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On the brink...Confusion & ??? abound

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Well, it's nearly finalized in our minds, BK7 is likely to be on the very near horizon. Here's my scenario. $45K in unsecured debt. This is the 3rd time we have gotten here, due to poor planning and compulsive plastic usage. The other 2 times we refi'd into our second mortgage (which was pretty inane the second time, as it only secured more debt, and didn't clear up what we had). Now, here we are again :oops::( . I am having MAJOR pride & embarassment issues with this prospect, however, I can see no other venue (as DC is a scam, and I am not going there).

We are current on all bills, however, we have nothing left to live off of (we also have 2 small children). I have done extensive research on CT BK processes/laws/exemptions and am fairly confident we will retain our cars and house (we both work, so we need 2 cars, not to mention the smaller chid has to be driven to pre-school). I know I will have to reaffirm the loans on both vehicles, and the CT exemption will be covered.

- What are the chances of a successfull BK filing resulting in discharge, being that I am current on all payments?

- What impacts does this have on future employment applications? (currently we are employed, however, the job market is VERY shakey)

- From my perspective, BK7 is the way for us to go. Correct?

- How often are BK7's declined when full, honest, accurate disclosures are made?

One final inqiury. What is the status of the current BK laws and the reform thereof? I know there are "means tests" and the like on the horizon and/or in place now. Does anyone know the effective dates of the BK reform laws? Obviously, I will inquire with my attorney, however, I am curious and anxious on this topic.

I appreciate any comment or advice.

I will be polling some friends, family, and co-workers for attorney's this week, so I can get off on the right foot. A FRESH START is what we need, and a BK7 will also force to start living on cash rather than the dreaded plastic nightmare.

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I feel your pain. I'm in the same boat only double, four kids and about 70K.

This also, is my third time building debt, but never this high, and with no 401k, IRA or recent sale of house to use BK 7 is looking like the only option. I now know it dumb to cash in the 401k and IRA in the past but you gotta do what you gotta do.

From an employment prospective, add some medical bills to your BK 7 filing, and if asked explain you had some unexpected large medical bills. The prospective employer will drop the issue.

Don't talk to an attorney or friends, until you are ready to go cold turkey with the charge cards (use of the card after consulting with an attorney can be looked upon as fraud "intent to repay" not valid).

Also, if you have no equity in the cars you may be able to just perform and not reaffirm. To perform just keep making payments till you are tired of car, you are then not reasonable for any shortage in value.

From what I have been reading the only time you run into any trouble with BK 7 filing is when your budget is way out of wack. Keep you disposable income below $100, and keep you food budget low ($35 a week, per member of household). I have read some cases where the debtor tried to explain “well my husband works so hard and needs to go out to lunch…” not good, if the trustee brown bags.

Lastly, no current news on the HR 975 “BK abuse and reform”. The bill was placed on the Senate calendar 50 (don’t know what that means). If passed GW will sign, but there will be 180 day window till the new law becomes effective.

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