New here. Don't know what to do.

[wilbur61]

Hi forum.

I'm glad I found this forum. Thanks to all who share and help others.

I am in financial trouble, and think my only option is chapter 7 bankruptcy. I'll try to be brief about my situation.

---Over 80K credit card debt
---Owe 380k on house in Miami, Fl that's worth maybe 250k (no way to know true market value because no houses are selling)
---Owe around 40k in income takes from 2007, which I haven't filed yet.
---Unemployed since Sept 2008, but driving taxi when available.
---So far unable to find job in my profession.
---Sold almost all personal property, including car (replaced with a junker). With proceeds from this and from dirivng taxi I have kept current on credit card bills, but primary mortgage is almost three months behind. I thought I would have a job by now, and that selling things would carry me until I started getting a paycheck. But no job yet.

How did I get into this? I borrowed money against the house and on several credit cards and used the money to make risky investments in stock options. Now all is lost. It is my own fault, and I have no problem admitting that.

I always had good credit up til now.

Today I have a credit card payment due. I have a few hundred dollars and could pay it, but in the next few days other payments will be due and I won't have the money.

Questions:

---I'm going to need cash to pay lawyer and fees to file bankrutcy. Should I stop making payments to creditors now so I will have cash to file and to survive, or should I keep making payments until my last dime is gone?

---I think I'll file my 2007 tax return today even though I have no money to pay. I'll also file my 2008 return, which I should have a refund coming that will offset some of what I owe. Is that the right thing to do?

---Should I file for chapter 7? I don't know when I'll have a steady income agian.

---Should I file now, or wait until I've defaulted on all my payments (which will be in the next few weeks if I stop paying now)?

---I would like to have at least one credit card available in case I need a hotel room or car rental or other transaction that requires it. If I keep paying at least one of them, will I be able to keep it?

Sorry for the long post. If anyone has some ideas which may help me figure this out, I'll be very grateful.

Thanks, and have a nice day!

[StartingOver08]

You have come to the right place - welcome to the forum!

Right now, you and your family come first. Just based on what you have posted so far, it looks like you need to stop paying the unsecured debt to start to save money to file for BK. Also it is a good time to plan your filing so you have the best result.

It will be difficult to keep even one card if you stop paying all cards or stop paying all but one - the universal default clause usually kicks in and all the cards close the accounts. Besides, one of the things you want to do is live on what you make. Putting together a budget is paramount for getting through this time - even when you are filing a Ch 7.

Have you had recent purchases, balance transfers and cash advances? This is the time to review what you have been spending to see if there are any potential issues. The forum here can answer a lot of your questions regarding handling any type of issues in your BK planning. Part of your planning will involve figuring out your income sources. Since you do not have a steady source of income yet, that takes first priority. Get your income in order and then take care of the debt by BK.

By all means, go ahead and file for the 2007 and 2008 income taxes. It is better to go ahead and file. The returns need to be filed anyway before you can file for BK. As to the amounts due, you can work something out with the IRS in the way of a payment. But, right now, it is important just to get the returns filed. The payment part can be worked out a little later.

Remember, family first. Living expenses first. Believe it or not, this is the hard part - making the decision. We are here to help you in whatever way we can.

[wilbur61]

StartingOver08,

Thanks so much for the kind reply. I took a 3k cash advance on a credit card last month to pay some bills and to take one last stab at some stock options (and feel bad about that). In November I purchased an expensive watch with a credit card (sold the watch already). I messed up.

I'll file by 07 and 08 returns right away.

How do I find a good lawyer? Should I find one and file now, or wait until my tax returns are filed and I receive correspondence from the IRS?

I'll continue the search for steady work. I'm planning on going to truck driving school to get my tractor trailer license. This will be a quick way to open more doors for employment. My career is in accounting, but I like getting my hands dirty. I said I was unemployed, but I actually resigned my job last September, so I don't receive unemployment benefits. I never had a problem finding a job before.

Again, thanks for your kindness.

[StartingOver08]

You will want to file your tax returns first.

Then start interviewing 3 to 4 BK attorney's possibly more. There are threads in this forum on what to ask. But really, your first priority is to get your income steady, then file. This will give you time to not only find the right attorney, but put some time between the cash advance and the filing date.

[wilbur61]

Ok, thanks!

I just want to clarify...I bought a $1500 watch, but had to sell it a few months later because I needed the cash. My intention was to keep the watch, but I couldn't. I think I might have given the impression that I bought it with the cc just so I could sell it and get some cash. That's not the kind of person I am.

On the cash advance money that I used to buy options...that was a foolish last ditch long shot at keeping me afloat.

I am guilty of poor judgement and wishful thinking, but not fraud.

I probably didn't need to say all that. Hope I didn't offend.

Good luck to all, and thanks again to StartingOver08 for the valuable advice!