Need advise!!!!!

[Extended]

Made my first post last night and I am sure glad I found this forum. I have been reading for months and have learned alot so far. I am currently searching for a lawyer to help with my situation. Below is an email that I drafted to aid in my search. If anyone here can help with any of this questions, I would appreciate any feed back!

Our story is pretty simple....we lived above our means and I lost my job. We have never made a late payment and the thought of going through this process is hard to digest, although I know we are not alone. At this point I really am not attached to anything we have and am looking to get on the path of living with-in our means.



I am searching for someone to help us through the BK process. We are probably not what you consider a typical case, mostly because my wife and I both make over the median income in Missouri. I have being doing lots of research for the last 2 months, so I have a general understanding of how a 7 & 13 work respectively.



We are not interested in doing anything fradulent (not that you would allow that anyway) but we want to strategically plan our BK. Below I will lay out some of our situation and if you think you may be able to assist I will schedule an appointment. I am hoping this email will save both of us some time.



Long story short... I was laid off for 4 months earlier this year. When I went back to work, I took a pay cut (20K) and we blew threw all of our savings and assets while I was laid off. We are presently current on everything, but have nothing to live on or save, not to mention any major expense right now would be devasting. Everything we have has depriciated and we are upside down on 3 cars and our house. I am not trying to save anything except for our household items and will need 2 vehicles for transportation.



My current job situation is not good. There is a very good chance I will have my position elliminated anyday with-in the next 6 months. In addition to that, the current economy has made my job unbearable - lots of hours = high stress and impossible to manage. If I change careers, I will take a drastic pay cut (most likely 50%), which is why we are trying to fit into a chapter 7 and start over.



Our current income is about 132K a year (I make 72K and the wife makes 60K). I realize that she is over the median income (49K) on her own, but I think we may still qualify for a 7 if we can make it 6 months on her income.



Here are my primary questions:



1. Is it considered fraud if I quit my job because of the lack of security and stress level? Or do I have to be termintated from my position?



2. We need to surender our house, but plan to stay in it as long as we can. How long does the foreclosure process take in this area? I've heard everything from 6 to 18 months?



3. How long can we hold the creditors off before being sued or incurring any legal issues before the BK? We are current now, is it possible to hold them off for 6 months, so my previous income is not held against us? Will this raise any red flags? We need to free up cash to pay attourney fees, car maintence items, etc. and need to prepare to live on cash and not credit moving forward.



4. When calculating the means test, since we are not keeping our house, do you just plug in the IRS allowance for rent, utilities, etc. for the county you intend to live in?



5. How much time does it typically take you to verify whether or not someone qualifies for chapter 7? Is this something that is included in your initial consult or do we have to retain your services to get that answer? If so what are the fees associated with finding out if we even qualify?





Here is some more info about our situation:



unsecured debt = 80K ($1400 monthly)

mortgage = 320K ($2850 monthly) value 260k ish

car 1 = owe 20K ($420 month) value 14K

car 2 = owe 13K ($300 month) value 8K

truck = owe 11K (389 month) value 10K

car trailer = owe 13K ($225 month) value? 10K maybe?

4 wheeler = owe 7K ($195 month) value 6k-7k?



The other $1600 a month that we have left covers the utilities, food, gas, and personal items. Currently we have absolutely no disposable income and most months are using credit cards for a tank of gas or a cheap trip to the grocery store to get us to pay day.

I am prepared to walk away from my current job if it enables me to statigically plan my BK, it's just a matter of time before I lose it anyway. At this time we are not interested in doing a chapter 13. If a chapter 7 is not doable. then we will wait until I change jobs. I appreciate your time and I am not looking for a hand out. If you think you can work us into a chapter 7, I have no issue paying for your services. Hopefully this email will save us both some time and money.



That is what I sent to several lawyers and am waiting for a response. If anyone here has any suggestions or non-fradulent moves we can make to make this transition easier, especially anyhting we can do in our power to improve our chances of qualifying for a chapter 7 or any other advise we would be very thankful. I'm going to try and run the means test again but I'm not confident I am completing it correctly.

Thanks for reading about our nightmare, lol. We have already accepted the fact that we need to file and this forum has aided greatly in keeping us sane.

[justbroke]

This is a difficult position at best.

I'd rather have a home with a hypothetical ride-through, than a mortgage account being actively reported to the credit bureau and a re-affirmed mortgage.

You have to way what's worth more to you.

[Extended]

This is a difficult position at best.

I'd rather have a home with a hypothetical ride-through, than a mortgage account being actively reported to the credit bureau and a re-affirmed mortgage.

You have to way what's worth more to you.

I'm not sure I understand your thought? The home we are currently have is a big part of our issue. We are upside down and have a crappy mortgage (thats another long story...). Can you expand on your comments above? Sorry but I am still learning the ins and outs. It sounds like there are some alternatives that I may not be aware of?

If I lose my job (which I'm pretty certain at this point) there is no way I can afford to stay in this house.

Ride through?......How does a ride through effect the means test? I just keep current on the mortgage and if I can't make it I just let it go later and it is included in the BK, correct?

"than a mortgage account being actively reported to the credit bureau and a re-affirmed mortgage."

Are you saying that if the mortgage company is reporting to the credit bureau's before the BK...that is bad?

Sorry still trying to get a grip on the whole picture....thanks for the help!

[keepmine]

I'd not send that email.
You ask questions like quiting your job face to face with no paper trail. Personally, I'd quit and if quizzed just say the stress and hours were unbearable and leave it at that. Noting wrong with pre-planning-you just don't advertise it. You don't want want to be the one in 250 that is audited and end up with an embarrassing email that the trustee may claim totality of the circumstances and allege substantial abuse.
This is sort of like going to a lawyer that specializes in asset protection. The first thing they say is, we don't do asset protection. We do retirement planning, estate planning, tax planning but, no asset protection.
Not trying to censor you but, ask your questions here or, in a face to face. Don't use email for those sort of questions.

[Extended]

Wow...that is a very good point. I didn't think about it like that. Well I guess that I need to find 3 different lawyers to help me.

I know on paper that this may seem boarder line fradulent, but the fact is....I hate my job and the stress is breaking down my will, I am held to expectations that are not doable in today's environment.

I'm not going to trade my health and marriage for a 72K a year job. I sure hope the court doesn't feel that way.....

[keepmine]

You are not the first person who quit a job or, refused overtime in order to preplan a Chapter 7. In the unlikely event a trustee asks about it, stress and long hours are an exceptable reason. Nothing in the bk code requires you to be employed. Just don't advertise the real reason you are trying to lower your income.

[Extended]

You are not the first person who quit a job or, refused overtime in order to preplan a Chapter 7. In the unlikely event a trustee asks about it, stress and long hours are an exceptable reason. Nothing in the bk code requires you to be employed. Just don't advertise the real reason you are trying to lower your income.

I hear you, good advice.... thank you!

The million dollar question now is.... How long is it feasible to hold off the creditors? Has anyone made it 6 months without paying their bills and then filing? If vehicles get repo'd or jusdements get made against you will BK still protect you after the fact?

[keepmine]

I hear you, good advice.... thank you!

The million dollar question now is.... How long is it feasible to hold off the creditors? Has anyone made it 6 months without paying their bills and then filing? If vehicles get repo'd or jusdements get made against you will BK still protect you after the fact?

Nobody can say with any certainty when you'll be sued or even if you'll get sued. I was 6 months in default when I filed and just got annoying letters and phone calls.
If you get sued, the debt is dischargeable in bk.

[CatsInTrouble]

That's too long of an email for a lawyer to read. You need to just go have the free consult. Take a list of things you want to ask/bring up.

My friends income ALWAYS dips in Nov/Dec due to the the holidays (small business) and so that will really help her median income. This year, then, she actually welcomed it!

[yeahdischarged]

I'm sorry I can't answer your questions, but I do have another thought - have you been rate-jacked yet? You say your current monthly unsecured debt is $1400. Has even one creditor rate-jacked you after checking your credit report? Once one creditor does that (one of ours went from 7% to 29% in one day, we were done. That was the final straw. Prior to the lender doing that, we were crawling, scraping by. When they effectively doubled our minimum payments and then knowing that soon, other creditors would see the same high utilization and rate jack us as well, you could easily be looking at much more just for those payments.

Why would your not working be any different than a stay at home mom? When we filed (also over the means but not as much as you are), there was ONE month we could file. Period. It was math - the previous 6 months, yada yada.

Good luck.

[Flamingo]

There are two issues here; first, you have not yet been laid off or had an income reduction and you cannot base a bankruptcy on events that have not yet occurred. While you state your poisition is probably going to be eliminated, it may not be so you are just going on assumptions at this point. Secondly, if you do quit your job to qualify for filing and not work for several months, it is possible that could work against you for any possible good future employment as to your reasoning for quitting if asked and any circumstances surrounding that. Jobs are not that easy to come by and it will stay that way for a while. What happens if your wife should lose her job or have an income reduction? I would certainly think a few things out here and do face-to-face consultations with BK attorneys (attorneys do not usually respond to emails from non-clients to give legal advice). Put together a complete listing of all your bills, monthly payments, sources of income, recent paystubs, an asset listing and copies of your most recent federal and state tax returns and take those with you to scheduled appointments. You will find out exactly where you stand and will be advised what is best for you to do in your particular situation in the state in which you reside.

Best of luck to you.

[Extended]

I'm sorry I can't answer your questions, but I do have another thought - have you been rate-jacked yet? You say your current monthly unsecured debt is $1400. Has even one creditor rate-jacked you after checking your credit report? Once one creditor does that (one of ours went from 7% to 29% in one day, we were done. That was the final straw. Prior to the lender doing that, we were crawling, scraping by. When they effectively doubled our minimum payments and then knowing that soon, other creditors would see the same high utilization and rate jack us as well, you could easily be looking at much more just for those payments.

Why would your not working be any different than a stay at home mom? When we filed (also over the means but not as much as you are), there was ONE month we could file. Period. It was math - the previous 6 months, yada yada.

Good luck.

Ironic how you brought this up....Just yesterday citi doubled our minimum payment because our payment didn't get processed until 2 days after it was due, it was post marked on time. The account is in my wifes name and she is going to call Wednesday to try and have it reversed, I guess we will see.

This has not been a problem so far because we have had our accounts for 5-10 years and have always paid on time. I haven't checked my credit report lately but I don't think there is anything there that would cause a creditor to jack my rate, atleast not yet....

[Extended]

There are two issues here; first, you have not yet been laid off or had an income reduction and you cannot base a bankruptcy on events that have not yet occurred. While you state your poisition is probably going to be eliminated, it may not be so you are just going on assumptions at this point. Secondly, if you do quit your job to qualify for filing and not work for several months, it is possible that could work against you for any possible good future employment as to your reasoning for quitting if asked and any circumstances surrounding that. Jobs are not that easy to come by and it will stay that way for a while. What happens if your wife should lose her job or have an income reduction? I would certainly think a few things out here and do face-to-face consultations with BK attorneys (attorneys do not usually respond to emails from non-clients to give legal advice). Put together a complete listing of all your bills, monthly payments, sources of income, recent paystubs, an asset listing and copies of your most recent federal and state tax returns and take those with you to scheduled appointments. You will find out exactly where you stand and will be advised what is best for you to do in your particular situation in the state in which you reside.

Best of luck to you.

Thanks for the reply, I have already considered the points you mentioned. I have already taken a 20K pay cut this year, which is the reason we are struggling. My wife is a RN and I can't imagine her ever not being able to find work. My job situation on the other hand is not stable and is the main reason I am thinking about resigning, find entry level work in another field and down size our life style. I've made 2 more appointments with BK lawyer's so helpful they will give me some direction as to our best options, without charging me a bucket of $.

Worse case, I think we may have to file a 13 and if I lose/quit my job, try to convert to a 7 then, hopefully the lawyer's can give me some direction there.

[PoGirl]

I hear you, good advice.... thank you!

The million dollar question now is.... How long is it feasible to hold off the creditors? Has anyone made it 6 months without paying their bills and then filing? If vehicles get repo'd or jusdements get made against you will BK still protect you after the fact?

We stopped paying unsecured debts in August and filed in November. So, that was 4 months - almost 5. We continued to pay secured during that time, however.

We got phone calls, most of which were easily handled by providing attorney information. When we delayed filing some of them started calling again, so there was a period of time I just turned the ringer on the phone off. MUCH less stressful. Besides, I had no new information for them anyway.

Flamingo's response is worth consideration. (She usually has pretty good advice and a keen ability to throw out things I had not thought of). That being said, I have had the super-stressful job where you never knew when the axe would fall. It was very damaging to my family life. I was able to get another job and leave. At first it was a pay cut, but it made a HUGE difference in our home.

All of that to say . . . evaluate the job situation on its own merits and leave the financial aspect out of it for a moment, and you'll get your answer. If you do change your employment situation, expect that you'll need to let some time go by before filing.

[imoverit]

We are in the EXACT same position only a couple of months ahead of you. I quit my job in December just before Christmas so I could spend the holidays with my family, it was the first time in 10 years I was able to be with my kids during their time off of school and it was 100% worth it. Seems silly to go to such a hateful place every day and file chapter 13 and deal with it for 3-5 years or quit and be done in a few months. It was a no brainer for us! We are giving the house and all the debt that goes with it. We are upside down 150k. Hoping to keep our 2 cars. Without all this debt and a normal rent payment instead of a huge mortgage payment we will survive just fine on 1 income for the time being. I saved some money not paying the bills for a couple of months while I was still getting a paycheck and without paying a mortgage. In the meantime I am returning to school to change careers. I figure it's now or never. We stopped paying everything in November and are hoping to retain a lawyer in Feb and file in April/May. I have already talked to a lawyer but nothing since the initial consultation. He knew what I wanted to do up front and said it shouldn't be a problem. Sorry so long I just wanted you to know their are lots of folks in the same boat (a coworker is doing it as well, but she is a couple of months ahead of me). Good luck!