Thinking about declaring bankruptcy

[Giant Robot]

I've bitched and moaned about our financial situation forever now (and thank you for listening). My wife and I have made it through many hard times and many PBJ and sandwiches. Every month we say, "We just need to make it through this month and things will get better next month." That has been going on for years and every month things don't get better. Something else happens. Another bill surfaces. We screw up our budget. Trust me we have made many mistakes with our budgeting so we are in a fix we have brought upon ourselves to some extent. I'll own up to that.

It's just so bad now that we don't see a way out. We have credit card debt. Medical bills. Education loans. IRS debt. Rent. Day care. Insurance. Car payment. Utilities. Fuck me I can't stand thinking about it. Mrs. Giant Robot brought up the obvious last night, and good for her for saying what probably needed to be said. We need to look at bankruptcy. Our credit is fucked anyway so that doesn't matter. We need help and the only thing I can see is this. Budgeting classes and things of that nature, good we need them. But we are so far behind the eight ball that I don't even think that will help.

I wanted to hear your thoughts on bankruptcy and what you think of this mess. I just need help.

[judaspriestess]

1. You will probably have to go chapter 13

if you have IRS debt and student loans(pay them on a plan) then you can kiss everything else goodbye. The credit cards won't probably see a dime and if you find a good experienced attorney you can probably have that IRS debt reduced. They may settle. Student loans survive anything.

Its not so bad once you do it. I mourned my credit and cried for months before I did it but in the end its there for a reason, so take advantage of it. The best advice I can give you find a good attorney. Give up ALL your credit cards, some may tell you, you can keep your some of your credit cards. Not true!! Once you file all your credit cards will close automatically. But if you need one for emergencies, Orchard Bank and Household bank will extend credit to you after you file within a few months. It will be OK..... best wishes

I am seriously considering getting my paralegal degree and doing bankruptcies.

[RebelOne]

4. I think they would be eligible for a Chapter 7.

I filed a Chapter 13 in April. I couldn't file a Chapter 7 because I earned too much money. And you cannot keep any credit cards. I had to give up all of mine, even the gas cards. The only credit card I am allowed is a secured one. With a Chapter 13, they will have to make monthly payments through the court to the creditors. You pay one flat sum monthly and it is distributed among the creditors. I have to pay $700 a month, which is deducted from my salary.

[judaspriestess]

15. right but if you file a chapter 7

you will still owe the IRS and student loans. If you include the IRS in your BK then you can stop the interest from collecting on the debt and reach a settlement. Student loans no matter what survive anything you file, whether it will be a chapter 7 or 13. Those will have to be paid off no matter what. My attorney structured it to where I am only paying the IRS and my home (cause I fell behind) in the debt. My credit cards are not seeing a dime as well as the car I gave up. He also put me on a graduated scale in payments to make the shock easier on me.

But each case is individual and ultimately each person will have to decide what works best for them.

[Giant Robot]

20. There is no way we could do $700 a month

Between rent and daycare that is half our income for the month right there. Then car payment. Then insurance. Oh yeah, we have to eat too. Pay utilities. Diapers. Clothes for a growing girl. Our luxury is cable.

[guitar man]

2. I'm right there with you

I contacted an attorney yesterday, going to see him tomorrow, probably going ch 13. I just can't take it anymore, there's just no money left after we pay all the bills...:cry:

[RebelOne]

6. If you have no money left after paying your bills, you will

probably have to file a Chapter 7. I had money left over after paying my bills and living expenses, so that's why I had to file a Chapter 13.

[Giant Robot]

7. We should have money left over

But never do. I guess we go with Chapter 13. Well I guess it can't be worse than what it is now.

[guitar man]

8. oh gods I hope not

I'd probably have to give up my bike to file ch 7. No way I'm going to do that, I don't know how I would get another one after a ch 7. :(

[RebelOne]

10. You are allowed to keep your bike or car if they are your only

means of transportation. You are also allowed to keep your house.

[guitar man]

12. that's the problem

I have the bike, the car and a pickup truck. I have a sinking feeling the bike would get cut in the deal. I don't know if I could live with that.

[Giant Robot]

21. I'm curious is you have any knowledge

about a car that we owe on still. We are happy to pay on it, and we like it a lot, but we really NEED it also. We have two cars and that is the family car that we need. My car is a little Saturn that cannot support a family very well. But it is paid off. We NEED that other car.

[judaspriestess]

23. you can keep the car

as long as you re-affirm it and are CURRENT on it. You have to be current on the car if you want to keep it. They will allow you to do that.

[SeattleGirl]

3. I'm also declaring bankruptcy.

I owe so much money, and while my income is going back up, I'm so deep in the hole it's not funny.

I've already retained an attorney, and am working at paying him the cost of the bankruptcy.

Not what I really wanted to do, but at this point, my choices are to go forward with it, or spend the rest of my life, paying off thousands of dollars of debt for the rest of my life.

[Giant Robot]

5. It's sad and comforting to know I am not alone in this

Thank you.

We hold a free legal aid clinic at my agency so I am probably going to sneak in next week and speak with the attorneys present to understand what this will entail and how this will work and how much we can expect to pay.

[anarch]

9. I don't have enough money to hire a bankruptcy lawyer

I'm thinking of just faking my own death or something.

[RebelOne]

11. If you file a Chapter 13, the payment to the lawyer will be paid

monthly through the court. At least, that's how it worked for me. It's totaled in with all your other debts.

[Giant Robot]

14. I hear you can make a good living

as the Dread Pirate Roberts.

[PRETZEL]

13. Don't screw up like I did

I should have filed last year. Last year we would have come close to being able to file Ch.7. I got too emotional about. I'm stubborn and felt that if we could just get caught up we'd be ok. BIGGEST GODDAMN FUCKING MISTAKE I EVER MADE IN MY ENTIRE LIFE!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

Now, after refincing thinking things will get better, they've gotten worse. We make too much money now for any thoughts of filing Ch. 7. I'm going to lose my house (it's being foreclosed) I've already lost all my credit, cashed out everything I own and it didn't help.

As my attorney says, it's a business decision. Don't let it get personal.

[Giant Robot]

16. Oh we've arlready screwed it up.

We just don't have a lot to lose.

I thought I was being responsible. I thought it was the right thing to do to try to pay everyone you owe. And we are now fucked. Royally.

I'm sorry you have to go through this to my friend. I truly truly am.

[PRETZEL]

17. As am I for you and everyone else in this situation,

but right now I know I only have myself to blame. I was stupid enough to fall in love with someone who I couldn't say no to. As a result within the last 3 years I've gone from being totally self sufficient to absolutely broke.

And now for the "smack you upside the head" comment, people that know her warned me of this. She and her ex-husband had also filed bankruptcy.

[judaspriestess]

18. Are you filing a ch. 13? you can save your home that way

and you don't necesssarily have to pay back your credit cards. I wanted to file a ch.7 but couldn't because I had fallen behind on my house. You have to be current on your car and house to go ch.7 otherwise the bank can take the home. I was going to settle with the IRS too. I had it all planned out until I couldn't find a damn job and fell behind on the house, it changed the scenario completely.

[PRETZEL]

19. don't want to save house,

we needed to move on anyway. It was my house from my previous marriage and it's always bothered her despite being able to do anything she wanted to it.

Right now, anyone in the Philly area looking for a cute Cape Cod with 4 bedrooms, please tell me asap.

[judaspriestess]

22. sometimes its better that way

you can always get another in the future.

[Sen. Walter Sobchak]

24. This is bankruptcy form 22A for the Chapter 7 means test,

http://www.uscourts.gov/rules/BK_Forms_06_Official/Form_22A_0407.pdf

The state median income for the purposes of the means test in section 707 of the above form is found in this table depending on your family size.

http://www.census.gov/hhes/www/income/medincsizeandstate.xls

After your discharge you will actually have suprisingly little difficulty obtaining credit, just be very careful with it as it is a trap, they want to snare you again since you can't file again for years.

You can make an attempt to discharge your student loans through an adversary proceeding, but the lawyers will want a huge retainer and the odds of being sucessful are not very good. But the option is there, especially if you were unable to complete your education or are in a permanent circumstance that drastically limits your earning potential.