Not sure what to do or plan to do? Future uncertain??

[scottfree]

I have been looking everywhere for what is in store for me in the next few months and have had no luck finding answers. Soo, thought I would just post and see what responses I get if any that can help me see what may or may not happen.

Home mortgage- 1st $1300 month 2nd $690 month

Car payment - $265 month

Credit Cards - $60,000

1. I am in sales and income was cut out of the blue by over 80% until November.

2. The IRS has taken all my accounts and cleaned them out just a month ago. (only about $3500) I have been trying to get this resolved for some time and believe that I will come out fine in the end but it is going to take at least another month probably longer to be realistic.

3. I am now behind one month and soon to be 2 months on my mortgage, and 1 month car payment, and a month now on 8 ccards. I have just enough money to get food, gasoline and pay utilities for about 2 months (hopefully).

4. I was at the brink of trouble to start with before the IRS and income was hit and am starting to get 6 calls a day from creditors.

I do believe that I will get back on my feet in about 2 to 3 months, but will not be able to catch up on bills and have talked to a BK attorney. I have also gone to credit counselor. I tried to lower Credit Card % but they won't consider it because I had a great credit rating but now am paying 24 to 32% interest rate and cards are maxed. I had paid off 2 CCards, one being B of A with a balance of 20k with a 25k limit and then they dropped it to a $1000 limit and within a few months all started raising rates and now even if I call to lower them, I can't pay probably untill Jan. and then maybe enough to keep them from going into default.

What do I do until I know what is going to happen with my income?

Ignore calls? And if I do what can I look forward to?

Right now my priorities are to keep my family eating, pay utilities, and talk to my mortgage company to let them know my situation.

Can there be any light at the end of the tunnel? Lost?

[brokeinok]

Deal with the mortgage and the car first... the others can wait.

Above all, call the mortgage company right now, today and tell them what is going on. Many have programs you may qualify for, especially if this is only a temporary situation. Call about your car next, depending on who has the note, they will repossess after 45 days late.

Once you have that under control, then go back to the credit cards. Call them again, if they say no then ask for a supervisor. Be nice, be pleasant and don't lose your cool. Keep at it, I know that some will work with you and some don't care!

At least you've recognized the problem and are taking steps to fix it.

[samuelson2005]

You might wanna check out this thread also, as you have some serious cc debt.

http://debt-consolidation-credit-repair-service.com/forums/showthread.php?t=273669

[scottfree]

Deal with the mortgage and the car first... the others can wait.

Above all, call the mortgage company right now, today and tell them what is going on. Many have programs you may qualify for, especially if this is only a temporary situation. Call about your car next, depending on who has the note, they will repossess after 45 days late.

Once you have that under control, then go back to the credit cards. Call them again, if they say no then ask for a supervisor. Be nice, be pleasant and don't lose your cool. Keep at it, I know that some will work with you and some don't care!

At least you've recognized the problem and are taking steps to fix it.

Thanks for the suggestions, I called First Horizon (home mortgage) and they are sending a package that I need to send back with some info and my situation. They will attempt to see if there is something that can be worked out to keep the house from going into foreclosure. They were very nice.

Now the car payment, I got a call from them today (a message). I am going to pay last months so I can try and keep my transportation. I wish I could trade the car in for a smaller vehicle that gets better gas mileage and is worth less to get a lower monthly payment. Don't think that will work, I think I would have to sell it outright then get another loan to get the smaller car.

As far as the CCards, I might as well answer the phone and tell them I can't pay because...blah blah and see if maybe the calls slow down.

Looking at the next post, I think I do need to file BK and at least keep the house...

Sure wish I knew how this was going to work out, anyone have a crystal ball?

[brokeinok]

Methuss just posted this on another thread where we were discussing bankruptcy....

____________________________________________________________

The threat of bankruptcy can sometimes get the ball rolling with stubborn credit card companies.

Also, keep in mind the level 1 phone monkey usually has no authority to change your payment terms. Even the supervisor at that level will likely have no ability to change your terms.

No...if you want results you usually have to go up the ladder several levels before you get to someone who can actually help. Sometimes asking for "loss mitigation" will get you to the right person in the beginning. The fact is every lender has a loss mitigation department/rep, but they hide them under many layers of bull-crud...after all, if it was easy to negotiate your terms down then everyone would be doing it.

I usually suggest writing to the credit card company attention to their loss mitigation department and let them know that your debt with them has become unmanageable and that unless you can reach an agreement with them on a repayment plan that you can afford, you will have to file for bankruptcy protection. If you indicate that in bankruptcy there would be little money left over for unsecured claims, that will usually get their attention (and cooperation).

_________________________________________________________

I say follow his advice and call the credit card companies and see what happens, worse they can do is say no. I did have one card that reduced interest, stopped late fees and I was able to pay it off over about a year.

Couldn't hurt....

[Methuss]

All I can say to this one is get bankruptcy protection as soon as possible. $60,000 in unsecured credit card debt is a no-win situation. You would have to be able to put about $1000 a month just toward the principal to pay this off in 5 years. And your credit rating will still suck. Bankruptcy will hurt for about 2 years then it's effects lessen with time, even while it is on your reports.

I have said this before and I will say it again. There is no shame in bankruptcy. Stuff happens, and income loss is the number one reason why people do file bankruptcy.

Bankruptcy is a concept from the Bible (Deuteronomy 15.1: "In the 7th year, each creditor shall release his debtors. This shall be known as The Lord's Release.") and is in the US Constitution even before freedom of the press. The only people that want you to be ashamed are the lenders because it is in their interest to wring every bit out of you.

Just make sure you are not in this position because of fraud. If you took out a lot of this credit card debt recently you may have to let those slide for a few months to avoid getting dinged for it. Just concentrate on your mortgage, car and living expenses and get a BK lawyer on retainer. If things get better, you can always withdraw your bankruptcy petition, but for now, you need to get them off your back so you can concentrate on your income challenge.

[Outtadebt4good]

I think get thee to a bankruptcy attorney, now. Get filed, reaffirm your house and car (scale down the car like you said) - lose the unsecured credit card debt. Your situation sounds like mine was. BK turned out to be the best thing I'd ever done - wish I had filed years ago. With 60K credit card debt, I bet you're going to have to BK eventually anyways. Sooner you can start rebuilding your financial life the better. If I got thru it, you can too!

[samuelson2005]

True dat Methuss!

There is life after BK. And sometimes going through BK is a good thing. I know that I no longer bite off more than I can chew. Don't want to go through that again.

[scottfree]

All I can say to this one is get bankruptcy protection as soon as possible. $60,000 in unsecured credit card debt is a no-win situation. You would have to be able to put about $1000 a month just toward the principal to pay this off in 5 years. And your credit rating will still suck. Bankruptcy will hurt for about 2 years then it's effects lessen with time, even while it is on your reports.

I have said this before and I will say it again. There is no shame in bankruptcy. Stuff happens, and income loss is the number one reason why people do file bankruptcy.

Bankruptcy is a concept from the Bible (Deuteronomy 15.1: "In the 7th year, each creditor shall release his debtors. This shall be known as The Lord's Release.") and is in the US Constitution even before freedom of the press. The only people that want you to be ashamed are the lenders because it is in their interest to wring every bit out of you.

Just make sure you are not in this position because of fraud. If you took out a lot of this credit card debt recently you may have to let those slide for a few months to avoid getting dinged for it. Just concentrate on your mortgage, car and living expenses and get a BK lawyer on retainer. If things get better, you can always withdraw your bankruptcy petition, but for now, you need to get them off your back so you can concentrate on your income challenge.

It looks to me as I am going to have no choice but bankruptcy. The thing is now I am almost looking forward to it. I have managed to keep the lights on and feed the family but now it seems that my wife has decided that we should get a divorce. To tell you the truth that something that has been coming for a couple of years..not getting into details... I also have been dealing with the IRS and that is coming close to what at this time looks like I will come out alright and they would have wasted a lot of time harrasing me. Well before I keep rambling on.......

The question I have is on timing. Right now I am barely making any money and I am thinking that I will be filing BK in about 3 weeks. I think 7 but may be a 13. The thing I wonder about is that it looks like starting near the end of Nov. thru March I could make some good money, then it will slow again until this time again next year. I hope it is about $80,000 or more. I am not going to not work so that I can lose this debt, but with all that is going on I feel if I don't do this now, well I don't know how I can keep in this cycle.

Will me making this kind of money affect the process? I have not calle and talked to my BK lawyer in a month becauce my IRS situation so thought I would ask here , don't know if I get charged for calls??

I will be 50 next year and this past 6 months has really sucked. Thank God for my kids, they have kept me from going insane and know that things are going on. Sad thing is my daughter graduates this spring and I have to get out of this rut and help her however I can. I also have a 15 yr old son who is great. I hope that by this time I can look back and just think "wow, I made it"

I think get thee to a bankruptcy attorney, now. Get filed, reaffirm your house and car (scale down the car like you said) - lose the unsecured credit card debt. Your situation sounds like mine was. BK turned out to be the best thing I'd ever done - wish I had filed years ago. With 60K credit card debt, I bet you're going to have to BK eventually anyways. Sooner you can start rebuilding your financial life the better. If I got thru it, you can too!

At this time with a divorce eminent, and my homes value now at about 240,000 with a $170k first ($1300 mon)and a 60k($690 Mon) second I really don't care about the house. I don't think that without about 10k in repairs I could even get the $240k.

I guess time will tell, just seems like it is just creeping along.

Thanks for any comments.. Scott

[LadynRed]

Your income for BK will be calculated based on the last 6 months. Your increase in income will likely be considered in a Ch 13. The figure for what you pay, even in a Ch13, is DISPOSABLE INCOME. In order to get paid, your creditors have to file a proof of claim, no claim, no payments. Not all creditors will file a POC, so it's hard to calculate what you're payments will actually be. If your income goes up, your payments may go up.

With 60K in cc debt, you need to see a bk attorney and get it all out on the table.

[scottfree]

Your income for BK will be calculated based on the last 6 months. Your increase in income will likely be considered in a Ch 13. The figure for what you pay, even in a Ch13, is DISPOSABLE INCOME. In order to get paid, your creditors have to file a proof of claim, no claim, no payments. Not all creditors will file a POC, so it's hard to calculate what you're payments will actually be. If your income goes up, your payments may go up.

With 60K in cc debt, you need to see a bk attorney and get it all out on the table.

Thanks for the reply. I imagine that I will also need to mention that I owe my father in law 50,000 that I am supposed to be paying 1000 a month. Wish I hadn't borrowed this money, all it did was delay the inevitable.

[willingtocope]

Well (looking for the silver lining, here) if he's your soon to be ex-father-in-law, and you're not too broken up over that, the good news is...he can be included in the BK 7 also.

Really...stuff happens. Most of its because of things beyond our control and even when we do have a choice what sounded like a good idea at the time sometimes isn't.

Go see a BK attorney now...