Some Questions from newbie

[havefaith]

Hello!
We have a meeting with an attorney next week and I have a few questions that I'm hoping to get answered from folks that have gone through this..
I lost my job in early November, with my last full paycheck (paid once/month) paid the first week of Nov. I'll get a small check first week of Dec. My hubby has a full time job. Based on the info that I've read, I'm thinking that we may have to do Ch 13, not 7.
My questions.. I borrowed some money from my parents in the last couple of months to make ends meet ($6,000) without any kind of contract, but we need to pay it back. Is there a way to enter that into our expenses in the Ch 13 budget/plan?
I also have over the last few years used 2 CCs that are on my mom's name, but I have a card. The balances combined are over $10,000. I can't drag my mom into this, but would like to continue making some sort of payment to her every month to pay those off.
Third question.. the bank where our checking acct is also has one of our car loans (more owed than what's worth) and one credit card that I presume we'll have to include in the Ch 13. The car payment is almost $600 and we would ideally like to keep the car if we go the Ch 13 route. If the CC that we have through that bank is included in the bk, will the car be taken and the checking acct closed?
Any input that I can get from people would be very much appreciated!!!
After making the decision yesterday that we're going to go see a lawyer next week and try to make a fresh start, I slept through the night for the first time in months.. :-) havefaith

[lrprn]

Welcome, havefaith - glad you found us!

Based on the info that I've read, I'm thinking that we may have to do Ch 13, not 7.

Don't make assumptions at this point. Whether you can file Ch 7 or have to file Ch 13 depends on the total income made by the two of you in the last full calendar months before filing and if that amount is above or below the median income in your state. If the amount is below the median, then it's very likely you can file Ch 7.

However, even if the amount is above the median income you still may be able to file Ch 7. You need expert advice from an experienced bankruptcy lawyer looking over your financial figures and if you will show enough disposable income on the required Means Test and Schedules to be forced to file Ch 13.

I borrowed some money from my parents in the last couple of months to make ends meet ($6,000) without any kind of contract, but we need to pay it back. Is there a way to enter that into our expenses in the Ch 13 budget/plan?

If it turns out you do have to file Ch 13 (it's not the end of the world, trust me ) then this debt you owe your parents will be listed along with all the other debts you have when you file. Your parents will receive the same % of payback that all your other unsecured creditors will get.

I also have over the last few years used 2 CCs that are on my mom's name, but I have a card.

The key here is whether you are an authorized user or a co-owner. Authorized users have no financial ties to the debt, but co-owners do. Which one are you?

I can't drag my mom into this, but would like to continue making some sort of payment to her every month to pay those off.

If you are just an authorized user, then this debt can't be listed because legally it isn't yours. That means that there can be no official payment to your mom on the cc's through the Ch 13 plan. However, if you can scrimp and save up some extra after you establish an emergency fund, you can give any extra you have to anyone you want in cash during your plan. Just don't count on that happening regularly. Life has a way of coming down on you just when you get a bit ahead in a Ch 13

Third question.. the bank where our checking acct is also has one of our car loans (more owed than what's worth) and one credit card that I presume we'll have to include in the Ch 13.

All debt MUST be included whether you file Ch 13 or Ch 7. You don't get to pick and choose.

The car payment is almost $600 and we would ideally like to keep the car if we go the Ch 13 route. If the CC that we have through that bank is included in the bk, will the car be taken and the checking acct closed?

First, confirm this during your pre-filing lawyer interviews, but it's very likely in your best interests to NOT reaffirm on a car that's upside down on the loan when you file.

Next, BEFORE you file, be sure to switch your checking account to another bank or credit union. It's very typical for banks and credit unions to have cross-collateralization clauses in the agreements for loans and credit cards authorizing the bank to take money from your checking account without your permission to pay off your cc or car loan. You don't want to get caught in this trap right after you file. You can get the money back if the bank/credit union takes it, but it takes a long time and costs extra $$ for your lawyer to make it happen in court. It's much better to prevent this by moving your checking account to another bank now.

Keep asking questions - we'll help you sort things out as best we can. Hang in there!

[havefaith]

lrprn, thank you so much for your feedback! we are over the median income and would be even if I did not have a job, but we'll see what it looks like once we sit down with the attorney. Right now, even if I keep my daughter at home (saving $800/month in daycare) and we don't have the unsecured debt, but keep car loans, our budget would still be pretty tight. We have had our student loans ($400/month) in forb. for 3+ years..
I'm just eager (or anxious!) to meet with the attorney and figure out a plan. We are selling some things we don't need on craigs list to have a little cash to catch up on utilities and have some $$ for Christmas gifts for the little one.
Thanks again! it's so helpful to have this community!