Should I file for BK?

[Jaax]

I've been reading this forum for the past week, and I still don't know what my options are. I've been thinking on bk for the past 3 months but I'm not sure if this will ultimately be my best option.

This is my current situation. I'm 33 years old, I make $92k per year, I have a $285k interest only mortgage which is currently upside down, the median avg price of my house today is around $220k, I have around 75k in CC debt and a car payment of $525. I have $0.00 in savings and $0.00 in retirement.

My monthly breakdown is as follow:

Income - $6k /mo
Bills - $1k /mo
Car lease - $525 /mo
Mortgage - $1.9k /mo
CC bills (min payment) - $1.2k /mo
Personal Expenses - $1200 /mo

Monthly Income vs. Expenses
$6,000 - $5,825

Even though I have $75 left after everything is payed, I end up using the credit cards to pay for unplanned expenses and my cc's seem to never go down they go up every month.

Please advise.

Thanks!

[Riley]

What makes up your $1200 personal expenses? Ive read that if you were to make a resonable budget and still not be able to pay off all your credit cards in 5 years then bk is def something to look into. But the $1200 in personal expenses seems like a lot. I am new to this and just had my consultation with the attorny, but they said that part of the new law is that they have to give you a free consultation. So it wouldnt hurt anything to at least go talk to them. Tehy can then tell you if bk could work for you.

[Jaax]

The $1,200 monthly expense include the following:

Gas - $200 montly for my wife's car and my car.
Groceries - $600 monthly my three kids eat a lot ;)
Lunch money - $200
Weekends - $200 per month, this is for taking the kids to the beach or park, or any other recreational outing.

[Riley]

OK .. The groceries..That makes sense now.
Seems like even though you make about 30k more than me a year we are in the same situation. I have about $200 left over every month after all bills/expenses are paid. Since I make too much to file for chapter 7 he said ch 13 would be better for me since I want to give my house up. It is just me and my daughter and I am tired to taking care of the house and yard by myself since I have been doing it for about 9 years now. And there is now way for me to sell it now with the market the way that it is. Since 90% of my debt is in first and second mortgage then I will be able to file for ch 13 and only pay about $200 a month to pay the unsecured debt back.
That is a whole lot better.. even with a rent payment instead of house payment I will now have over $600 extra month even after I pay the the $200 a month. So I am excited now. I see the light at then end of the tunnel.
So like I mentioned before.. at least go talk to the lawyer... its free for the consultation!

[pageturner]

Our situation sounds familiar. We were ending up with just a few $100.00 dollars left at the end of each month. We tried for a decade to try to pay our our debt which eventually reached 42k in credit card debt. We dragged debt with us year after year and never established an appropriate safety fund. We are now breathing a lot easier, less stress and know that we took the right action to turn our financial lives around. We both grew up in families that taught us nothing about money. We've made a lot of changes live by a budget. We haven't used credit cards in three months since our visit with the attorney and don't feel the worse for it.

I'd say I think it would be helpful for you. We make about 92k a year together. Who knew it was going to be this hard. When I was a college student I would have thought this was an amazing amount of money to make. Life caught up with us, that combined with our poor money management skills we landed here.

[Jaax]

I will schedule consultations with a couple of lawyers and see what options they recommend, I will share my experiences in this forum.

I was also seeking information to see if foreclosure will be an option in my case. I can probably save $2k a month by not paying mortgage and use those $2k to pay some of the cc debt.

Now that my kids are older and go to school, my wife is planning to return to work from a 5 years hiatus, and her income will help reduce some of the debt.

My FICO score today is around 800 and I don't want to harm my good credit, so I'm trying to see what works best for my current situation.

Thank you all for your great advice.

[Never_Again]

Well bankruptcy and foreclosure are two of the things that will kill your good credit. If you are determined to keep that, you will have to pay the bills off.

Work the budget, and see if there are any areas to trim. With the wife going back to work, that might provide the money to pay everything down.

[Jason2000]

92 grand a year? are you single? if so, no way! work the expenses some.