Question Taking the plunge! Have questions.

[Freddy03]

First time poster here -

After receiving my first judgement against me on Friday (2 other cases still pending) my husband and I have determined that BK is our only option.

I have a few free consults set up next week to find the attorney for us.

My nerves are recked so any help and advice would be greatly appreciated.

My story:

* We are above the FL median level by $3k
* Mortgage (will be current in Sept) - Want to keep the house - no equity at all in it
* One car paid for (03 Saturn - needs work - not worth much). Need to keep
* One car (financed) current - need to keep
* We are living paycheck to paycheck. In Oct hubby is going to nights so that would mean more take home money
* 2 dependants
* Just have everyday household stuff (furniture, one flat tv, wii, etc.)
* Behind on property taxes (not included in my mortgage) I usually pay it with our tax refund but this year we had a car accident that was unexpected expense.
* Est 45K in unsecured debt - 3 suits so far - one loss (6k judgement).

Any suggestions?? I'm currently freaking out if we do not fall under Ch 7 what our 13 payments would be. I'm also nervous about having to surrender any items.

Thanks

[SMinGA]

Being slightly over median does not automatically mean you'll have to do ch. 13.

Calculate your net income per month - if you get paid weekly or biweekly then multiply it out for a year and divide by 12.
Calculate your monthly bills... Mortgage, car payments, utilities, insurance, etc.
Calculate 1/12 of any annual expenses like property taxes & insurance.
Calculate monthly expenses... Groceries, household needs, gas & vehicle maintenance, home maintenance, clothing, out of pocket medical, etc.

What is the net result of monthly income less all the expenses & bills? You want to use reasonable yet realistic figures for your expenses, utilities, etc. $300 on groceries would probably be unrealistic, yet $1500 on food/groceries would mean you should be able to find a way to spend less. This may be a time to see where you can cut back. I mean, if you're -$500 each month then discharging credit cards thru bankruptcy is only part of the equation. You still have to find a way to balance, or come out a little ahead each month.

Note: you don't have to disclose those details here if you don't want to, its more of a 'to think about' sort of thing. Do not count credit card payments, or payments for anything you would give up in the bankruptcy.

[Freddy03]

Thanks

After I did the math we aren't in the red because currently I'm paying on most of the credit cards. Once I stop paying those we'll have freed up some extra money for the month.

[SMinGA]

If you're certain you are going to file - then stop paying the credit cards. Start saving $ for an atty and anything else you have put off. Like medical/dental visits, car maintenance, etc.

This is also a time to assess your expenses and see if there are things that you have clipped out that maybe should go back in. Such as if you have raised your deductibles on auto insurance (to trim the insurance bill) then put them back at $500. If you do not have life insurance, look into getting basic policies. If you're currently living off of rice & beans (figuratively) then start trying to figure out what a reasonable grocery budget is for your family. When money is tight and we're trying to juggle everything (pay credit cards) we tend to neglect other areas of our financial life. Its time to change that way of thinking. I don't mean to start living extravagantly - but you do want to live in a way you can sustain. You may have spent next to nothing on clothing for the past 6-12 months. Can you go on like that indefinitely? Probably not.

If, all of that considered, you do have $ available each month then you will probably be in a ch. 13. But its not the end of the world. In your case, it could be a good thing. It could be used to pay off your back taxes. You will still want to go to your atty consults with an accurate budget, one you know you can live with.

Thanks

After I did the math we aren't in the red because currently I'm paying on most of the credit cards. Once I stop paying those we'll have freed up some extra money for the month.

[Freddy03]

Thanks

Well see how the consults go.

[Freddy03]

Question:

Since I am going to stop paying my accounts that I'm on fixed payments with this month - I'm concerned b/c I do my banking with Chase Bank. And one of the cards is with Chase (not attached to my checking account).

Should this be a problem. I was seriously past due with them last year (prior to being put on a fixed payment plan) they never mentioned taking money from my checking account.

Thanks

[justasking]

Move to a different bank for your banking. Do it asap.

Problem solved.