Scared....freaking out

[iluvchicago]

Ok...so I have never declared bankruptcy before and I am scared. I am happily married with 2 children. I was out of a job for quite some time, then I got a job and got cancer. I am employed again after taking months off. What a mess. Anyway, we own a home, lease a car (just leased it last week), our credit is good, FICO of 730 but we are very close to hitting the wall. We owe over 140k on 3 credit cards. This debt was incurred over the last 5 years. I have been researching chapter 13 and if I understand it correctly, it appears as if we may be able to keep our home and 401k, and possibly our leased car (we only have one car). Both kids are in private school because of special needs.

Any of you in similiar situations like this and can you give me the 411 on this?

[mariamznm]

[reply deleted by moderator at member request]

[oldrocker]

First off welcome to the forum. We all are or have been in "similar" situations.

As far as your house is concerned, how much equity do you have in it and what are your state's exemption covering it. The leased car is a non issue, no value. Your 401k is safe, you do not have to pay an equal amount into your plan.

To get any advice you'll need to provide a bit more information; income, monthly expenses and so on. The more detail you provide the better advice you'll get.

Of course the best thing to do at this point is to start seeing lawyers and get their opinions on you particular situation.

[keepmine]

Any reason you can't file a Chapter 7?

[Flamingo]

Ok...so I have never declared bankruptcy before and I am scared. I am happily married with 2 children. I was out of a job for quite some time, then I got a job and got cancer. I am employed again after taking months off. What a mess. Anyway, we own a home, lease a car (just leased it last week), our credit is good, FICO of 730 but we are very close to hitting the wall. We owe over 140k on 3 credit cards. This debt was incurred over the last 5 years. I have been researching chapter 13 and if I understand it correctly, it appears as if we may be able to keep our home and 401k, and possibly our leased car (we only have one car). Both kids are in private school because of special needs.

Any of you in similiar situations like this and can you give me the 411 on this?

A job loss can certainly throw the train off the track...and I am so sorry you got hit with the double whammy of cancer. How awful! However you sound like you are a fighter, are doing well and want to get things cleaned up and are back to work. First, there is no reason to be scared. The first thing you need to find out is if you can file and if so, what Chapter, depending upon many varoius factors - the state in which you reside and its exemptions, your household income, home equity, debts, other assets, etc. The easiest and best thing for you to do is to make a few consultation appointments with a BK attorney and take with you to the appointment(s) a complete listing of all your debts, monthly payments, paystubs, sources of income, asset listing and your most recent tax returns. The attorney will advise you, after reviewing all that information, if you can file and what chapter. Your 401(k) is exempt. Do not touch it to borrow money to pay bills.

A major job loss (six figures) due to a merger led to our eventual filing. We managed to float along for a year using savings and robbing Peter to pay Paul until we realized there was no other option and my husband could not obtain a decent paying job during that period of time. We too were scared, embarrassed and felt like someone pulled the rug out from under us. It can happen to anyone but when you have high debt when it occurs, it can spiral one to filing BK when you can't pay those bills due to the loss of income.

Best of luck to you!