Sending out an S.O.S., as a last resort...

[Wantmypeace]

I guess I'm at the end of my rope here. I've asked a million questions and tried to tackle this a million different ways, and now I'm just going to throw out an S.O.S to anyone who has time and willingness to offer any ideas at all. This is our financial situation. If you can give me any ideas at all, please, PLEASE, do! We appear to make too much for a Ch.7 and have too much debt for a Ch.13. Should we just stop paying everything and let them come after us until they get 25% of our income and judgements and live out the next 40 years that way? (I'm serious.)

HOME DEBT: $364,150.69 (CURRENT HOME VALUE: $185,000.00)
Wells Fargo Bank 144,555.92
GMAC (2nd) 172,135.63
GreenTree (3rd) 47,459.14

2005 Tahoe $ 15,596.95 (CURRENT VALUE: $ 8,000.00)
2006 Travel Trailer $ 21,138.77 (CURRENT VALUE: $18,000.00)
--------------------
TOTAL SECURED DEBT: $400,866.41

CREDIT CARDS
EECU Visa (Platinum) 16,667.92
EECU Visa (Classic) 4,438.71
EECU Overdraft 2,005.21
Bank of America Visa 5,806.08
American Express Visa 5,785.76
Chase Visa 4,922.35
Bill Me Later 321.17
Capital One (Husband) 6,959.84
Capital One (Me) 8,699.18
------------------
TOTAL CC DEBT: $ 55,606.22

STUDENT LOANS
Direct Loan Servicing 126,743.76
Sallie Mae 159,023.25
---------------------
TOTAL CC & SL DEBT: $341,373.23
---------------------
TOTAL ALL DEBT: $742,239.64
----------------------------------------------------------------------------------------
Income:

8750 (gross)/6600 (net)
[INCOME WAS 12,500, so I've *marked* the things we'll drop to fit our new income]

Expenses:

Mortgages: 3250*
Groceries: 1000 (family of 5, including all household supplies)
Auto Loan: 388* (give up and replace w/cheap cash car)
Trailer Loan: 265*
Cable: 70
Phone/DSL/Cell: 200
Auto Insurance: 135
Life Insurance: 65
Gym: 60
Clothing: 200
Tithe: 100
School Lunches: 50
Gasoline: 600* (drop to 400 after this month, since I won't be working)
PGE: 650* (level payment plan for the last two years; would drop to ??? in a rental home)
Garbage: 35
Health Insurance: 400
Copays/Meds: 425 (12-month average, 2 people w/chronic conditions)
CC Payments: 1400*
Home Maintenance: 100
Auto Maintenance: 100
Entertainment: 100*
------------------------------------------------------------
TOTAL EXPENSES: 9,593
TOTAL EXPENSES w/CHANGES: 4190 (leaves about 1800 for rent, so doable)

[drowning123]

The means test is not the be all that ends all. You may be eligible for 7 based on your expenses versus income. Will it be 2 filers?

[Wantmypeace]

Yes, we are in California, so everything is combined. It feels like we're stuck in no-man's-land between Ch.7 and Ch.13, and there's no way out...

[ccsjoe]

With your situation, the first thing I'd do is interview a good handful of attorneys until you found one that you are comfortable with. Next, I'd wipe out the idea that being over the median means you don't qualify for a 7. The part that really messes you up here are the student loans. Your income and ours (family of 3 here) are not very different at all, we qualified for a 7 no problem. We also found a good attorney who was willing to share the driver's seat with me. Made a world of difference. Whatever you do, don't give up on your first attorney. I also know you're not including some expenses you can include, such a vehicle registration fees (divided by 12), etc.

[Wantmypeace]

I have appointments with two attorneys for next week. I really hope you are right and we will qualify. I just keep reading about people's attorney's telling them they'll pass, and then they get to the Trustee, and he doesn't allow things on their means test and forces them into a 13 (which, in our case, would mean a dismissal). So, I'm really scared, and I don't know who to trust. I REALLY wish I could get a recommendation of a good attorney in our area. I'll stop paying my mortgage tomorrow and be able to pay an attorney, but I need to know I'm not throwing the money away and it's the right decision. KWIM?

[ccsjoe]

If you are in Northern CA, PM me your area, I might have a recommendation for you.

[Pandora]

At this point its best to meet with an attorney who can sit down and go over everything with you. Numbers need to be exact and things must be counted - at this point even I'm confused as you keep changing your net income - is it 6800, 6700 or 6600? You have 3 different amounts listed in your previous posts, and items keep changing or were omitted. Is healthcare 400 or 950? Tithing 100 or 670? Drs / Meds 200 or 425? CC's 1400 or 1500? There's a trailer payment and student loans that weren't listed earlier either.

Before you go trying to do up schedules, you need to make sure you have exact amounts that you currently pay out to your bills - then work on your allowances from there for the future. Student loans have to be deferred in a 13 BK plan is my understanding, and the payment continued once the plan is done; not sure how it works for a 7 but I know they cannot be discharged.

As for the Tahoe, it may be able to be crammed down if you fall into the 910 rule and your interest rate is higher than not. I'm not sure if that can be done for a Ch. 7, but I know it can for a 13. The Trailer - I think you're overestimating the value on it - its 4 years old going on 5, is the same year and about the same price ours was when we purchased ours new in 2006. We valued ours at $7K because a brand new 2010 model was priced at $19K. Ours was paid off and we wanted to keep it, so we had to pay it back in our plan. Is the 18K what you owe on it or do you own it outright?

ETA: are you absolutely certain your home value is 185K? If it came in lower than what you owe to your first mortgage, you possibly could strip the 2nd and 3rd off....but you'd have to be 100% on the value.

[debee]

This is an article that can help you find a good attorney by suggesting questions to ask. (It was recommended by HHM in an old thread I stumbled across.)

http://methnerlaw.com/2009/08/11/what-questions-should-i-ask-a-bankruptcy-attorney-before-i-hire/

[Wantmypeace]

Pandora--I apologize for the confusion. Some of those numbers were trying to figure out what might or might not work (paying health care directly instead of going through employer, increasing tithe to 10% (what we need to do, anyway, but have only been able to afford 100/mo), etc. I'm waiting on my husband's payroll gal to let us know what our new net will be after our family is switched to his insurance (because I'm losing mine with the job), but it should be somewhere between 6600-6800. I thought the trustee would only allow about 200 on meds/docs, but my REAL figures average 425/mo over the last 9 months. The student loans are in deferment, so I didn't list them as an expense. From what I understand, the Trustees don't count them, anyway. As far as the trailer, we were offered 18K on it two months ago, and we owe 21K. (Yah, we should have taken it and come up with the other 3K to pay off the loan!) It was purchased for 35K. It is like brand new, only having been used a handful of times. (32' 5th-wheel toy hauler w/all bells/whistles--essentially, a REALLY STUPID purchase!) So, that's the scoop. I'd like to just do a Ch.7, give up the Tahoe, the trailer, the house, and just start over.

[debee]

If it turns out for some reason that you can't do a 7, could you get rid of the excessive secured debt by letting your house go into foreclosure? And then file 13 to get rid of at least some of the cc debt and deficiencies?

[Pandora]

No need to apologize - I figured it was something along those lines and you playing a numbers game of sorts. Its just hard to look at allowances you want to claim if they keep changing or things are left out thats all. As for the medical, nope - if you have over the standard expenses, if you can provide documentation that supports and justifies it, the trustee will usually allow it. We claim $300 just for copays and meds a month, so $120 over IRS standard. Now that we changed to crappy insurance I could claim another $200 a month alone on my schedules. Insane.

I'm sure you'll be able to find an attorney that is experienced enough in over median Ch.7's - *fingers crossed*

[Wantmypeace]

Thank you, Pandora! I'll definitely be looking, and I've already received a referral from a kind soul on this site! What would I do without this site!?!

Debee--our total unsecured debt is too high for Ch.13 because they include student loans in the total, putting us at 341K-ish. We found that out a year ago when we talked to ONE lawyer, and he took our 400 dollar consultation fee and said, "sorry, you're screwed." (I'm still a little bitter!)

[keepmine]

One thing you might consider.
Most states allow only one garnishment at a time. Contact your student loan servicer and ask them to commence an administrative garnishment. That way, a debt that will likely not be discharged in bk is getting paid and anyone else who sues will be waiting in line for a long time to get a garnishment order.
Ask your prospective attorney's for some input on this should bk not be a viable option.

[debee]

I know your secured debt is too high for a 13 now, but if you unsecured the house through foreclosure or deed in lieu or whatever other means might be available, your student loans are (only) 126+159 = 285k which I believe is below the level for a 13. Not ideal, but a window in case the ch7 door closes.

[Wantmypeace]

debee--My understanding was that UNsecured debt had to be under 335K-ish to qualify for Ch.13. Am I wrong on this? 'Cuz the student loans and the CC's combined are definitely over...

keepmine--THAT is a good thought! I will definitely discuss it with the attorney. I'm also wondering if the SL's garnish our wages, if that would be considered a priority claim and help us out on the means test??? Hmmm....anyone know anything about that? 'Cuz those SL's are going to have to be paid eventually!