Do you have to be in collection first?

[MEA2]

We pay our bills on time we so we don't have creditors calling us.We just can't make much over the minimum and we owe over $50,000 on CC,190,000 1st mortgage, $50,000 on a second mortgage, plus car payment.Does BK work for people like us?We live in an expensive area and feel like we'll never get out of this hole...

[SinkingFast]

You posted in another part of the Forum and I've given you some info there.

I gotta ask,..........

Why do you have a 2nd mortgage?? Did you take it out to pay off CC debt?? Did you hope to wipe the slate clean with a lower payment only to wind up charging up the cards again??

If that's the case, then you are living beyond your means. Just because the banks say you can afford those payments doesn't mean you can. If you've taken on one 2nd and already run up another $50K in CC debt, I'd think that says you can't afford that house and your lifestyle.

You may need to take a step back. Get rid of the $550/mo car and get something more sensible. Get rid of the house and buy or rent something with a lower monthly payment.

Reduce your costs to live and then see where you are. You may not need BK. It may take a while, but you may be able to pay your debts off on your own.

[MEA2]

You posted in another part of the Forum and I've given you some info there.

I gotta ask,..........

Why do you have a 2nd mortgage?? Did you take it out to pay off CC debt?? Did you hope to wipe the slate clean with a lower payment only to wind up charging up the cards again??

If that's the case, then you are living beyond your means. Just because the banks say you can afford those payments doesn't mean you can. If you've taken on one 2nd and already run up another $50K in CC debt, I'd think that says you can't afford that house and your lifestyle.

You may need to take a step back. Get rid of the $550/mo car and get something more sensible. Get rid of the house and buy or rent something with a lower monthly payment.

Reduce your costs to live and then see where you are. You may not need BK. It may take a while, but you may be able to pay your debts off on your own.

Thanks for your replies on both boards.Yes the second mortgage was to consolidate debt...and here we are again!Apparently we didn't learn and we do live above our means...the $550 payment is a minivan because we have kids.To sell this house we'd just cover the 1st and 2nd mortgage but still have the CC debt to think about......My dh is having sleepless nights,this seems like a last resort.....We are desperate

[SinkingFast]

The reason I could guess so easily is because we had the same experience.

The house wasn't anything grand, but the payments were more than we'd paid before. And the expenses for the property were more. And the utilities were more. And growing kids going to school cost more. You name it, our expenses went up, up, up. But the salary didn't.

We'd lived there for about 5 years, and flashed a lot of plastic, when we went and consolidated all our debt on the house. But we didn't adjust our lifestyle any. Not that we really could. We weren't taking lavish vacations or buying fancy clothes and such. So now we had a 1st and a 2nd and running up CC debt again. Another few years and we did a total refi of the house. We shook hands with the Devil on a superinflated appraisal. 80% first, and 20% HELOC.

Nearly 2 years ago, Hubby lost his job. It took 6-7 months for him to find a new job. Which was outa state. So he moved first and then we moved. We supported 2 households for nearly a year before we couldn't make the payments any more. We can't even sell the house today for enough to cover the 1st. The Lender will have the Foreclosure Auction next Tuesday, on the Court House steps.

You've got to step back, not look at that house as "HOME". Look at it as a financial drain. Same thing with the car. You can trade the car right away and get into a good used mini-van for a lower payment than what you currently pay. That right there will help. If resale housing is moving in your area, try a FSBO to save some on real estate costs. There are companies that will help you do it yourself for a nominal fee.

If you try to go BK and keep the house and keep the car, you're gonna wind up in the same shape without CC's as a safety net and no BK to fall back on for 8 years.

[sarahispoor]

From what I've been hearing, you need to go 3 consectutive months NOT paying on what you plan to go bankrupt on. I think you deserve a second chance and a clean slate. Does anyone know what happens if you stop paying on a car lease?

[gacreditguy]

you do not have to be 90 days without any payments.. that will only lower your credit score more. You do need to wait if you have recent cash advances as those will likely be brought forward on you during the proceedings. I can assure you that I was not late on ANYTHING when I decided to file in late Jan of this year and have had no issues arise. Case should ischarge and close within the next week.

[SinkingFast]

You have to be 70 days from Cash Advances or Convenience Checks use, 90 days from Charges. If you've paid your creditors an aggregate, or total, of $600 or more each, that's money the Trustee can go after to redistribute to all the Creditors. If your preferential payments are significant, the Trustee could call for a hearing to question you about why you paid $X to So and So Creditor. Unwittingly, you could get drawn into the middle of the cross fire on that one.