I need advise.

[SVBroke]

Hi everyone, this is my first time posting, but I have been reading the site for weeks now. I really need some advise, so here is my story (sorry if its too long). My husband and myself (we have one child) were planning on filing Chapter 7 within a few months. We retained an attorney in December 2008. We are above the median income, but with our expenses should pass the means test. We have about $70,000 to $75,000 in CC debt. A house with no equity and two new cars (worth less than we owe). No other assets.

I work for a bank, I do not handle any transactions, I'm a commercial appriaser. This bank was bought by another large international company last September. At that time, I was making a base salary plus commission. When the new bank took over, that put the breaks on all commercial loans. Thus, no more commission. I made it past the layoffs, but they told me there would be no commissions going forward only the possibility of a year-end performance bonus. This essentially gave me a 35% decrease in income. To top that off my husband is in sales, as in independent contractor (with LLC), and receives commission only. His income has dropped substantially over the last year and we have no way of knowing how much he will make in the coming months.

We stopped paying credit cards in December 2008. We are now having trouble making car payments and our mortgage. Much less get the rest of the money together to pay the attorney so that we can file. Another issue is our 2nd mortgage was with the bank for which I am now an employee. I don't want to do anything that could negatively impact my employment. We would really like to keep our house and we need both cars for our jobs.

My question is should we not pay the 1st mortgage and use any money to pay the attorney and file Ch. 13. or wait and see if we can scrape by and come up with all the money we need and still file Ch. 7. I also should not that I am subject to disciplinary actions by my employer if I receive more than one judgement for garnishment.

Any input would be appreciated.

[hereforinfo]

I'm not sure...if you are having trouble making the mortgage and car payments now, do you really think you'll be able to make them after bankruptcy? It might be better to get rid of the 2 new cars and get something cheaper. If you want to keep the house, I don't think it's a good idea to stop making the mortgage payments.

[wealth2009]

I need advice....

Hello, it appears you have several issues on the table to discuss. First, allow me to say, I am not an attorney nor do I offer legal advice. But, I will offer you advice based on my experiences in the BK system. Without sounding so ashamed of my past, I am personally filing my 8th BK over the last 20 years. Not proud, but true. What I do bring to the table is experience(s) around how the "nuts and bolts" work in BK.

If you want I can possibly offer you some advice based on my on experiences, which have been for the most part a journey to remember. I made some mistakes and feel I am suppose to be here on this site to assist those who are about to experience what I did nearly 20 years ago and counting!

Believe it or not, chp 7 is one of the most simpliest BK to file. It does not take alot of work (i.e., paperwork, etc) to get the job done. The mechanics of a chp 7 or 13 our virtually the same until you file the petition. Yes, there are several more forms in a chp 13, which must meet the courts requirement or else the case will be subject to dismissal.

After reading your post, I am to understand you all are struggling financially, due to the loss of income? It appears you have approx. $70,000 - 75,000 in CC debts. It appears you have "two new vehicles," which you cannot afford. It appears you have a first/second mortgage on your home. Which by the way, has become a burden for you to pay in a timely manner, due to your loss of income.

Well, I agree with you it might be time for you all to attain an attorney, but before you make that decision I would like to offer you an alternative. Let's see if I were you knowing what you stated in your post (and this is all I have to go by), I would sell the vehicles to make room for more cash. You can always buy another "new" car later, but you need cash NOW!!! As for me, if I chose not to sell the "new" vehicles it would be only because of my "pride."
I am not suggesting anything about your commitment to sell or not, I am just speaking about me!!

What I learned over the last 20 years and 8 BK's.... you never want to lose your home, unless you have nothing else left to give. Keep in mind you have a first and second, so the second has a junior lien on your title anyway. If you attempt sell your home in this market you will take a loss, after everyone else gets their's first. And, more importantly it's your home, not their's. There are those slick attorney's out there who will attempt to persuade you to let the house go, but don't be so hasty!!!! There are loan modifications you know... I received one for our home, after my last attorney tried to tell me our house was under water and not worth much. "Just walk away...." easy for him to say!!! He had no faith that we would come out on top with a "loan mod...."

Under the circumstances, and I did not understand whether you were in the arrearages on your cars and mortgage, but if you are a chp 7 will hurt you. If you are not, a chp 13 might be your best bet. But, remember I am only offering advice, based on experience, not any legal advice!!!

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[StartingOver08]

SVBroke, I understand your situation - most of us do here at the BK Forum

There are really two components to your situation, income and debt.
BK does take care of the debt portion, but not the income portion. It helps to plan your BK. You will want to do a little pre BK planning to get you through your new post BK life. If you can figure out what your "new" budget is with the severe income reduction you and your husband have experienced this year PRIOR to your filing BK then you have a road map for recovery. If you do the filing without the prior budget planning - it is much more difficult to recover.

Ask yourself - is the house worth keeping??? This is a more difficult question to answer when you are not upside down but have very little equity. You will want to not only figure out the current value, but can you rent something comparable for less while you are in the post BK recovery period? Consider your current payments.

As to your vehicles - get rid of them in the BK. Buy something afterward for cash - if you don't have car payments or cc payments, how does your budget look now?? Cars have brought many, many people to the BK table (houses too!).

Truly the BK can be liberating - but you have to get rid of the stuff that caused the debt, IMO. As to the income, I too work 100% commission (real estate ) so I understand it is extremely difficult to come up with a budget on commission income, but that is going to be the cornerstone of your new life. We just have to learn to project based on THIS market - not the market of 2005!

Maybe if you post some of your details we can help you a little....