Question HELP please - Opinions, should I file Bankruptcy?

[kozer1]

Hello everyone

Sad to be here for obvious reasons, but happy to have found this wealth of information! I am struggling with the idea of filing bankruptcy. I am interested in Chapter 7. I am looking for opinions as to whether I should just try to pay off my debts and live below my means for a few years. Here are the stats:

I am married, 27 years old with two kids. All the debt is in my name, in about the amount of $18K scattered across 3 credit cards (each about $4-5K), 1 (small) hospital debt ($350), and 2 other credit cards which are actually in good standing right now as far as payments - they are carrying balances, but nothing crazy (one is $400 and the other $300). There is also one outstanding balance in collections for a school debt (not student loan, it's an out of pocket unpaid expense from the school itself) for $2,100. I also have 2 very small student loans in good standing, which I understand can't be wiped off anyway. Not a big deal. They are very manageable.

Currently, we are all living with my mom right now and DO NOT pay rent or utilities. I see this can be an issue, especially in a Chapter 7. I am not really all that interested in Chapter 13...To go through lawyer fees, go to court, etc. to just have to end up paying back the debts anyway in the end. I can probably strike a settlement with the creditors and lawyers myself if I wanted to (but don't quote me on that for all debts, some of this debt is long standing - those credit cards, particularly. Two are in my maiden name!) I have received settlements and deals along the way but have turned them down because I can never come up with that chunk of $ straight away. I can do monthly payments and with my income tax return coming I can take care of bigger things.

I do want to note I have a bank levy on my accounts with Bank of America right now for one of those high balance credit cards (Chase). It is for $3,900. I was actually going to pay that off with my income tax return if I decide against BK.

I don't work, but my husband does. He makes about $38,000 a year and like I said - no rent, no utilities, no cable - no cell phones either. No life insurance and only one auto insurance payment of $130 per month. All of that makes me nervous to even bother filing. To be honest, deep inside I know if we put our nose to the grindstone we could probably wipe out this debt on our own within 2 years or so. My husband would rather just wipe it out in BK But me, I think it'll be a hard case because of those facts above. Not to mention these are MY debts so he isn't too happy with me about the entire situation. Obviously I am filing alone.

Also, I live in NJ so $38,000 is WAY under the median. For a family of 4, it is $101,000. Just wanted to note that.

What do you think?? Let me know if you need more information.

[lotsahats]

Hi, Kozer. Welcome to the forum.

I don't pretend to be an expert here. There are many on this forum who are much more knowledgeable than me, and I'm sure that some will come on here, and help you out. But, from what I do understand, if you file, you probably will be put in a C13. But, honestly (I know you don't want to hear this), if the only way you can pay your debt without bankruptcy is by depriving yourself of basic necessities, then maybe it's something to consider.

In a 13, you don't necessarily pay off your entire debt--only what your expenses will allow over a 36-60 month period. And, with your income being below median, you would only be put in a 36-month plan (feel free, anybody, to correct me if I'm wrong on that point).

I wouldn't resort to settlement. That only works if ALL your creditors are willing to work with you, and there is always a chance they'll sell the remaining balance to a collection agency, or a junk debt buyer. Plus, the forgiven portion is taxable (meaning, you'll receive a 1099-C, of the forgiven amount, which you'll have to include as part of your income). Not the best way to go.

[keepmine]

Since you have no income your lack of ezpenses won't matter.
Your husbands income will be taken into account but, with only $38K and a family of 4 I imagine he has plenty of expenses even if you're paying no rent.
I think you'll be able to file a 7. Most bk lawyers give a free or lowcost initial consultation. Speak with a few and see what they suggest.

[buzzstpoint]

Have you tried to make a budget?

Since you don't have any rent or utilities.
have you written down where your money goes?
Have you written a budget?

One of the big things with BK is where your money is going and can you afford to pay the debt.
After you two pay all your bills for the month/paycheck. Do you have enough money to live off of?
Or are you stuck in the CC revolving door? Pay the bill max it out and repeat?

Write down where your money goes, and what you need to spend it on. then it may give you a better picture on if you should file BK.

[Drazil65]

Hi and welcome. My husband is a full time student and has no income he is the only one that filed (everything was in his name only), I am the only one working at this time and we filed Chp 7 in December (341 1/17) and are waiting for the discharge around 3/19. My income was taken into consideration but we also are way below for a family of 3.

Do you have a plan if you do not file? What you have been doing is obviously not working or you would not be here asking questions so if you do not file how will you handle the debt? I only ask because you will need to make decisions one way or another for your future. Is there a way you could work and earn more money? You and your husband will probably need to sit down and write down all your options and ideas to get a good picture of your situation and go from there. Bankruptcy is not the easy way out (not saying you think it is) and if you do not learn anything from the experience then you will be on the road to filing again in the future. Keep researching and the 2 of you need to continue to talk about it. Good Luck!