Question My situation

[BKinIowa]

Hello everyone,
I have been looking for a couple of months and thought that I would see what everyone had to say about my situation. Here is the breakdown.

House - Purchased for $165,000 in 2007, 30 yr interest only payment = $1300
Credit Cards (9 cards mostly chase) - $81,000 with total payments of $3100
Car - owe $19,000 and only worth about $14,000 payment is $350
LOC - Personal line of credits $10,000 minimum payment of $200 total
Student Loans - $25,000 payment totals $325. (I know it is not dischargeable)

Income - single income (family of 4) of under $60,000. I usually get around $3000 back from taxes and a bonus of $6000 in March. I am in Grad school and my employer has been reimbursing me the tuition costs. This year it has been about $15,000.

The credit card use has been due to me helping out a family member with a business. The business has been paying the majority of the monthly payments but now it can no longer pay that and therefore putting me in this situation. I have had recent activity on several of the cards for the simple fact that I did not know that this was coming down the road. This month will be the first late payment that I will have and then the snowball effect will take place.

My questions are, is chapter 7 the road for me?

Does the fact that I "gave" some of this money to a business going to make things more difficult, or do I just not mention where it went?

House, i am current, but can I let the house go back as well?

Car - Do not want it and will let it go back.

How long should I wait? I do not want to drag this out, but i am guessing that I will have to go 3+ months before I can file.

Thanks!

BKinIowa

[JRScott]

You need to wait at least 6 months from the last credit card activity. In addition if the ones used for business are large purchases it might be better to wait for a full year.

You can surrender a home in a Chapter 7, however some jurisdictions do not allow you to use a house payment or car payment that you are surrendering on your schedules.

How many more years of IO payment options do you have?

How much do you actually make? (Less than 60k is not a good enough estimate to figure out how affordable the home is).

Is your home/car loan at the same bank/banks as your credit cards?

Stop giving the government free use of your money. Go into your human resources office and ask to adjust the withholding on your wages. Ideally you should get as little back in a 'refund' as possible. Otherwise you are letting the government borrow the money from you and pay you back with no interest which means your losing money with inflation.

Hmm now Tuition reimbursement, you need to ask a lawyer and make sure they don't count that as income, I"m not sure they do but they might.

[keepmine]

In addition to JR's response, if you file prior to getting and spending that bonus and tax refund {or putting them in exempt assets}, you will lose them unless, your lawyer can find a way to exempt them.

[woeisme]

What is the median income for a family of 4 in your state? That will be very important to determining whether or not you can file CH 7 or if you will have to file CH 13. It is possible to be over the median and still file CH 7, but a much more difficult procedure. Have you set up any consultations with lawyers? Most will do an initial consult for free (although will press you for a retainer that day) so you can get some advice with a lawyer experienced with the local trustee. Trustees vary so much from district to district that it is really important to know what your local one allows and does not allow. The experience one person has on this site could be totally different than another's (and yours) just because of the different ways the trustees interpret the law. Good luck!

[BKinIowa]

Thanks for the replies. $57,000 is what my salary is and $69,500 is the median income for a family of 4 in Iowa. We have 19 years more of IO on the house. At first I wanted to keep the house, but the more I think about it, I do not like the situation that I am in and it will not be getting any better. The car loan is from the manufacture and the Home Loan is from Wells Fargo, which is were the 2 LOC are also.

The last big (over $1000) transaction was last month. It was for $2600 on a convenience check. We bought new kitchen appliances in early July on the CC. The rest of the transactions have been clothes, Target, Walmart, that sort of thing. I did have some auto repairs done that was $1100.

I have not talked to a lawyer yet, but as things are progressing, that is where I plan to go next.

Thanks!

[NowImDownInIt]

I think that you will most likely have to wait at least 6 months for the activity on the CC's to fall off. STOP using them now.

[fltoo]

You might have a fraudulent transfer problem here, also, with a 2 year look back.

I had the same situation with giving money to help someone and have to wait 2 years if I file. There are at least two other posters here with same problem.

Check with attorney on it.

[BKinIowa]

So do you think 6 months is long enough? I have never heard of waiting 2 years. That just can not be done IMO.

Thanks!