Jump to content

Bk for us?


hatecards
 Share

Recommended Posts

A little background first, then the dreaded bk question. Dh and I are approximately $50K in cc debt, this is unsecured and secured credit card debt. Our home was appraised at $140K last year, we have a $89K mortgage and a $41K 2nd. We went through a cccs program and were basically screwed, so got out of that and are now in a debt management program in month 7 so far. We have had about half of our cc accounts sent to CA's and any communication from them is with dm company, the other half are still calling and we have one we withdrew from the dm program and have just now made the 3rd payment to get our account back to normal min payments, this account is with Kay Jewelers and is for my wedding ring(secured), balance is approx $4,000 still. The rest we haven't paid on since 11/03(advised from dm co.). We have 2 vehicles, both with very high balances, probably no equity and dd has a car that was left to her by my grandfather that has no balance, my name is on the title with hers(not worth a lot (she is 16). We live in Missouri. We have been told by the dm company that they are already receiving offers of settlement from our cc companies, but we don't have enough saved yet to settle with even one of them. The cc companies that haven't been sent to collections yet are calling incessantly, we don't talk to them, in fact don't answer the phone very much at all. Discover has been harassing dh at work though recently. Ok, now my question is, would it benefit us to file bankruptcy? We don't want to lose our home, and we both have incomes, although dh's is not always steady, he is in the construction trade and weather plays a large role in whether or not he works. Last two years income has averaged about $55K, plus dd receives SS survivors benefits for another year and a half. Our debt is due to various reasons, bad decisions and two family illnesses and deaths in the last 3 years. We just are to the end of our rope and have no spare money, scrape to save the money for the dm program, we haven't used credit cards for almost 2 years, but cannot see a light at the end of the tunnel. Can someone please give me their OH on our circumstances? TIA for any help you can give us!!! (editing) ALSO, we have not been able to pay our real estate or personal property tax yet for 2003 which is now over $2K.

Link to comment
Share on other sites

My suggestion - file for BK. The DM company is not going to be able to help you fast enough and will cost you a LOT of misery and money in the meantime. Discover WILL sue, and for practically any amount. The DM company won't be able to negotiate for you on that one.

The MO homestead exemption is 8,000. However, I would not use the appraisal value to calculate equity in a bankruptcy. Call a real estate agent and ask for a 'walk-away' price on your property. How is the property DEEDED ? If its deeded as 'tenancy by entirety' you have added protection.

If you're upside down on the vehicles, then there's little danger of losing them unless you WANT to turn them in. You have the option of reaffirming the loans or redeeming the vehicles (you pay the bank current market value ONLY to keep the cars).

I would strongly suggest talking to a few BK lawyers, most offer free initial consultations. Before you do that, sit down and figure ALL your normal living expenses. The lower your monthly disposable income the better.

You can find a good expense calculator here:

http://www.ca-bankruptcy-attorneys.com/calculators/expense_calculator.html

Link to comment
Share on other sites

Thanks LadynRed for your reply!!! Discover is the one I have been worried about the most and that has given us the most grief. I'm not sure how our property is deeded, and have never heard of a "tenancy by entirety"? Will have to look at it, will it be on the copy of the deed itself?

On the vehicles, we owe about what they are worth, maybe a little more. Have had one for 3 years, still owe 3 years, the other we've had almost 2 and still owe 5 more years on.

I have been doing some research on Chapter 7, and do have a few questions I haven't found. My concern(not the main one :? ) is 1)on the account for my wedding ring, they(Sterling) are saying it is a secured account, can I reaffirm on that too, or will it have to be sold? It was purchased with a credit card, but the company says I signed a security guaranty on it for the ring itself, after this month the account will be current. 2)haven't quite figured out how the exemptions work. Say for instance on our furniture, a lot of it is wrapped up in a loan we got from Small Business Administration for 3% after our house flooded to replace our contents. We still owe almost $7K on it, but we've had all this furniture now for 5 years, will that be sold? And for say our bedroom furniture and our kids, some of it is paid off???? None really new, have had all of it at least 3 years, some longer than that, some as long as 15 years. The details are killing me :( It doesn't look like Missouri has a lot in the way of exemptions.

Link to comment
Share on other sites

I did the calculator and this is what it shows:

Expenses: 4566.76/month

Income: 3701.33/month(averaged)

Daughters ss: 628/month

of course right now we don't put aside money for house maintenance, my tires are bald, etc.....but looks like we are in the hole 237.43 per month if we use their calculator. That is about right because every month we are robbing Peter to pay Paul and have been making mortgage payments like the day before they are late. :? Of course, this DOESN"T include the fee we are paying the dm company as well as the amount we are saving for their settlements with our creditors.

Link to comment
Share on other sites

Hey hatecards! Maybe you can sell the kids to pay off those debts, lol!

Crossed my mind once or twice!

Sorry, just a joke! Know what you are going through, your not alone!

Keep your chin up, you'll get through it all. Advice from a BK attorney I was talking to in my despair; the Creditors can't send you to jail, can't eat you, and if the %$@! do, they'll get heartburn! Judging by your case, Ladynred is right, BK is the answer, and yes, DISCOVER WILL SUE!

If you need some emotional support, I'm here for ya! PM me anytime!

Link to comment
Share on other sites

Hatecrds,

The exemptions go to EQUITY in the house and vehicles.

For personal property, you use GARAGE SALE prices to value you stuff. The wildcard gives head of household an additional $1250 to use for ANY property. So, a 5 yr old sofa that may have cost $1000 then - MIGHT get you $100 in a yard sale - less if its in rough shape. Most people lose NOTHING of their personal property.

As for your ring, you COULD reaffirm, but it may not be necessary. Even though you still have a 4K balance on the loan for it, quite frankly its NOT worth anywhere near what you paid for it and likely not what you owe on it either. The markup in jewelry is horrendous. If you were forced to sell the ring tomorrow morning, you'd be lucky to get $500 for it. Naturally, it has more sentimental value. You could also REDEEM the ring - that means you pay ONLY current market value for it - NOT what you still owe on it.

Reaffirmations must be approved by the BK court. Unless a reaff is required by state law in order to keep the property, you do not HAVE to reaffirm, but as long as you keep paying (which is voluntary) you generally can keep the property. They don't want the ring back, they want the $$$$.

Oh, the SSI your daughter gets is NOT considered your income, its for her and its exempt anyway.

Link to comment
Share on other sites

Hey hatecards! Maybe you can sell the kids to pay off those debts, lol!

Crossed my mind once or twice!

Sorry, just a joke! Know what you are going through, your not alone!

Keep your chin up, you'll get through it all. Advice from a BK attorney I was talking to in my despair; the Creditors can't send you to jail, can't eat you, and if the %$@! do, they'll get heartburn! Judging by your case, Ladynred is right, BK is the answer, and yes, DISCOVER WILL SUE!

If you need some emotional support, I'm here for ya! PM me anytime!

Now there's a thought!!! :twisted: Why didn't I think of that? HA!! I talked to dh last night about seeing some BK attorney's, just to talk to them, he is afraid more of someone he knows or has worked for(he does some side jobs occasionally) finding out. Doesn't want the kids to know, etc.

Link to comment
Share on other sites

Hatecrds,

The exemptions go to EQUITY in the house and vehicles.

For personal property, you use GARAGE SALE prices to value you stuff. The wildcard gives head of household an additional $1250 to use for ANY property. So, a 5 yr old sofa that may have cost $1000 then - MIGHT get you $100 in a yard sale - less if its in rough shape. Most people lose NOTHING of their personal property.

As for your ring, you COULD reaffirm, but it may not be necessary. Even though you still have a 4K balance on the loan for it, quite frankly its NOT worth anywhere near what you paid for it and likely not what you owe on it either. The markup in jewelry is horrendous. If you were forced to sell the ring tomorrow morning, you'd be lucky to get $500 for it. Naturally, it has more sentimental value. You could also REDEEM the ring - that means you pay ONLY current market value for it - NOT what you still owe on it.

Reaffirmations must be approved by the BK court. Unless a reaff is required by state law in order to keep the property, you do not HAVE to reaffirm, but as long as you keep paying (which is voluntary) you generally can keep the property. They don't want the ring back, they want the $$$$.

Oh, the SSI your daughter gets is NOT considered your income, its for her and its exempt anyway.

I looked for our copy of the deed last night and didn't find it, we cleaned our basement out a month or so ago and think it was boxed up somewhere. I'll keep looking. If the deed is written as "tenancy by entirety" what extra kind of protection does that include? For some reason I keep thinking ours is "joint tenancy", but can't remember for sure. I found my tax assessment for last year and it only shows assessed value at $126,000, so if we used that(can we use that), we have no equity in the house whatsoever, we pretty much borrowed against all of what we had two years ago to pay off bills we had then. :roll: it is just a vicious cycle it seems. I did see yesterday afternoon on the MO bankruptcy site that dd's ss was exempt. As for personal property, who figures out how much our stuff is worth(us?), and how do they know what we have? Do they come to our home? I know these questions probably seem dumb, but I don't know anyone who has ever filed bankruptcy and I don't know anything at all about it besides the wealth of information I have found here. I guess even if we did, everyone's situation is different. Do you think Chapter 7 would be the best for us? It's sounding like it to me. I know that if we decide to do this it is going to be a hairy road for a while, but being able to start over new even with a bad credit rap is the light at the end we've maybe been looking for. I have been so stressed from all this and worrying how in the world would we ever send dd to college and then ds, and also worrying about our immediate future. Also, what is required before a court will approve a reaffirmation? And how is current market value decided for say the ring?

Link to comment
Share on other sites

I found my tax assessment for last year and it only shows assessed value at $126,000, so if we used that(can we use that),

Yes, you could use that, it would be very good in fact.

As for personal property, who figures out how much our stuff is worth(us?), and how do they know what we have? Do they come to our home?

YOU figure out what the values are. Go make the rounds of a few garage and yard sales over the weekend, you'll see what things go for.

How do they know what you have ?? Part of the BK schedules you have to fill out is a list of assets, which includes personal property. They do NOT come to your home to check.

Yes, judging from what you've said here, CH 7 would probably work best for you.

As for BK's being published in the local paper, that's not as true as it used to be. Check you paper and see if there are any BK's listed anywhere.

I can understand your DH's worry that 'someone will find out' but really, its no big deal any more. There were over 2 MILLION personal BK filings last year. I'd be willing to bet that someone he knows filed for BK. The Federal law is there to give people a fresh start, there should be no shame in that and with over 2 million filings, you are FAR from alone ;)

Link to comment
Share on other sites

Just a thought. If you are worried about anyone seeing that you have filed for BK, it will appear in your local paper.

:oops: well, I guess if they see it they see it, if we file, does it get filed in our county if we see an attorney outside of our county? WOuld hate for everyone to know, we live in a very small town, but then again, would hate to be on those same street corners asking for food too. :shock:

Link to comment
Share on other sites

Lady~~thanks so much for all the information you have provided for me...you have no idea how MUCH I appreciate it.

I have some more questions. :?::? please .... My name is on dd title to her car along with hers(she is not of legal age yet, 16). It was left to her by my Grandfather, clear title. Is a 1994 Ford Tempo, so know it isn't worth much, but where will that figure into our bankruptcy if we file? Also, I have a 401K at work, have already borrowed as much allowed from it to help pay bills about 8 months ago, but there is roughly $10K in it now, how does this fit into it? I couldn't find anything on the exemptions list about 401K's. Also have $ held out of my paycheck for a christmas club account at a credit union, which also only has about $75 in it right now because I had to withdraw to make the house payment last month. Should I stop the payments from being withheld from my check? We had a tractor that we sold last month also to make payments, if we were to file soon, would that $ be held against us? We actually lost about $2K in selling it, but we had to to make the payments. We have 4 life insurance policies, two whole life, but both have loans against them with no available cash out value.... what about those? and....very last, ds has a cd in his name and mine worth $1200., due to mature next August, is this mine also? if so how does it fit into our exemptions? ok, I think I bled my brain dry....

Link to comment
Share on other sites

  • 4 weeks later...

Just a thought...where do they list BK in the paper?

I am not a regular newspaper reader,and im sure the ones "looking" to see who filed BK are the ones looking to pounce with new CC offers...anyhow..the chances of anyone you know in your area actually seeing your name in the paper by chance is remote in my opinion...next day,its in the trash,so I would let that aspect of it bother you at all.

Link to comment
Share on other sites

Guest
This topic is now closed to further replies.
 Share

×
×
  • Create New...

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.. For more information, please see our Privacy Policy and Terms of Use.