Beginning my bankruptcy journey today :(

[ssmdem]

We could pay the mortgage at its current amount but still leaves us VERY little wiggle room. Once our income goes back up, we would probably be okay. But it would still be over the 31% that the modification people look at for quite a while until then, so I think we could qualify for the modification. The question we have to decide is if we want to or just get out, rent for awhile, and then try to find something smaller and more affordable that we could pay off quickly. Oh - the mortgage is through Chase.

We have no loans at our current bank. Do we still need to find another bank account?

[Mi Bankruptcy]

OK, you should file then. Make sure you have at least 3 bankruptcy consults and read this forum and ask questions. I can't stress enough the need for 3 consults. Also, pull your credit reports to make sure you are including everything when you are filing. So, if you wipe out your rental and credit card debts would you be able to afford your home at its current monthly payment? Who is servicing your mortgage this will give everyone an idea of what you may face.

You also need to open another bank account. You want to make sure the creditors don't pull any cross collateralization stuff on you. So, if you have a credit card, at the the same place as you bank they can go into your bank and take it.

[ssmdem]

No, it's been at least a year probably longer since a cash advance - and those were all balance transfers. My last charges earlier this month for $535 (tuition) and $650 (medical costs) which again, I know I shouldn't have done, but there's no taking it back now. I plan to wait a few months before filing anyway, so hopefully, this won't hurt me.

[Mi Bankruptcy]

Your in a good place coming to this forum, you provided some good information. You need to know you have just taken the first step towards your financial freedom. Believe it or not you this may all be a blessing in disguise. I have definitely had to call my wife to ask if I can get a $8.00 haircut so I know where you are coming from.

Have you taken any large cash advances in the past 6 months?

[ssmdem]

We have our first meeting today with a bankruptcy attorney. I have spent hours on the internet researching info this past week and know enough to be totally confused and scared to death! I really don't know what direction we're going to go - but something has to change NOW!

Here's our current situation - we own two homes, one that we use as a rental. Our home mortgage is $345K (only worth $278K) with a monthly payment of $2800. Our rental mortgage is $189K (only worth $138K) with a monthly payment (1st mort and HELOC) of $1150. We can only get $1000 rent out of it each month, and it is currently rented until February of 2011. And we have credit card bills of $50K that minimum payments are running us about $1000 a month.

My husband was previously making about $5400 a month (gross). Starting this month, his income is going to be going down to $4400 a month (gross).
In October, I lost my job, and have since found some work, but I'm still short $1500 a month. In July, I will be losing another bit of income (teaching), bringing my income down to just $600 a month -- giving us a total of $5000 a month income. We were struggling before the job losses - there's no way in the world we can do this now.

We've looked at so many options this past week that I'm just overwhelmed. As of right now, we are current and not past due on anything. Pulled my FICO score the other day to just see where we were - probably shouldn't have because it depressed me even further - because it's 738 -- which I know is about the plummet rapidly!!

That will all change this month, and we will have no choice but to miss payments. I'm scared to death because I've never been late on a payment in my life. Our credit card accounts are still open, but they've been cut up, and no further charges will be made to them. My last charge was at the beginning of the month for tuition - I'm trying to get my teacher certification, but honestly, job prospects around here aren't great. I know I shouldn't have charged it - but I had no other way to pay it at the time.

I've thought of calling the cards when I miss the next payment and ask about their hardship programs to try to get the interest rates down, but if we are seriously looking at bankruptcy, I don't see the point - plus they will automatically start deducting the payments, and I don't want to be paying on the cards if we really are going to file bankruptcy.

We are borderline on the means test for Chap 7 - but I think we will qualify if we wait a few months for my husband's higher salary to fall out of the six month time frame. But how long can we go without paying our credit cards before they do something?

The house obviously is the bigger concern. I think we would qualify for a modification, which honestly we could afford if approved. But I don't know whether to apply before we file for bankruptcy and wait for who knows how long for them to decided whether or not to approve it and then file for bankruptcy on the credit cards and rental property. Or whether to file for bankruptcy and then apply for a modification after the bankruptcy is discharged. I'm not totally against letting them have the house back, although I am concerned about how long it would take before we could buy another home, as my husband is only 17 years away from retirement, and a 15 year mortgage would be crucial at that point. However, that being said, our current mortgage still have 27 years left on it - so we're not looking good from that point of view for retirement unless we can start paying some major extra payments soon in order to get it paid off. Obviously, until I can find a job and my husband's salary goes back up, that's not going to be happening anytime soon. The chances of me getting a teaching job in the fall of 2010 is slim to none - the next school year, quite possibly. My only other work experience is in banking - which I knew I'm blowing all chances of that out of the water with a bankruptcy on my record and medical transcription, which I am currently doing but only for a small account and making very little money.

I really am just lost and unsure which direction to go. I'm praying for some very clear answers about what we should do. I totally don't trust my own judgment right now, but I'm so tired of lying awake at night worrying and running scenarios over in my mind. I'm tired of not being able to buy necessities - my husband calls to see if it's okay to get an $8 haircut! I'm just tired of living like this and am ready to have some freedom and peace back in my life.