Here's my story...need advice...

[sassiebaz]

I need advice. Im in over my head! Here's the deal....we filed Bk and discharged in 2003. We got back on track, had another baby (#3) and my husband's income was increasing every year. I couldn't seem to say no the credit card offers, and for several years we were keeping up with things pretty well. My fico was around 680. Not great, but good. Then, my husband was let go in June of this year. Mind you, Ive been a stay at home mom, hoping to pursue nursing school. Finally, after 6 or so months he has landed a position much like the last although making considerably less. I have taken a low paying, fullt time job and put the little on in daycare. Now we are in debt up to our eyeballs, most of which we are months behind on. I have talked to our car loan company to make arrangements and look at a refi. WE owe 2 payday loans. All in all including our cars we are about $60K in debt. The only we can afford to keep paying is maybe 2 credit cards and our vehicles. What do we do? Credit counseling says we cannot afford to do a debt repayment. I think CH13 is out of the question....how long before the creditors garnish our wages? How can we possibly pay this debt off?

[Flamingo]

Didn't you make this same posting in this same forum yesterday and receive some great responses?

[sassiebaz]

I posted this one first and got no response so, I then posted it in CH7 I think....you don't have to respond if you don't want....

[treehugger1]

I hate to break the bad news to you, but you need to look at the worst-case-scenario. While it might appear that such a scenario as BK 13 is bad, it might force you to take a good hard look at your living standards. In most states trustees are going to give you what is "fair" to survive. Assume that everyone can come at you. Assume you will see a 25% garnishment of wages. What do things look like after a 25% garnishment? Only you and your significant other know this.

How long for wage garnishment? This depends upon your state, but in many states you only have 14-20 days to respond to a small claims summons, and 20-30 days to respond to a circuit (above small claims) summons. Creditors/CA's can get a default judgment within 24 hours of your failure to respond. They can then get a writ of garnishment served on an employer within 24 - 48 hours of your failue to respond. Responding (answering) to a summons can cost you money. It is not my intention to frighten you, but it is my intention to get you to think about the worst-case-scenario.

How many credit cards do you have? Paying on two of them and not paying on the others could certainly incite a proactive stance from additional creditors.

Only you can choose from your choices. While you might think a BK 13 is out-of-the question, what does a 25% wage garnishment looked like compared to a BK 13? It could very well be the case that the only thing you have control over is your choices. Choose wisely.

[sassiebaz]

I hate to break the bad news to you, but you need to look at the worst-case-scenario. While it might appear that such a scenario as BK 13 is bad, it might force you to take a good hard look at your living standards. In most states trustees are going to give you what is "fair" to survive. Assume that everyone can come at you. Assume you will see a 25% garnishment of wages. What do things look like after a 25% garnishment? Only you and your significant other know this.

How long for wage garnishment? This depends upon your state, but in many states you only have 14-20 days to respond to a small claims summons, and 20-30 days to respond to a circuit (above small claims) summons. Creditors/CA's can get a default judgment within 24 hours of your failure to respond. They can then get a writ of garnishment served on an employer within 24 - 48 hours of your failue to respond. Responding (answering) to a summons can cost you money. It is not my intention to frighten you, but it is my intention to get you to think about the worst-case-scenario.

How many credit cards do you have? Paying on two of them and not paying on the others could certainly incite a proactive stance from additional creditors.

Only you can choose from your choices. While you might think a BK 13 is out-of-the question, what does a 25% wage garnishment looked like compared to a BK 13? It could very well be the case that the only thing you have control over is your choices. Choose wisely.

Thank you! I appreciate your response. Looks like we are going to set up a counseling appt. with Consumer Credit Counseling and see if we can get all of our credit cards on one payment plan. Then is we can afford to start paying one card in full at a time, our payments would go down. I have talked to our car loan people and they are writing up a refi plan. I don't quite know what all that entails but I will see what they come back with. I have called all of my creditors and my husband has begun to call his. We are hoping to get back in a good standing although our accounts will be closed. That's alright though. If worse comes to worse, if our only option is CH13 then we will cross that bridge when we get there......

[CompTweaker]

BB is right. And make sure that when it comes to making monthly payments, all unsecured loans (credit card, payday loans) are the least of your concern.

Look up the BK means test for your state and check the statutes of bk/judgement exemptions, your state's wage garnishment laws, and consider how important your credit score is to you. If you're like me and dont care, then start only paying bills you MUST pay. Forget about your credit score and deal with collections as they come to you. And dont talk to them at all when they start. Change your phone number if you have to. And debt validate request everything they mail you.

If you have already considered the above and still want to file ch. 13, then do what is best for you and your family. Good luck.

[allavdj]

I'm going to chime in with BB and Comp, think hard before you start flushing money away with credit counseling. Like BB said, nothing the counselors do is binding, you are still wracking up interest, the creditors can change things, hell, they can even decide they don't want to mess with you anymore and send it to collections. Most auto financiers won't negotiate with credit counselors and they most certainly aren't going to lower the principle.

CH13 gives you and the trustee control over a situation that is currently -totally- out of your control. The trustee not only can change your terms/payments/interest/principles, he/she will change them to whatever they think is equitable and feasible for you to pay off over a given period of time and the creditors really can't do anything about it. AND...while in CH13, you won't be called, harassed, hounded, or otherwise annoyed by anybody regarding your debt.

[sassiebaz]

Im so confused! If we even consider CH13 that means we'll have multiple BK's on file. also, my husband is more concerned about being turned down for jobs int he future....he is adamant against it. Also, isn't it for people that make alot of money? I guess maybe meeting with a lawyer may be beneficial....even if my husband will atleast hear what they have to say.....ugh! This is frustrating. I had no idea that CCC wasn't a binding thing.....