Having trouble keeping our heads above water.

[rusty95]

We make 181,000 a year that comes out to 29%

[Klesko]

Even if you use gross and your in the 30% tax bracket then your income is $11,440 and your payment is $4,900 which comes out to 43% of your income. That is still too much.

I do understand about the private school. I pay $8,000 a year for my daughter to go to one.

Your problem is you have no savings and cannot pay off your debts. If you hit any small bump in the road you are going to be forced into BK13 and that will be much worse long term then what I have recommended. Get this idea out of your head that your house is sacred and cannot be touched. Once you do that things will be much easier.

You need to rebuild and regroup and there are two ways you can do this with the information you have given us. Move into a cheaper house or make more money.

It is really that simple.

[rusty95]

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. Now if I sold my house, I will not get anything for myself out of it. That pretty well means that I will never own a house again. Because I will never be able to put together 200,000 for a down payment. That pretty well means that after making 20 years of rent payments I have nothing, where as after 20 years of paying a mortgage I have the house to sell. Now I realize that most of you posting here live in southern states and other places outside of the tri state area. I have friends that live in your areas and they can get a house for 200,000 that will put my house to shame. Plus you get very low property taxes. Mine are over 11,000 a year. That is probably a third of some of your salaries for the year. So unless you have experience in my area you don't know about how much it ACTUALLY costs to live here. Now about the 52% of my salary, the mortgage companies go by gross income. So if you look at it in the respect the house is less than 29% or right on target for this size of a mortgage. Unfortunatly the house stays.

Now one of you said to move to a different area and put my daughter in a private school, do you know what a private school costs, between 8 and 10 grand a year. Yes you heard it right. A good top of the line school costs that much. And her education will be no better than the one that she is getting now. So lets see 3500 for rent and then another 900 a month for a private school that comes out to 4400. It seems I am paying less now. Like I said before my daughter education is very important to me.

[lulabelle]

I know that some of these things are really hard to hear. If someone told me that I absolutely had to move out of my home, I would feel pretty defensive and panicked about it, too. We get very prideful when it comes to our homes, and I can imagine that you would feel very embarrassed/uncomfortable explaining your decision to move out of a very nice home to your friends & family. However, these people know of what they speak. And they are really trying to help you. The bankruptcy process is grueling, emotional and uncertain. It's also often embarrassing when you are suddenly cut off access to credit, unable to take out a new loan, buy a different car, or have an employer informed of your bankruptcy, such as can happen in a CH 13. Are you prepared for it? Do you have other assets that you may risk losing if you file?

Bottom line is that many of us here know what the bankruptcy process is like and wish we had just one big glaring red flashing light staring us in the face; we'd be thrilled to find an option other than bankruptcy.

Your house payment goes against every practical, reasonable personal financial practice out there. If you find the BK Forum members harsh, give Dave Ramsey a call and see what he tells you about it. I have a feeling that if you could step back a bit and consider looking into other options, make the tough decisions (and believe me, selling your too-expensive house and renting for awhile would be easier than bankruptcy in the long run) that even just a year from now you would look back and wonder why you even questioned making the choice.

If after reading everything here, you still decide that your house is most important, everyone here will still support you and answer any questions you may have. I would also strongly suggest going ahead and scheduling some consults with bankruptcy attorneys as they could best advise you and your particular situation. Best of luck to you!

[backtoschool]

Out of curiosity I pulled up New York State at the US Trustees site. New York County has a rent/ mortgage allowance of $4559 for a family of 5 or more.

The next highest counties in the state for allowances are Nassau, Rockland and Westchester which hover around the $2500 mark for a family of 5 or more.

Perhaps the OP is in New York County and his mortgage expense is dead on? Who knows.

Regardless, monthly income will go down once the withholding allowances are adjusted to reflect -0- owed to the IRS. Proactive: If I didn't read clearly enough the OPS many posts and deciphered it all wrong, then I apologize in advance :-)

The OP would have to live in Manhattan or the Scarsdale or a similar area to have an allowable monthly expense of $4,500 for the mortgage. If the OP lives on Long Island or further out in Weschester, then the mortgage amount is probably over the allowed amount.

[readytofile]

I absolutely agree. But it's pretty obvious that the OP is going to buck anything we say about his housing situation.

Hard to see the forest through the trees...yeah I see that. Shoot even if I did make tons of money I could never bring myself to pay 4k a month in mortgage. There are lots of nice places you can live that cost much less than that. I have trouble accepting that my mortgage is what it is. If I hadn't refinanced a million times I'd still be paying $700 a month for the same house.

[newbie2]

That may be the allowable amount but is that for someone making the same amount of money as this person? Or is the average salary more than that? Regardless of the allowable amount, they are still living well beyond their means for a mortgage.

I absolutely agree. But it's pretty obvious that the OP is going to buck anything we say about his housing situation.

[Klesko]

Even if you were to sale your house and break even you would be in good shape. Going from $4,900 a month payment to $3,500 a month is a huge difference.

The OP is stuck in the state alot of people are or were in that they think their house is somehow sacred and more important then anything. I dont see the need for the OP to do BK7 unless the house is worth much less then he is stating. If the OP could get something to rent for say $3,000 a month then he would have almost 2k a month to snowball this CC debt. 44k in cc debt is not alot if you can pay 2k a month.

Here is what I would do if I were the OP.

- Sale the house (Even if its only to break even)
- Rent something for less then 3k
- For 6 months put 2k into emergency savings
- For 24 months after that pay 2k a month in a snowball cc payoff plan.
- 12-24 months after that buy another house with a MAX payment of 35% of their income. Meaning something in the payment range of about $3,080 or about $400k with your property taxes being so high.

I made about $8500 a month when I file BK7. However I had $180k in CC debt and about $60k in other debts. My house was not under but I realized I would never recover unless I really made a clean slate so I let the house go. It wasnt easy trust me, but once you get other the idea that your house is sacred it all becomes much easier.

[readytofile]

Out of curiosity I pulled up New York State at the US Trustees site. New York County has a rent/ mortgage allowance of $4559 for a family of 5 or more.

The next highest counties in the state for allowances are Nassau, Rockland and Westchester which hover around the $2500 mark for a family of 5 or more.

Perhaps the OP is in New York County and his mortgage expense is dead on? Who knows.

Regardless, monthly income will go down once the withholding allowances are adjusted to reflect -0- owed to the IRS. Proactive: If I didn't read clearly enough the OPS many posts and deciphered it all wrong, then I apologize in advance :-)

That may be the allowable amount but is that for someone making the same amount of money as this person? Or is the average salary more than that? Regardless of the allowable amount, they are still living well beyond their means for a mortgage.

[newbie2]

Out of curiosity I pulled up New York State at the US Trustees site. New York County has a rent/ mortgage allowance of $4559 for a family of 5 or more.

The next highest counties in the state for allowances are Nassau, Rockland and Westchester which hover around the $2500 mark for a family of 5 or more.

Perhaps the OP is in New York County and his mortgage expense is dead on? Who knows.

Regardless, monthly income will go down once the withholding allowances are adjusted to reflect -0- owed to the IRS. Proactive: If I didn't read clearly enough the OPS many posts and deciphered it all wrong, then I apologize in advance :-)

[backtoschool]

Not true. You can be in a plan that pays off less than 100% of the debt. The cut off for it is $6,575 over 5 years which is about $110 per month.

I agree with OhioFiler. As to the OP, with $8800 a month and only a few legitimate dependents, and a mortgage payment that is higher than the regional norm for his/her area, I would assume the trustee will find $110 month or more to fund a chapter 13.

[readytofile]

Here's another one to check out http://www.homefair.com/articles/mor...ility.asp?cc=1

Just how well do these old guidelines apply to you in today's housing market?

• Housing should take about 25% of your gross pay or 35% of your take-home pay.
• When buying a home, look for something priced at 2.5 times your gross income.

So if you go by that, the max you should be paying in a mortgage for your take home pay is $3080. I know you don't want to see it, but it's right there in black and white. You're over expending yourself. This is what they call "House Poor". It's not your credit cards that are causing all of this.

[readytofile]

Can you please show me where I have equity in my home. I have tried to refinance in the last year and was turned down because I don't have enough equity. I have already tried that route. If I have 535000 in mortgage and the house could go for 575000, where is the equity.


And believe me the house is not the problem.

Do the math. We bring home about 8800 a month, my bills with mortgage and without the cards is about 6400. That would leave me with 2400. Now divide that by 4 (number of weeks in the month and you come out with 600 per week. That is more than enough money to live on and bank some. I have been doing it this way for 10 years.

The credit cards are the problem. Once they are paid off I will be fine.

And if I sound defensive I apologize. There are some posts on here that are making up stories about how I spend my cash. If you ask me a question I will answer it. Thank you for your help.

575000 minus 535000 equals 40000 in equity. Plain and simple. They don't care about your fees to sell the house. Actually you don't HAVE to go through an agent therefore those fees are optional.

[readytofile]

If your house is worth more than what you owe, depending on where you live, with chapter 7 they could possibly sell your house and take it from you anyhow. Here's some info http://thismatter.com/money/credit/b...-exemption.htm Check out the making home affordable plan that's out there now. Perhaps they can work with you. Just by taking what you've told us, the website says you may qualify for a loan modification. http://makinghomeaffordable.gov/modi...igibility.html

Either way, I agree with the others. You're living WAY outside of your means for a house. There are good schools in $1500/month mortgage areas too, I swear. My girls go to blue ribbon schools with 99% pass rates and my mortgage is $1400/month. It can be done.

[rusty95]

backtoschool, I think disposable income alone doesn't determines 7/13. If 150 a month for 5 yrs doesn't pay off the debt then doesn't that make a CH7 eligible? But I do agree with you and others, I can't see the trustee ignoring the equity of the home, the high mortgage payment.

Can you please show me where I have equity in my home. I have tried to refinance in the last year and was turned down because I don't have enough equity. I have already tried that route. If I have 535000 in mortgage and the house could go for 575000, where is the equity.


And believe me the house is not the problem.

Do the math. We bring home about 8800 a month, my bills with mortgage and without the cards is about 6400. That would leave me with 2400. Now divide that by 4 (number of weeks in the month and you come out with 600 per week. That is more than enough money to live on and bank some. I have been doing it this way for 10 years.

The credit cards are the problem. Once they are paid off I will be fine.

And if I sound defensive I apologize. There are some posts on here that are making up stories about how I spend my cash. If you ask me a question I will answer it. Thank you for your help.