Having trouble keeping our heads above water.

[Backlyn]

I reside in PA and know several surrounding areas that have bus service to NYC daily so people can commute. The Pocono area in particular used to be this lazy country area with skiing and resorts and now its become ghetto land in some areas. Makes for quite a culture shock for the people who have lived there their whole lives. The schools have had big problems as well. You have a mix of backward poor farm kids with street smart city kids and the drug situation is out of control. This is all irrelevant to this topic but someone mentioned commuting. You can get a banging house here though compared to what you will pay in NY/NYC. It personally would drive me nuts having to ride a bus 3-4 hours every day. That isn't a life in my opinion but its not a choice for many.

[rusty95]

As I understand it, there are folks that live in Pike County, PA and commute into Manhattan. Evidently it is very inexpensive to live there. You could get a car like a Smart ForTwo for only $12K that gets 41 mpg.

One would need money for a down payment on a house and the 12K for the car. Other wise it has been thought about. I actually have a friend at work that commutes from the Poconos.

[LSUTiger32]

Thank you for telling me of your experience. It was a big help.
Unlike the others that gave great advice and opened my eyes you weren't dead set on me selling my house.

Dude, do you read well or not? I have said three different times that if you wanted to keep your house that I understood. I could not afford my house when I decided to file but guess what......I build the house from the ground up with my own hands after Katrina tried to take it from me forever. I understand wanting to keep a house more than anyone, I promise you that. I knew though that I had to make changes in order to keep it. That said, I was never over 60% of my net income but I was just below 50%. I think you can do this and keep the house but as I said several times already you will make serious SACRIFICES in order to keep it.

I give up.....again.

[JackBondLove]

Maybe it's time for a little education. I live in Suffolk county. Now I don't care what the IRS says but you can not live out here or any where else on the Island or the city area for 1650 a month. Not going to happen. Now you can look up houses all you want but you won't find anything under 400,000, unless you want to live in a crappy area where you are not safe. So if you look find out the good areas.

As I understand it, there are folks that live in Pike County, PA and commute into Manhattan. Evidently it is very inexpensive to live there. You could get a car like a Smart ForTwo for only $12K that gets 41 mpg.

[JackBondLove]

I think I understand what the OP is saying w/r/t the dependents. He has used a high number for the purposes of the W-4, which only affects the amount of tax deducted from his pay. It is really an irrelevant number so long as he has enough tax deducted for his total tax liability. The important number of dependents is what is on the 1040 form. This is what the bankruptcy court uses.

[rusty95]

In reading through all that has transpired from the initial posting. I am wondering why you are even going to file on a piddly $45K amount, if you have everything else covered and have avenues to get more cash. Cut up all cards after you attempt to get the rates reduced (good luck on that) and use whatever extra amount of cash you can come up with to make those CC payments.

I stopped paying my credit cards in August 2008 when I retained my lawyer. We were current on everything, just stupidly used up all savings and already used up all equity in the home trying to solve the CC situation in the first place. We just formally filed in October 2009. We were deemed a CH7 asset case because I used part of home equity loan to get the title to my SUV, another dumb move. What happened after I stopped paying the cards? Well for one we had actual money in our pockets for the first time in a while but unfortunately our income was affected with the economy. What transpired after that was the calls started. I told them we were pursuing ch7 and gave them my lawyers name and number. The calls kept up for well over a year, however, the notices then came with "Your balance is $20K but if you pay us $3K we'll call it even". The only problem with this is if you take the cash you are saving by not paying the cards and wait for the "deals" to roll in, they can slap you with a 1099. Because when they reduce what you owe them, they pass it off to you as income. We had the mentality that we would implode or something if we stopped paying our cards. I was actually shocked by the process that some places would be like "give us a call after you file and we can set you up with a new card"!!!!!

As you stated with the house you feel stuck there, have your jobs and family close. It may not be possible to move. I also understand about never owning a home again after you finally realize the American dream and are able to buy one. I have a $1100 mortgage, $555 a month is our primary with everything included taxes, insurances etc. I wish we never touched our home equity to pay down the cards. It just made the house payment higher and the need to use the cards greater.

If the terms of our cards didn't change with interest and limits, we would probably have kept on the same rat race trying to keep up with them. We should have filed back in 2005 but my husband refused. Eventually it becomes impossible to keep up with them and by giving your situation to the end of the summer to turn around, I just see the interest accumulating even more. I would probably try a debt counseling service or something. I don't see bankruptcy helping you out much. If you stop paying the cards, you will go to collections and that is where the deals are able to be made if they won't budge from the get go. Just be prepared when you start making those calls to have all of your cards closed. It has a domino effect.

Good luck wth things.

Thank you for telling me of your experience. It was a big help.
Unlike the others that gave great advice and opened my eyes you weren't dead set on me selling my house.

[Flamingo]

I don't understand why people are saying I am living beyond my means. That would mean I am not paying my bills. I am paying all my bills on time. And I have money left over to get the things I need. I am saving with my 401k's. If there is an emergency there are avenues for me that I can get the cash needed. If you read my original post before the other 87 posts made me out to not paying my bill and having to sell my house because all of a sudden thats the problem, even though before I ran up the cards it was fine. I stated I was getting to the point where I would be having trouble.

Thanks to our fine president (hope and change)he changed the credit card laws and they are going into affect soon. So all my cards went up to 29% interest which added a bunch to my monthly payments. Also he is looking to raise taxes which would probably affect me. Also if he lets the "fix" that was put into place for the AMT tax run out I am sunk. My accountant informed me that I would probably have to pay an estimated 6 to 7000 more in taxes because some of my deductions would not be allowed. That is what is worrying me.

This is why I state in my posting to you above that you are not yet out of denial (see my red highight above). You are living beyond your means because you could not afford what you wanted and purchased it on credit and now you have come to rely on that and have run up bills you just not now can afford to pay but state you can pay all your other bills. So you are living beyond your means. It's embarrassing to you and you are trying to be defensive about it and cover it in other ways. What you need to do is free up some cash if you want to avoid BK and that is by reducing your savings at the moment to pay off debt, or take on another job to make more cash to pay the debt. The debt is not going to go away unless you supply extra cash to pay the debt, sell assets to pay off the debt or file bankruptcy if you are actually eligible to file. You first need to figure out you do have a cash flow/living beyond your means problem and when you realize that, either see a financial counselor to help you get back on track or visit a few BK attorneys who will tell you like it is if you don't want to hear it from others who have been in your position and found it out. You will eventually see what I mean/am taking about. If you take some of the advice on here and open up your eyes as to what is being said to you, you can start taking the proper steps to get yourself back on track. First you need to cut up those cards which is a horrifying thought to you, I know...

[Backlyn]

In reading through all that has transpired from the initial posting. I am wondering why you are even going to file on a piddly $45K amount, if you have everything else covered and have avenues to get more cash. Cut up all cards after you attempt to get the rates reduced (good luck on that) and use whatever extra amount of cash you can come up with to make those CC payments.

I stopped paying my credit cards in August 2008 when I retained my lawyer. We were current on everything, just stupidly used up all savings and already used up all equity in the home trying to solve the CC situation in the first place. We just formally filed in October 2009. We were deemed a CH7 asset case because I used part of home equity loan to get the title to my SUV, another dumb move. What happened after I stopped paying the cards? Well for one we had actual money in our pockets for the first time in a while but unfortunately our income was affected with the economy. What transpired after that was the calls started. I told them we were pursuing ch7 and gave them my lawyers name and number. The calls kept up for well over a year, however, the notices then came with "Your balance is $20K but if you pay us $3K we'll call it even". The only problem with this is if you take the cash you are saving by not paying the cards and wait for the "deals" to roll in, they can slap you with a 1099. Because when they reduce what you owe them, they pass it off to you as income. We had the mentality that we would implode or something if we stopped paying our cards. I was actually shocked by the process that some places would be like "give us a call after you file and we can set you up with a new card"!!!!!

As you stated with the house you feel stuck there, have your jobs and family close. It may not be possible to move. I also understand about never owning a home again after you finally realize the American dream and are able to buy one. I have a $1100 mortgage, $555 a month is our primary with everything included taxes, insurances etc. I wish we never touched our home equity to pay down the cards. It just made the house payment higher and the need to use the cards greater.

If the terms of our cards didn't change with interest and limits, we would probably have kept on the same rat race trying to keep up with them. We should have filed back in 2005 but my husband refused. Eventually it becomes impossible to keep up with them and by giving your situation to the end of the summer to turn around, I just see the interest accumulating even more. I would probably try a debt counseling service or something. I don't see bankruptcy helping you out much. If you stop paying the cards, you will go to collections and that is where the deals are able to be made if they won't budge from the get go. Just be prepared when you start making those calls to have all of your cards closed. It has a domino effect.

Good luck wth things.

[lulabelle]

I really, really highly recommend that you get Dave Ramsey's "Total Money Makeover" book. I really think that his plan would work for your situation. If you suspended your 401K contributions, just for a short time, you could easily debt snowball and be debt free sooner than you may think. Also, if you have always paid your cards on time, give them a call - either tell them flat out you want your rate reduced (there is NO reason that someone with your income/debt/on-time payments should be paying 29% interest), or tell them you are having difficulty making the payments and some will be willing to set you up on a plan. Chase did that for me - they closed the account and reduced my rate to 2% without any negative impact on my credit score. I'm guessing they would be especially eager to work with you if you mention that you are trying to avoid bankruptcy. You really can make this work with a little bit of sacrifice!

Unfortunately, you did get taken on your life insurance policies. My husband is in his 40's and for a $750,000, 20 year term plan he was quoted $54/month by a company it sounds like I can't name on here.

I'm sorry that you've felt picked on here. It's just apparent that you haven't hit rock bottom yet. Once you do, you will be willing to take the hard look at things. Denial is a fabulous thing - I've lived it for many years myself.

So, cut up your cards - you have to stop using them completely. Pick up Dave's book. Sit down and make a really good budget. Work on your debt snowball. You can get out of debt!

[LSUTiger32]

I don't understand why people are saying I am living beyond my means. That would mean I am not paying my bills. I am paying all my bills on time. And I have money left over to get the things I need. I am saving with my 401k's. If there is an emergency there are avenues for me that I can get the cash needed. If you read my original post before the other 87 posts made me out to not paying my bill and having to sell my house because all of a sudden thats the problem, even though before I ran up the cards it was fine. I stated I was getting to the point where I would be having trouble.

Thanks to our fine president (hope and change)he changed the credit card laws and they are going into affect soon. So all my cards went up to 29% interest which added a bunch to my monthly payments. Also he is looking to raise taxes which would probably affect me. Also if he lets the "fix" that was put into place for the AMT tax run out I am sunk. My accountant informed me that I would probably have to pay an estimated 6 to 7000 more in taxes because some of my deductions would not be allowed. That is what is worrying me.

So why are you here? You have it all under control. Sorry about the 29% interest, that's the risk you take when you play with credit cards we all experienced that. While I am no fan of our president, it's been going on long before he became president. Almost everyone on this board was rate jacked and limit crushed at some point.

I am not sure what you want us to say? If you want to file BK to dump your credit cards, go ahead. No one said you WERE NOT paying your bills, you need to read again because I didn't see that said by anyone.

I am worn out, no idea what else to say. Good luck to you, I sincerely hope you get it figured out. In case you didn't notice those 87 posts were TRYING TO HELP. People are wasting their valuable time to try to HELP you. Try not to lose sight of that. No one here is hoping for your demise.

[rusty95]

I understand that, but those deductions should be looked at. They are incredibly high considering you already said your exemptions are crazy high so your taxes shouldn't be. Supsend new 401K contributions (just temporarily) while you repay the loan. You need CASH. You also said you are spending $208 a month on life insurance. So why are you buying it from work and from elsewhere?



Great analogy. Funny how you only seem to want the advice that you want to hear.



I don't really care what you do, once again though don't come here telling people how you can't get above water and then tell us about your yearly vacations. Are people supposed to feel sorry for you and your yearly trips?



Think what you want. It's actually beyond insane, I just couldn't think of a better word.



Finally, one thing we won't disagree on. You should have term life. Unless you are a vegetable though, even at 45 you are getting ripped a new one. I am not allowed to give the web site because of advertising rules but the company I used I plugged in 45 yo in good health, non-smoker in NY and got $48 a month for half a mil. Your wife would be even cheaper.



Cause #2 happens. Regardless, you only read what you want. Keep the house, I am cool with that. The rest of your life will be miserable because you WILL be house poor and unless you cut out cable, cell, car payments, etc. you will barely make it. If that is a sacrifice you are willing to make I totally understand. You already proved that you cannot make the house payment AND survive without racking up huge debt. Remember once you file (and they will likely send you into a 13) you can't file again for a LONG time. You better have it figured out because if you don't you will get that leg cut off. I have personally just been down this road you are on and you WILL have to make changes or else. Life sucks, get a helmet.

Again though, if you only want to hear what you want to hear then you came to the wrong place.

The term insurance is 20 year, I don't know how many years you put in for. I am 51 now so a change is out of the question.

[rusty95]

I don't understand why people are saying I am living beyond my means. That would mean I am not paying my bills. I am paying all my bills on time. And I have money left over to get the things I need. I am saving with my 401k's. If there is an emergency there are avenues for me that I can get the cash needed. If you read my original post before the other 87 posts made me out to not paying my bill and having to sell my house because all of a sudden thats the problem, even though before I ran up the cards it was fine. I stated I was getting to the point where I would be having trouble.

Thanks to our fine president (hope and change)he changed the credit card laws and they are going into affect soon. So all my cards went up to 29% interest which added a bunch to my monthly payments. Also he is looking to raise taxes which would probably affect me. Also if he lets the "fix" that was put into place for the AMT tax run out I am sunk. My accountant informed me that I would probably have to pay an estimated 6 to 7000 more in taxes because some of my deductions would not be allowed. That is what is worrying me.

[LSUTiger32]

#1- Taxes, 401k, 401k loans, medical ins, life ins, plus all the other misc deductions. I average 800 to 1000 a week in deductions. My wife fills in the rest.

I understand that, but those deductions should be looked at. They are incredibly high considering you already said your exemptions are crazy high so your taxes shouldn't be. Supsend new 401K contributions (just temporarily) while you repay the loan. You need CASH. You also said you are spending $208 a month on life insurance. So why are you buying it from work and from elsewhere?

#2 The house stays, The house stays the mortgage no matter what you think is not the problem, The cards are. If you have lung cancer are you going to cut your leg off.

Great analogy. Funny how you only seem to want the advice that you want to hear.

#3 Vacations..yes. We scrounge the money up for them. Like I said before, you ask a question and I will answer it to the best I can. You may not like the answer.

I don't really care what you do, once again though don't come here telling people how you can't get above water and then tell us about your yearly vacations. Are people supposed to feel sorry for you and your yearly trips?

#4 I don't think it is insane, we had plenty of cash before we got into trouble with the cards.

Think what you want. It's actually beyond insane, I just couldn't think of a better word.

#5 Yes 208 for insurance. Term insurance. 500,000 each. i got it when I was 45, thats why it is more. 500,000 to cover the mortgage. We don't want the other to be homeless if one dies. One less worry.

Finally, one thing we won't disagree on. You should have term life. Unless you are a vegetable though, even at 45 you are getting ripped a new one. I am not allowed to give the web site because of advertising rules but the company I used I plugged in 45 yo in good health, non-smoker in NY and got $48 a month for half a mil. Your wife would be even cheaper.

How can I lose my house. I pay the mortgage before everything else.

Cause #2 happens. Keep the house, I am cool with that. The rest of your life will be miserable because you WILL be house poor and unless you cut out cable, cell, car payments, etc. you will barely make it. If that is a sacrifice you are willing to make I totally understand. You already proved that you cannot make the house payment AND survive without racking up huge debt. Remember once you file (and they will likely send you into a 13) you can't file again for a LONG time. You better have it figured out because if you don't you will get that leg cut off. I have personally just been down this road you are on and you WILL have to make changes or else. Life sucks, get a helmet.

Again though, if you only want to hear what you want to hear then you came to the wrong place.

[BobMango]

rusty,

I understand where you are coming from and admire your desire to keep things as they are for your daughter. Most of the folks on these boards are very helpful and some have a bit of smart aleck in them, but this is one of the few places on the web where you'll get great advice with little judgment.

As to the debate about whether your house is the problem or not, it's really a question of perspective. You say it's not a problem because you were fine before you ran up the credit cards. This begs the question of why you ran up the credit cards. I find it a little hard to believe that if your credit card debt were wiped out you would really be fine. Devoting so much of your income to your house makes it difficult to take care of the other things.

You seem unwilling to consider some of the advice given to you and just want bankruptcy to wipe out your credit card debt and leave everything else untouched. Sorry, but that is not possible. Additionally, you indicate paying about $800 a month toward retirement accounts, and getting killed by $1,300 in credit card payments. If you stop paying the $800 and apply that toward your credit cards you might be able to make some progress getting those paid off. Scraping up another $500 a month at your income level should not be that difficult. When I made $150k a year, I had lots of "necessities" that I no longer seem to need. Get rid of your car payment and buy a reliable $1500 car. Your friends may not be impressed but so what?

So what happens if you don't file? You can try to negotiate with your creditors. Some will be willing to work with you, some may not. Those that won't work with you will look to garnish your wages or seize accounts or other assets. You will have a tough time preventing these actions without the protection of bankruptcy. Once this cycle starts you will then have a tough time making the mortgage payments, and eventually face foreclosure or a short sale or selling at break even. This approach will take years and you'll be under extreme stress for the duration.

Good luck to you in whatever path you choose. Be sure to keep us updated. I would love to hear from you in a year or two indicating that you were able to keep it together without filing bankruptcy.

Last piece of advice is one I gave you in post #2 or 3, go see an attorney or three. Then you can come back here and tell us all either that we're full of it, or that maybe the experience and advice you got here was actually on the right track.

[Flamingo]

It is getting harder and harder. We have gotten over our heads with charge cards. All of our interest rates have gone up to 29%. And has increased our monthly payments to the point it is hard to pay the cards anymore. We make good salaries, but we have a big mortgage and high taxes where we live. My wife has to declare 9 dependents during the year to bring home enough to pay the bills, I have to declare 3. At the end of the years we get almost no return back. We just did our taxes and this year we owed federal tax. Our accountant told us that next year we will owe again if we don't lower our dependents during the year. We have no savings top speak of.
We owe aprroximatly 45,000 to cards. Anmd I don't know how it got away from us.
We bring home $8800 a month and our monthly bills come in at $7300 that dosen't include car insurance, water bill and others that come in every 4 months. That leaves us very little for living. We usually have about $250 a week and that goes for food and gas to get to work. We have taken out loans from our 401k's to help pay down some cards but that really dosen't help much. We pay the bills on time to try to keep our credit good.

Well you get the picture. I am sure most of you have been in my shoes. What are my options with bankruptcy?

Just briefly going through this thread and seeing some excellent advice given to you, the problem is, and reality bites hard unless you are able to totally get out of denial, that you are just living beyond your means and now it is catching up with you. We too had high income, my hubby traveled the world with his job and we went crazy with the extra money, extra credit that came with the extra money and just did not save enough. With a merger came the layoff of his entire department and we were not able to recover after a 70% loss of our income, big bills to pay and unable to recover for a period of one year. We then had to bite the bullet, were up against the wall and borrowing from Peter to pay Paul witih the banks eventually catching on and upping interest rates to sky high rates. However, you still have the income and not the job loss but have now put yourself in a place from which you cannot recover unless you have some relief and you can betcha it will be a Chapter 13 if you want to keep your house.

In order to avoid bankruptcy, you would probably have to sell your house and alot of your assets to pay your debts and you would have to move to a lower rent district/relocate because this is not going to go away easy for you. You are facing it straight on and unless you hit the lottery, have a rich relative die leaving you a lot of money or someone knocks on your front door with a check for several thousand dollars, you've got a mess and you know it.

Speak witih several BK attornies and realize you have faced reality. However, I donnot yet think you are out of denial but it will come. Best of luck to you...