the washington state form, but I was a little confused by the ownership/lease costs section. (See the form here -end of page 4/top of page 5: http://www.wawb.uscourts.gov/read_fi...file=1378&id=0 ) The amount this allows you to claim as an expense is something like $483 (the form I filled out is at home, so I'm not sure). Does this mean I can claim that as an expense for a car that I own outright?
If it does, that means I pass the means test - I think we had $41 left over after expenses when I did the official one.
So. A few questions--
1. We just went through a situation where we found mold in our kitchen - really bad mold. The dishwasher was leaking, as was the garbage disposal, and we clearly couldn't leave it like that, especially with a kid. Homeowners insurance wouldn't cover it, because it was a seepage issue (and had clearly been going on for some time, as became evident after I tore it apart), so we had to eat the cost. I rebuilt the kitchen - or I'm almost done anyway - on my own to save money, used ikea cabinets (the old ones were rotted), replaced subfloor, drywall, etc. Completely removed everything with even the slightest trace of water damage or mold. Total cost was about $7k, which we largely paid for with credit. I realize that we need to at least put some payments and time in between us and that cost, but we honestly had no choice and we tried to minimize costs at every turn.
How would something like this be viewed? We have pretty much accepted that we might have to pay this back but obviously if we give up the house - as seems wise, given our situation - that would be something of a bummer.
2. Is it possible to use the bankruptcy - should we choose to file - as leverage to get our second mortgage to drop their interest rate or forgive some of the debt, or some other favorable arrangement that would make it so it makes sense to keep the house? Since the 2nd is through a different company than the 1st mortgage, I'm thinking that they stand to get basically nothing if the house is foreclosed on, and it might be to their benefit to do something like this. Is this even a consideration?
3. If we choose to file at some point in the future, what happens to the money we save each month by not paying on the debts? We live on less than what their standard expenses give us to live on - in fact the only absolutely non-essential that we really spend money on regularly is cable/internet - $100/mo -, so we'd probably have some money left over. Especially if we stopped paying on the mortgages in the event we chose to give up the houses - that would be $2700/mo. What is the expectation for this money?
Alternatively, are we expected to pay on the debts until the BK is completed?
4. I'm guessing that if we do this, Amex is going to revoke my company credit card (through my employer) since I owe them money on my personal account. Right? I guess it's up to me to decide if the consequences of that from a work standpoint are something I can handle.
5. I hate this stress so much and just want to find a way to pay it off or declare and be done. I do still harbor some hope that I can make a real payoff happen but it's going to be tough if not impossible, given our situation.
NO ASSET
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