When to Choose Chapter 7 or 13

[clunk]

My question involves bankruptcy in the state of: Washington
So heres the breakdown:
Unsecured debt 45k
Cars(3) 22 K
First mortgage 177k
Second mortgage (HELOC) 34K
Grand Total $278K
Current Home value 135k

So as it stands now we are 145k upside down between the house and the unsecured debt. Between my wife and I we make slightly too much to pass the means test, but one suggestion that was made was for my wife to quit working. We both commute 2 plus hours a day each and if we are lucky we might see the kids for an hour a day, in addition to this we are not looking to keep the house. Most likely we would reaffirm on the cars but as for the rest we are looking for a fresh start. We are currently getting by but we are just one bad week away from our downfall. Im looking for any insight and/or past experiences that would help paint the picture of what to expect, dos and donts ect.

[keepmine]

You choose the chapter of bk that you qualify for.
The means test is just part 1. You still have to fill out schedules I and J to determine if you have enough disposable income to fund a chapter 13.
Have you consulted with a bk lawyer? Do you know how much dispsoable income you have?

[clunk]

This suggestion was made by the attny during the initial consultation. We are dropping off the final documentation so we can get a for sure, the lawyer hasnt made a big secret about his dislike for 13's and how the local trustee manages them.

[kornellred]

A debtor does not choose which Chapter to file under. It is Chapter 13 unless you actually qualify for filing under Chapter 7. There are rare cases where a debtor who qualifies for Chapter 7 can opt for Chapter 13, but that only makes sense if there are assets that need protection.

[clunk]

while appreciate your response.....Reread the first posting in which, i put out there that with both my wife and I working we fall just on the other side of passing the means test thus putting us into a 13. But the option is there for her to reduce her hours/ income and stay home with our children, which would then allow us to do the 7. That being said our attny has expressed a disinterest in doing a 13's due continuous adjustments ,oversight and not being able to start moving on for 5 years. Since our home is $80k underwater and requires 2 hours of commuting a day we are planning on washing our hands of it, the only assets we would save would be our cars.

[TheBajan]

Clunk,
Welcome to the forum... I just want to rephrase what I think you are saying so I know I'm on the same page with you.
Right now, you are over medium and have to file a 13. The attorney you have spoken to dislikes 13's in general and has suggested that your wife possibly quit her job and that may qualify you for a seven. You are upside down on your mortgage but you plan to walk away from it anyway. This is the gist of what I think you are saying.

My thoughts (only worth about two cents)....
First and foremost... SET UP FREE CONSULTATIONS with at least 3 or 4 more attorneys. You will be surprised at what you will learn from different attys.
Second... read as much of the stickies and posts here that you can. Be sure you really understand what you are giving up when you make your decision. You haven't given a lot of information about why you are walking away from your house but if you go into a 13, your second mortgage can be stripped away and by the time you are done you would probably have equity in your home instead of being upside down.
Third.... you can keep the cars without re-affirming the loans. Read the stickies here about the pro's and con's of re-affirmation agreements.

If you still don't want to try and keep the house and you don't have any real assets for the trustee to sell, you could look hard at the pro's and con's of your wife leaving her job to put you in a 7 instead of a 13. It would mean waiting for at least six months to file after she has quit receiving a paycheck.

Hope that helps.
The Bajan

[TheBajan]

A debtor does not choose which Chapter to file under. It is Chapter 13 unless you actually qualify for filing under Chapter 7. There are rare cases where a debtor who qualifies for Chapter 7 can opt for Chapter 13, but that only makes sense if there are assets that need protection.

Kornellred,

That was our case. We qualified for a 7 but went with a 13 to protect assets and strip our second on the house. We are in a 3 year repayment plan. It's been smooth so far and we were blessed to find an excellent, experienced atty.

[AngelinaCatHub]

I second TjeBeJan's advice but to add my own to hers. Have the wife quit her job. Seeing your child in an average of an hour a day is child abuse in my opinion. (Don't take that as directed at you or the wife personally, as the child is missing an important part of his/her life). I understand you have had no choice in your circumstances but a "NEW START" starts immediately and at home with your FAMILY. You both married to have a family, no? But if so, make it happen. Clean house so to speak and get a lower life style and by all means move closer to the single job you will maintain since you will have to move anyway. Give the child what is most needed in the formative years he/she is in. Things mean nothing and rust and break but your love can be broken too. Don't let this happen and don't let strangers and public schools raise your children. Don't misunderstand my meanings. I believe you will do the right thing. 'Hub

[TheBajan]

Clean house so to speak and get a lower life style and by all means move closer to the single job you will maintain since you will have to move anyway. Give the child what is most needed in the formative years he/she is in. Things mean nothing and rust and break but your love can be broken too. Don't let this happen and don't let strangers and public schools raise your children. Don't misunderstand my meanings. I believe you will do the right thing. 'Hub

This advice coming from someone who has been on the other side is absolutely priceless and all too true. Thank you Hub. Let me say again that I appreciate you.
The Bajan

[AngelinaCatHub]

This advice coming from someone who has been on the other side is absolutely priceless and all too true. Thank you Hub. Let me say again that I appreciate you.
The Bajan

Thank you for those very kind words. It is true we had money to burn. Our ignorance cost me all of that wealth but yet it GAVE ME sooo very much more. Those I could help with a hundred dollar bill, are still needy and that has not changed, yet it is free to post my mistakes and perhaps help thousands who look here. Our change in values are priceless and we believe it or not, would not change a thing that brought us to becoming a "normal" person/s. We are so much happier broke than wealthy. AS, we are far wealthier now than before. Matt 6:9-21 'Hub

[basketsbears]

Thank you for those very kind words. It is true we had money to burn. Our ignorance cost me all of that wealth but yet it GAVE ME sooo very much more. Those I could help with a hundred dollar bill, are still needy and that has not changed, yet it is free to post my mistakes and perhaps help thousands who look here. Our change in values are priceless and we believe it or not, would not change a thing that brought us to becoming a "normal" person/s. We are so much happier broke than wealthy. AS, we are far wealthier now than before. Matt 6:9-21 'Hub

Hub - as TheBajan said, you and your wife's support and the experiences you both share with us are invaluable. Thanks so very, very much.

Lynn

[lillymarlene]

A debtor does not choose which Chapter to file under. It is Chapter 13 unless you actually qualify for filing under Chapter 7. There are rare cases where a debtor who qualifies for Chapter 7 can opt for Chapter 13, but that only makes sense if there are assets that need protection.

One of my "free consults" was dead set against Chapter 13's. However, I couldn't see myself paying out $500 a month to keep my paid for car, or having to give up what's left of my small business. I was lucky too, and was able to find an excellent attorney who was able to help me with my 4 year Chapter 13.

[clunk]

Thanks everyone. We really do like where we live but being at least an hour away from our employers do impact the kids. Honestly we should have file BK before my wife went back to work but at that point we were just trying to get by. Walking away from the house will allow us to move closer to a larger town, where if she decides to go back to work she could. The attny has told us we need at least 3 months of no income for her for this all to pan out, but she is stressing that the question will be asked as to why she's not working anymore and then that will null our filing. Also thanks for the tips on reaffirming, I will do some more research.

[pamkev]

Hub has given great advice.

You can answer the questions if they ask why you wife is no working anymore very truthfully. She is with our children who needed one of us to be home. I don't think they can void your filing for that if I'm wrong so one here will let you know

Pam

[AngelinaCatHub]

Hub has given great advice.

You can answer the questions if they ask why you wife is no working anymore very truthfully. She is with our children who needed one of us to be home. I don't think they can void your filing for that if I'm wrong so one here will let you know

Pam

You are not wrong. The whole bk is not that important. The child/children are as well as the marriage. It is a known fact that infidelity is not the primary reason of divorce. It is struggle over money (things I may say).

The best "new start" these folks could make is Mom quits, or puts on hold, her working time and put that time to better use. Her child/children at the important part of their life. True success is being able to see in later life, a successful child rather having to visit one on weekends in incarceration. Mrs. and I when we had some money aided several convicts who had no home. Mrs. worked for the D.O.C. in FL. We are pleased to say, three of four are good, one went back and one is our god-daughter whom we love and has become very successful. By my childhood marriage (first wife), I insisted that she would not work and become a MOTHER. I have two adult successes one becoming a very good RN and the other raised her son and home schooled.

The most important thing here is the family. Not the bankruptcy. That is just a bump in the road. It has come, and it will go. Let that not come to the family. I wish the best for our OP. 'Hub