Filing Chapter 7? When and if?

[Oldboy]

I have been lurking on the forum for some time. I'm hoping if I post with my circumstances I can get some advice.

I am 61, will be 62 in September. I lost my job in October 2007. My unemployment runs out in a month. My wife is 59, will be 60 in October. We do not own our home, we rent. Our vehicles are paid for. We now have $22,000 in unsecured credit card debt. We owe $1800 for 2007 taxes, due on April 15. I have $10K in an IRA. My wife is a public employee and has a decent pension plan. Our life insurance policies are all term policies.

My wife had a bankruptcy before we married, about 20 years ago. Although I am leaning toward filing BK, she want to avoid it, to the point that she thinks I should use my IRA to pay down the credit card bills.

Our 2007 income is over the CH7 median, but our projected 2008 will be under. My idea is to get through this year as best we can, with me starting social security at age 62 in September, and then file BK in 2009. I am only going to receive about $750 a month from SS, unfortunately.

Am I correct that my small IRA is not included in my asset reckoning? How about my wife's pension? I am struggling to find the answers, despite a lot of searching.

I will very much appreciate and insight and advice. I'm glad I found this forum. The walls are really closing in.

[jp2861]

You'd need to research the local BK rules and your state laws to determine what can and can't be touched. It differes from district to district. A quick trip to a BK lwayer for a free consult would answer most of your questions concerning exemptions.

I wouldn't touch your IRA to pay unsecure debts. At your age a BK is easier to deal with than replacing your savings. I would do it though to get the tax monkee off my back.

If you never plan on buying any big ticket items such as a house or an expensive car I would go the BK route. I guess the big question would be how important (or needed) is having a good credit rating for future needs.

[keepmine]

IRA's are exempt assets in a bk. Don't ya dare touch it!
IMO, unless you have a medical condition that prevents you from working, you're too young to retire. I'd keep looking for a job.
If you're filing alone, that long on UE should have your income below the median.
Talk with a couple of bk lawyers but, I'd think about pulling the trigger now.

[Oldboy]

IRA's are exempt assets in a bk. Don't ya dare touch it!
IMO, unless you have a medical condition that prevents you from working, you're too young to retire. I'd keep looking for a job.
If you're filing alone, that long on UE should have your income below the median.
Talk with a couple of bk lawyers but, I'd think about pulling the trigger now.

Can I file alone and discharge the credit card debts, even if my wife and I have everything jointly?

I am sending out resumes daily and interviewing several times a week, but nothing is happening.

It is very possible we will relocate to SEAsia in the future, probably Cambodia, maybe Laos. We have skillsets that should allow us to find work, and even a little income goes a long way over there. We can live well even on modest retirement payments, and with minimal savings, especially as we are willing to work.

I just don't want to keep sinking further under these credit card payments. I will happily go back to work and discharge my obligations like I have for my entire working life, but if nothing comes up, then I am thinking BK, early retirement, and a very modest existence in an inexpensive tropical country.

And, yes, we have been over there and know what to expect.

[danaf]

First, yeah - don't touch your IRA - it is protected and you will need that.

check out http://www.legalconsumer.com/ - too see what your state allows for exemptions.

Second - You say you have 2 vehicles paid for. You need to find out if they are covered under your state's exemptions otherwise, if they aren't (ie. they have equity in them) - the trustee could take them to pay off some of your creditors, or if he doesn't take them he could ask you to pay him the equity that is in them to pay off your creditors. That would suck. Depending on what you find out, it sounds like you have enough time to figure out what to do here. You can't transfer the titles to family to hide them - that is fraudulent. But you are within your rights to sell - and maybe buy a new car or lease as to where there is no equity. I'm not saying this is the best route to go - first find out what exemptions are allowed by your state....this will help you plan your course of action.

And if you do get another job - you can still file bk7 providing your combined income falls under your states median. http://www.usdoj.gov/ust/

[keepmine]

Let's back up. Are the cc's joint or, are they just in your name?

[Oldboy]

Let's back up. Are the cc's joint or, are they just in your name?

We have a joint AMEX, and we each have a Chase VISA in our own names. I'm pretty sure the VISAs came with additional cards in one another's names, but we never used them. All three cards have roughly $7500 on each.

[keepmine]

Any joint account, and the liability will fall to your wife.