Live in Texas, thinking about Chapter 7

[RunAmuck]

I'm new so go easy and understand I'm completely new at this, and scared out of my mind.

My wife and I have a business; 70k in CC, CL are being lowered, and now rates just moved to 17% and 25% on them but we pay well but 1/5 goes to them, not principle. 50K loan at 1% in the business name. I myself have a steady job (my wife ran the business and no I am not pointing any fingers). It is not incoporated - all under her name for WB purposes.

The business has a few PC's, desks, filing cabinets etc. Maybe 1K of worth at today's values. We are closing the office and moving back to home in what I believe to be a futile effort to save the sinking ship.

We are thinking of doing this but want to know when/if we should. We are up to date on all of our payments but it will not last long now as rates have gone up and clients are paying very late or not at all. We were proud we could always say that. Should we file now while we are still up to date? Or wait for things to catch up to us, start missing payments, racking up higher bills, etc? Will the government even see us as a candidate?

I have a small boat I plan to sell for what I owe in it to just get rid of the payment. If I can get rid of it, at least its less paperwork.

Both of our cars are recently bought on credit and as well as all things, underwater, but we are up to date on payments.

We have a few small things we'd like to keep, what do we do with them pre-file?

I assume our house is ok ?

I have a 401K at my work as well -100k. My wife has a small one with the company 18k. Lost lots on those as you probably did. Do they do anything with those?

I don't know all the things to ask and have never been through anything like this. I want to thank you all who may help me through this.

Thanks,
Chris

[TEW]

well welcome to the forum.
Things you need to think about is how long ago was the last us of the CC’s it’s a good idea to wait at least 90 days after a any charge over $600. The boat you can just let the repo any deficiency would be taken care of in the BK, the house depends on how much equity you have in it. The cars you can keep is you keep paying for or you can let them go and get something cheaper. If you are going to filing you can stop paying the CC’s or for anything you don’t want to keep.
Make some appointments for free consults BK attorneys it’s a good idea to talk to 2 or 3.

[StartingOver08]

If you decide to sell the boat before the BK, then make sure it is for market value. Keep a record of other comparable boat sales in your area, keep a record of the transaction and be prepared to list it on the petition for the Trustee to review. Make sure no friend or family purchases the boat as that is considered an insider transaction.

Do not charge on your credit cards for at least 90 days prior to filing. Do not do any balance transfers or cash advances either. If you prefer to pay up to the time of filing, it is up to you, but it is wasted money as the cc's do not give you a break for paying more up to the time of BK. Does it matter if you BK on the card for $1000 or $10,000? I don't know if the cc's make that distinction in your records.

[Flameout]

I also live in Texas and had a business that I had to shut down. The path you are about to travel is well worn. It may look real rough right now, but believe me, there is sunshine at the end.

Now with that said, my recommendation is to stop paying on your credit cards. You are throwing money into a fire. As far selling the boat, keep in mind the trustee WILL want to know what you did with the money you received from the sale. There is a 99.5% chance your house is exempt!

Be sure and find an attorney that will work with you on a Chapter 7. Most will want you to go a 13. My attorney told me that if the debts are 50% or more from your business you go with a 7. We had a small problem with our trustee on this one but my attorney must have been correct because I was discharged with a 7.

I can assurance you that once you file, you will feel the weight of the world lift from your shoulders and you will start to sleep again. There is life after BK.