Frightened and confused newbie

[jessegirl]

No, my mom doesn't work (again, long family story there). I support her completely (claim Head of Household qualifying on taxes). So, we are good on her end. As for credit cards, no I have not used any. I think I used one about two months ago for something small ($20) but nothing since January.

Stupid question, but my bank checkcard, does that count? That's the only thing I use anymore. I have a line of credit with the bank, though, so I am considering getting a new fresh account to start from scratch.

You should be fine then.. Thats good that you haven't used any cc cards. 20.00 is nothing. not a worry.

Like starting said open a new account right away and download those statements.

As far as the bankcard that comes out of your checking right? If so, thats perfect. But just open up another account and close that one.

Goodluck.

[Koda1021]

You are right about your account. Make sure you move your checking accounts to a neutral bank without any cards or LOC's.

If you did not have a LOC with the bank, your debit card would be fine. BUT, because of the LOC when you default your bank account could be debited as an offset to the LOC. Best to be safe and open a new one. Do it before the BK.

I forgot to say, download ALL of your bank statments and cc statements to your hard drive (including the LOC statements). Go back as far as you can. Years even. Don't print up the statements until you are told how many months you need. But once you file, or get too far behind, you will not have access to your statements. That can be a problem in the BK, so be cautious and save to your hard drive now.

Thank you for the advice. I intend to get a simple plain checking account that will, from that, show the rent and all expenses paid...nothing more. My mother and I have already set on a plan for "lean" times to get through this.

And thanks for the advice on the statements. My plan was actually to sit down and create an entire matrix of all personal and business bills, and download all statements I can. I'm trying, if I can, to be completely prepared and have everything I need. Try, of course, being the operative word

[StartingOver08]

You are right about your account. Make sure you move your checking accounts to a neutral bank without any cards or LOC's.

If you did not have a LOC with the bank, your debit card would be fine. BUT, because of the LOC when you default your bank account could be debited as an offset to the LOC. Best to be safe and open a new one. Do it before the BK.

I forgot to say, download ALL of your bank statments and cc statements to your hard drive (including the LOC statements). Go back as far as you can. Years even. Don't print up the statements until you are told how many months you need. But once you file, or get too far behind, you will not have access to your statements. That can be a problem in the BK, so be cautious and save to your hard drive now.

[Koda1021]

Hi and welcome to the forum. This is defiatenly the place for you. Ask all the questions you want, non are ever stupid!!!! We are all here for eachother.

First, go see an attorney and let them tell you what needs to be done. Have the attorney do the means test. You say that you support your mom, so if you claim that on your income taxes then you should be a household of two. Does she work? If so you will have to add her earnings into yours, even though, she is not claiming bk, if any of her monies go into the house you will have to show that. As for the cars, if you are intenting on letting both of these cars go, don't remember if you said tha, then stop paying them and let them go. No sense on paying for something you intend on letting go. Take the money that you are saving from the car payments and pay the attorney with it. Have you done any cash advances or purchased any luxury items with credit cards? Also are you still using your credit cards?

No, my mom doesn't work (again, long family story there). I support her completely (claim Head of Household qualifying on taxes). So, we are good on her end. As for credit cards, no I have not used any. I think I used one about two months ago for something small ($20) but nothing since January.

Stupid question, but my bank checkcard, does that count? That's the only thing I use anymore. I have a line of credit with the bank, though, so I am considering getting a new fresh account to start from scratch.

[Koda1021]

If the majority of your debt is business related you are exempt from the means test.

I didn't know that! Thank you for that information. The business debt actually far outweighs the personal at this point (I was paying down my personal debt prior to all this happening, so while I still have a lot, it does not compare to the business debt)

[jessegirl]

Hello everyone! I'm so glad to have found this forum, as I've been spending many a sleepless night confused and fearful over what to do in my situation. I'm hoping someone can shed some light on my present situation, as I'm really not sure what to do.

The basic story is this, I've lived in Northern Virginia for 10 years. Employed that amount of time with the same company. My mother lives with me, and I support her fully. Based on my income from work, I come in at about $600 over median insofar as income for a Chapter 7. Up until January, I have paid all my bills on time. I have two leased vehicles (one is mine, one is my mother's). The first and only time I was ever late was last year when I was socked with personal property tax on both cars (I wasn't expecting it to be so high), so I had to juggle to make the payment and got behind on unsecured credit cards. I did eventually catch up on those bills. I'm also a full-time student getting a degree in Accounting as well as working towards eventually getting teaching certification. So, I've had out of pocket expenses. I have a lot of unsecured credit card debt, all maxed out.

Now, here's where it gets tricky. First, I had until recently a business that I ran from the home. It was setup as a regular corporation. Business was up and down, and I acquired credit to purchase equipment in the hopes of making a "breakthrough" that would make the business successful (there would be spurts where a particular product would really sell, giving me hope, then suddenly drop off in sales). I barely broke even, and only incurred more debt (continuing to max out my own pesonal cards as well acquiring new business credit). I even attempted a second (corporate) business, but only made it 3 months with that one and did acquire one or two corporate debts (credit card) there. On the first business, sales competely dropped off to zero right around August of last year, to the point where I could no longer maintain minimum payments on the credit cards and I stopped paying those. Along the lines, I sold equipment to keep the business afloat, etc. There is nothing left of the business, and I "closed the doors" officially on December 31st. I spoke with a business attorney who told me that because the corporation had no assets, bankruptcy for the business was not necessary.

So, that was the first financial hit, although, I'll confess because on the personal side I was ok, I didn't worry too much. I figured I would somehow deal with the "personally guaranteed" business cards when I could (i.e. negotiate, settle, etc.).

Now, hit number two is what really sent things over the edge. My debt (and issuance of credit) is based upon one factor, that I don't pay rent. As I said, my mother lives with me, and I pay all her expenses, save for the rent. This is an agreement worked out with her ex-husband (my step-father, albeit "father" for nearly 35 years) many years ago. I won't give the sordid details, as it's very long, but suffice it to say, paying our rent is the least he owes her. This has been the situation for over ten years, so I'll admit that I came to "take for granted" the rent being paid.

Well, in late December (last year) my step-father and brother got into a dispute (again, long story...I'll save it). Even though I had nothing to do with any of the issues in question, my step-father "disowned me". His first step was to officially stop paying the rent, leaving me scrambling to cover the rent in January. The rent amount is actually more than my one semi-monthly paycheck, so yes, I was floored. Since then, it has been downhill. My creditors issued me credit based on my excellent payment history that pretty much backed up the notion that I did not pay rent. Now, half my pay has to go towards rent. Obviously, there is just no way to cover all the bills. I tried to pull from here, cover this cover that, to no avail. Citibank, for instance, rate-jacked me instantly on one card, to where the payment is now nearly $1,800. I called all my creditors explaining the situation, and all told me to get bent. So, the bills little by little are going unpaid, the charges getting higher, and I just don't see a way out of this.

That said, I am totally confused as to a couple of things:

1. When I do the means test, if I don't list my two vehicles, I don't qualify for chapter 7. However, I don't want or intend to keep either, so do I not list them? One of the vehicles, I have been battling the manufacturer, and just recently settled a lemon lawsuit with them. They won't take the car back, so I'm still liable for it. The amount I'm getting is minimal, would it be ok to pay the bk attorney with this amount? The other vehicle is soon to be 3 months behind on payments, so, they will probably attempt to repo soon. If I should pursue chapter 7, should I try to do it soon before they actually take the car?

2. When I do file, do I need to list all the personally guaranteed creditors from the business side? Someone (no pro, I admit up front) told me that I had to list all creditors, so if I guaranteed the debt, I have to list it. Will this cause red flags or issues with a trustree?

3. Do I consider credit counseling or some other option in my situation? At this point, I cannot save any money. With my take-home income, and now with covering the rent, I barely make enough to pay the rent, pay the utilities and possibly cover one car and the requisite utilities and food. I'm 40 years old, and would somehow like to SAVE something at this point. I am fully cognizant that this situation is my own mistakes, and all I want is to go back to a simple way of living, and save save save. I adore my mother, but she is nearly 60 years old, and has nothing to show for it. I know that I do not want to be in that position, and want to take steps to for some bit of security.

Sorry for the long-winded post, this is just such un-charted territory for me that I am completely confused and completely lost! Thank you so much in advance for any advice!!

Hi and welcome to the forum. This is defiatenly the place for you. Ask all the questions you want, non are ever stupid!!!! We are all here for eachother.

First, go see an attorney and let them tell you what needs to be done. Have the attorney do the means test. You say that you support your mom, so if you claim that on your income taxes then you should be a household of two. Does she work? If so you will have to add her earnings into yours, even though, she is not claiming bk, if any of her monies go into the house you will have to show that. As for the cars, if you are intenting on letting both of these cars go, don't remember if you said tha, then stop paying them and let them go. No sense on paying for something you intend on letting go. Take the money that you are saving from the car payments and pay the attorney with it. Have you done any cash advances or purchased any luxury items with credit cards? Also are you still using your credit cards?

[OhioFiler]

If the majority of your debt is business related you are exempt from the means test.

[Koda1021]

Welcome to the forum! There is a lot of info here - and we have been in your shoes. This is the hard part, recognizing that you need to file. But it is the first step toward your fresh start. We will help with any and all questions as best as we know how.

Thank you so much for the reply! I feel better all ready (I'm battling bronchitis, which hasn't helped my state of mind much lately either! )

I'll admit that I spent the first two months after the whole rent debacle feeling angry and sorry for myself (because I was personally affected by people and a situation I had nothing to do with) so I didn't spend that valuable time planning on what my next steps would be. So, now I'm scrambling. But I appreciate all the advice so far, what you've told me definitely puts me a little more at ease!

One last question, if you don't mind. Regarding my car that is behind on payments. Should I catch up in order to not let it get repo'd? Since I'm only starting out, I don't know how long I've got before they take it, and I'm only now setting up attorney appointments.

[StartingOver08]

...

That said, I am totally confused as to a couple of things:

1. When I do the means test, if I don't list my two vehicles, I don't qualify for chapter 7. However, I don't want or intend to keep either, so do I not list them? One of the vehicles, I have been battling the manufacturer, and just recently settled a lemon lawsuit with them. They won't take the car back, so I'm still liable for it. The amount I'm getting is minimal, would it be ok to pay the bk attorney with this amount? The other vehicle is soon to be 3 months behind on payments, so, they will probably attempt to repo soon. If I should pursue chapter 7, should I try to do it soon before they actually take the car? List your vehicles. You need to list both of them. In fact you list all of your debt. It is ok to use the money from the lawsuit to pay a BK attorney. Yes try to do the Ch 7 before they repo the vehicle. You can surrender both vehicles in your BK or one vehicle. There are lots of threads regarding keeping or surrendering the vehicles and the various strategies.

2. When I do file, do I need to list all the personally guaranteed creditors from the business side? Someone (no pro, I admit up front) told me that I had to list all creditors, so if I guaranteed the debt, I have to list it. Will this cause red flags or issues with a trustree? Yes, you need to list all of the personally guaranteed creditors from the business side so this debt is discharged too. Since the business is closed, the creditors can come after you, so this will discharge your personal liability when you get the Ch 7 discharge.

3. Do I consider credit counseling or some other option in my situation? At this point, I cannot save any money. With my take-home income, and now with covering the rent, I barely make enough to pay the rent, pay the utilities and possibly cover one car and the requisite utilities and food. I'm 40 years old, and would somehow like to SAVE something at this point. I am fully cognizant that this situation is my own mistakes, and all I want is to go back to a simple way of living, and save save save. I adore my mother, but she is nearly 60 years old, and has nothing to show for it. I know that I do not want to be in that position, and want to take steps to for some bit of security.No, credit counseling will not help you at this point. BUT you will have to take the pre-filing course anyway in order to file for BK.

Sorry for the long-winded post, this is just such un-charted territory for me that I am completely confused and completely lost! Thank you so much in advance for any advice!!

Welcome to the forum! There is a lot of info here - and we have been in your shoes. This is the hard part, recognizing that you need to file. But it is the first step toward your fresh start. We will help with any and all questions as best as we know how.

[Koda1021]

Hello everyone! I'm so glad to have found this forum, as I've been spending many a sleepless night confused and fearful over what to do in my situation. I'm hoping someone can shed some light on my present situation, as I'm really not sure what to do.

The basic story is this, I've lived in Northern Virginia for 10 years. Employed that amount of time with the same company. My mother lives with me, and I support her fully. Based on my income from work, I come in at about $600 over median insofar as income for a Chapter 7. Up until January, I have paid all my bills on time. I have two leased vehicles (one is mine, one is my mother's). The first and only time I was ever late was last year when I was socked with personal property tax on both cars (I wasn't expecting it to be so high), so I had to juggle to make the payment and got behind on unsecured credit cards. I did eventually catch up on those bills. I'm also a full-time student getting a degree in Accounting as well as working towards eventually getting teaching certification. So, I've had out of pocket expenses. I have a lot of unsecured credit card debt, all maxed out.

Now, here's where it gets tricky. First, I had until recently a business that I ran from the home. It was setup as a regular corporation. Business was up and down, and I acquired credit to purchase equipment in the hopes of making a "breakthrough" that would make the business successful (there would be spurts where a particular product would really sell, giving me hope, then suddenly drop off in sales). I barely broke even, and only incurred more debt (continuing to max out my own pesonal cards as well acquiring new business credit). I even attempted a second (corporate) business, but only made it 3 months with that one and did acquire one or two corporate debts (credit card) there. On the first business, sales competely dropped off to zero right around August of last year, to the point where I could no longer maintain minimum payments on the credit cards and I stopped paying those. Along the lines, I sold equipment to keep the business afloat, etc. There is nothing left of the business, and I "closed the doors" officially on December 31st. I spoke with a business attorney who told me that because the corporation had no assets, bankruptcy for the business was not necessary.

So, that was the first financial hit, although, I'll confess because on the personal side I was ok, I didn't worry too much. I figured I would somehow deal with the "personally guaranteed" business cards when I could (i.e. negotiate, settle, etc.).

Now, hit number two is what really sent things over the edge. My debt (and issuance of credit) is based upon one factor, that I don't pay rent. As I said, my mother lives with me, and I pay all her expenses, save for the rent. This is an agreement worked out with her ex-husband (my step-father, albeit "father" for nearly 35 years) many years ago. I won't give the sordid details, as it's very long, but suffice it to say, paying our rent is the least he owes her. This has been the situation for over ten years, so I'll admit that I came to "take for granted" the rent being paid.

Well, in late December (last year) my step-father and brother got into a dispute (again, long story...I'll save it). Even though I had nothing to do with any of the issues in question, my step-father "disowned me". His first step was to officially stop paying the rent, leaving me scrambling to cover the rent in January. The rent amount is actually more than my one semi-monthly paycheck, so yes, I was floored. Since then, it has been downhill. My creditors issued me credit based on my excellent payment history that pretty much backed up the notion that I did not pay rent. Now, half my pay has to go towards rent. Obviously, there is just no way to cover all the bills. I tried to pull from here, cover this cover that, to no avail. Citibank, for instance, rate-jacked me instantly on one card, to where the payment is now nearly $1,800. I called all my creditors explaining the situation, and all told me to get bent. So, the bills little by little are going unpaid, the charges getting higher, and I just don't see a way out of this.

That said, I am totally confused as to a couple of things:

1. When I do the means test, if I don't list my two vehicles, I don't qualify for chapter 7. However, I don't want or intend to keep either, so do I not list them? One of the vehicles, I have been battling the manufacturer, and just recently settled a lemon lawsuit with them. They won't take the car back, so I'm still liable for it. The amount I'm getting is minimal, would it be ok to pay the bk attorney with this amount? The other vehicle is soon to be 3 months behind on payments, so, they will probably attempt to repo soon. If I should pursue chapter 7, should I try to do it soon before they actually take the car?

2. When I do file, do I need to list all the personally guaranteed creditors from the business side? Someone (no pro, I admit up front) told me that I had to list all creditors, so if I guaranteed the debt, I have to list it. Will this cause red flags or issues with a trustree?

3. Do I consider credit counseling or some other option in my situation? At this point, I cannot save any money. With my take-home income, and now with covering the rent, I barely make enough to pay the rent, pay the utilities and possibly cover one car and the requisite utilities and food. I'm 40 years old, and would somehow like to SAVE something at this point. I am fully cognizant that this situation is my own mistakes, and all I want is to go back to a simple way of living, and save save save. I adore my mother, but she is nearly 60 years old, and has nothing to show for it. I know that I do not want to be in that position, and want to take steps to for some bit of security.

Sorry for the long-winded post, this is just such un-charted territory for me that I am completely confused and completely lost! Thank you so much in advance for any advice!!