Laid off, good time to file?

[Humonese]

I'm about $60k in debt, the wife and I have $100k total, unsecured, lines of credit and credit cards. Dug in deep from divorcing my first wife, losing big money on that house and giving her everything I owned and I just haven't recovered.

I've been avoiding a bankruptcy because I made $60k+ and didn't want to deal with the Ch. 13 payments, but I recently got laid off and am just getting unemployment (and paying child support on 2 awesome kids).

If I wait like 3 months and still don't have a job (which I expect will happen given the economy and my lousy region), can I file a Ch. 7 and get it done and over with? I don't plan on doing anything stupid in the meantime, but I will likely have to dip into a line of credit to pay all my credit card mins until that time.

Thoughts? Caveats?

She makes ok money so I think we can deal with the other $40k on her salary, so I'd want to go at this Ch. 7 alone.

2nd question, how does this affect the home (joint, of course) and 2 cars (both titled in both our names with minimal equity)? I'm in PA.

Thanks in advance. I've read a lot already on the site, but haven't run across this topic, so I apologize if I missed an FAQ.

[StartingOver08]

Your entire household income will be used for the past six months. So if you remain unemployeed for the next three months you can estimate your monthly "income" for the filing. You can file without your wife, but her income will be used along with yours. Try to fill out the means test yourself so you have an idea of where you are going. Go here:

http://www.usdoj.gov/ust/eo/bapcpa/meanstesting.htm

If you use a line of credit that will be an issue in the bankruptcy (cash advance). Do not use any cc or cash advances or balance transfers for at least 90 days prior to the filing date.

[AngelinaCatHub]

Your entire household income will be used for the past six months. So if you remain unemployeed for the next three months you can estimate your monthly "income" for the filing. You can file without your wife, but her income will be used along with yours. Try to fill out the means test yourself so you have an idea of where you are going. Go here:

http://www.usdoj.gov/ust/eo/bapcpa/meanstesting.htm

If you use a line of credit that will be an issue in the bankruptcy (cash advance). Do not use any cc or cash advances or balance transfers for at least 90 days prior to the filing date.

Startingover is correct and your wifes credit may be dinged as well. Warn her up front and make sure you can live without cash advances and PLEASE do not go after any retirement funds. They are excluded but if you use them, and bust a 401K or the likes, that is income used against you. You must look PO now so PO that you cannot afford the other O and R. POOR.

Remember, no credit, no raiding the future. Live off your wife, you'll make it up to her after your bk. 'Hub

[AngelinaCat]

And, if you raid a 401k or other Retirement plan, not only will you lose that exempt money, it will be counted as income AND you will incurr a heavy tax penalty.

[Humonese]

Good advice, thanks.

More questions to follow, need to digest this and some other stuff going on.

[domaingamer]

That's a good point about not busting any 401k's. I've been very tempted to do that to fund a business startup, but last thing I want to do is lose that if everything goes south.

[Humonese]

I have no plans to bust into my 401k, especially with the stock market as tanked as it is.

My bigger concern is that my wife and I may be separating, and I'm not sure how I can pay any of these bills on Unemployment. I don't want to lose the house or the car...or the utilities since the kids are in the house, so I'll keep paying my half of that, but that doesn't leave much for the credit cards. This is getting worse by the day.

[StartingOver08]

Well, if you are going to file then don't pay the credit cards. Pay the house and utilities and car payments that you are going to keep.

If you are filing then paying on the cards is pouring money into a black hole - you don't get rewarded for paying down a balance in the BK.

Are your cards joint or single?

[Humonese]

All the cards are single, so I guess that's good news for her.

[AngelinaCatHub]

If you are filing bk, in let's say three months, and you and your wife are seperating, are you divorcing? (silly question) In our state FL you have a no fault divorce you can do for less than 200.00. If it is amiable I would suggest the divorce and release her altogether as well as her income towards the bk. Then she won't be on the bk. Make sence? 'Hub

[Humonese]

I don't want a divorce but it seems to be heading that way.

Yes, that makes sense - thank you.

This is all very overwhelming.