azheat480 Posted December 28, 2007 Report Share Posted December 28, 2007 Hello to all! I am new to this forum and to my current financial situation...I would appreciate as much input as possible from all of you. Here is my deal: Married - I am working full time ($43K/yr) and he is in the process of re-starting his business. (same old story - he went thru a divorce and it takes him some time to recover). Anyway. So he does not have any income at this time. We have a home ($450K), one leased car ($600/mo), one car purchase ($650/mo) and $5000 in the bank. That's it. No other resources. I have been drawing on some money I had from an inheritance so far. Our debt is $36K in CC and a home equity line of $60K (maxed out). My FICO score is 580 (Transunion) and I do not have the other scores available at this time. I am pretty devistated about this situation. Of course I was supportive to my husband hoping the business would work out from one month to the next. I am at the end of my rope now and don't know what to do. Credit counseling? BK 7 or BK 13? Skip the country? Try to sell the house? Or rent the house out until the market changes and we are renting a small apt somewhere in Phx? I am 35 days behind on my mortgage and so far I was able to keep my other bills current. But the writing is on the wall. My husband has a few CC that are over 30 days behind, but they are small balances (total of $2500). The house in in my name, so are the cars. Nothing really belongs to my husband, but we are in a community property state. By the way, I am not here to "dog" my better half at all. But I am angry and I have never been in a situation like this before in my life. He is in the process of interviewing for jobs at the moment.If the best route for us is credit counsling, can somebody from AZ recommend a company to us? As I mentioned in the beginning, and I am really happy that I have found this forum, and I am hoping to get some answers before I make a wrong decision. Thanks again! Link to comment Share on other sites More sharing options...
razr Posted December 28, 2007 Report Share Posted December 28, 2007 If you have assets you want to protect (the house, cars) then consider Chapter 13. However, you have deep negative cash flow, over $100K in unsecured debt, + cars and mortgage (which I assume is more than the house is worth). Taxes and insurance...blah. Are you realistically ever going to pay that off? Even catch up? No amount of credit counseling is going to help you. At this point you take home $6-$700 a week?Personally, I'd take the $5k out of the bank and stuff it under my pillow. Stop paying everything for a month or two and run to a BK attorney.I was in a similar situation. I had great credit all my life, but got in way over my head. My business went under and I had no chance of ever paying back the money I owed. I tried my damnedest for years, but finally I just filed for BK (2003). It was a good decision for me.-r Link to comment Share on other sites More sharing options...
Methuss Posted December 28, 2007 Report Share Posted December 28, 2007 I agree with Razr, mostly. Get your cash out of the bank and hide it (from your husband too!!!)Not to put too fine a point on this, but if he has been in business before he should know that all business start ups have negative cash flow for at least a year and usually as many as three. It is also in every start-your-own-business resource in the world that you have to have 12 months of living expenses set aside before you even consider starting a business of your own. If he didn't tell you this, he either didn't do his homework or there is an honesty problem.Your cash flow is so far negative that you are not going to qualify for a chapter 13. You don't make enough to cover the mortgages plus taxes along with regular household expenses. I don't believe you have enough income to keep the house even if all other debt is discharged. My calcualtions indicate that your $450k house is about $3500 a month in just principal and interest with a blended rate of only 7.75% (which may be lower than what you really have). A $43k income won't cover that.Get a bankruptcy lawyer now. Since nothing is in your husband's name there is no point filing jointly as he won't add any real exemptions to your petition to help you keep any property. Those expensive cars will definately have to go and be replaced by a 'beater' after your discharge -- at least until your husband has regular employment. Then his income needs to go to savings to buy a better car. I'm betting his credit is far worse than yours given your description. Have you seen his report yet? Whose credit recover first if you have a chapter 7 discharge?I also suggest you see a counselor. This is going to be hard on your relationship since it is clear your husband torpedoed the finances chasing an ill-conceived business plan. Link to comment Share on other sites More sharing options...
gypsie Posted December 28, 2007 Report Share Posted December 28, 2007 Credit counseling will do you no good at this point, marriage counseling on the other hand....but you need money for that and you don't have any- because you're going to hide that savings, right? Take the advice offered above before your financial situation ruins your marriage too. Just by the tone of your post your harboring some resentment towards your husband and it's only going to get worse. I speak from past experience- where I had an ex with his "own business" that went nowhere and BK'd me as I worked myself to death to attempt to keep things paid for. Chap 7 looks like your only way, I hope you're looking for a BK lawyer before the weekend is here.good luck Link to comment Share on other sites More sharing options...
Methuss Posted December 29, 2007 Report Share Posted December 29, 2007 Credit counseling will do you no good at this point, marriage counseling on the other hand....but you need money for that ...Not necessarily. Counseling from a local church is usually free; even if you are not a member. Link to comment Share on other sites More sharing options...
LadynRed Posted December 29, 2007 Report Share Posted December 29, 2007 While the idea of 'hiding' that savings sounds good, it's a bad move if you're going for bankruptcy. The lawyer and your trustee will want to see 6 months to 1 year of bank statements and the withdrawal of that savings will jump out - and they'll want to know where that money went. Since the AZ exemptions won't cover that amount of cash, you'd be better off using it for NECESSARY expenses NOW, document everything you spend it on too. Make sure that you give all the details to a BK lawyer.In your shoes, I'd definitely be seeing a BK lawyer ASAP before the foreclosure notices start showing up. Link to comment Share on other sites More sharing options...
Methuss Posted January 2, 2008 Report Share Posted January 2, 2008 While the idea of 'hiding' that savings sounds good, it's a bad move if you're going for bankruptcy. The lawyer and your trustee will want to see 6 months to 1 year of bank statements and the withdrawal of that savings will jump out - and they'll want to know where that money went. Since the AZ exemptions won't cover that amount of cash, you'd be better off using it for NECESSARY expenses NOW, document everything you spend it on too. Make sure that you give all the details to a BK lawyer.In your shoes, I'd definitely be seeing a BK lawyer ASAP before the foreclosure notices start showing up.To be clear, the purpose of hiding the money is not to hide it from the trustee. It is to keep the husband from spending it.. About half of it will have to go toward bankruptcy/attorney costs. Link to comment Share on other sites More sharing options...
LadynRed Posted January 4, 2008 Report Share Posted January 4, 2008 I understood it was to keep it way from the husband, I just wanted to raise the caution flag as such a withdrawal would be noticed and an accounting required. Link to comment Share on other sites More sharing options...
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