BigShotNoMore Posted October 8, 2008 Report Share Posted October 8, 2008 This is a great forum. Glad to now be part of it. Here is the position I now find myself in::drowning:::*massive income drop(I am in the financial sector)400k annualized Jan-June, now near non existent*Family of 5 with 3 kids in private school, 3 car payments, 2 mortgages*165,000 of unsecured debt $5,0000 in minimum payments) which I have paid on time faithfully for years*Million dollar + Home with large adjustable mortgage which fortunately has 7 1/2% annual payment cap but which does feature negative amortization(currently 3k monthly. Digging quite a hole). Also have a 2nd. Home value now about the same as the loans at just over 1 mill.For years my income supported the lifestyle, but we found ourselves falling short as changes in my industry began choking off my income pipeline, which led to credit lines, cash advances and cash out refinances. We also had a family member in trouble who we helped a bit too much. Now the market has collapsed and investments are not flowing. Here's the dilemma. While my faith and constitution are fundamentally against BK, I find currently without the income there may be no other choice. I can switch positions into a field where I have exec experience but that will likely pay only 150k which is not enough to prevent a drowning with my $18,000 monthly nut. If I go BK , and sell a vehicle I can knock down expenses by $6k monthy and hold the house until the market recovers and I am not upsidedown. Then I can sell and downsize and probably cut the nut from $12k to 10K. I would like to get the bills below 6 or 8k but that is tough with the current home being a little underwater and the costs associated with that still in play. My preliminary discussion with a local attorney's office said they are not sure I can pass the means test for Chap 7 unless I wait until December or January.to file since my 6 mos average income is still too high. They also told me that I can possible keep the kids in their private school(very important to us), and keep the cars we have if we desire as they are either leased or are upside down. Lastly is it much better to BK before you have all the 30's, 60, and 90 day late hits. In my case if I have to wait for the means test to work the hits will be coming quickly. Should I pay anything if I am proceeding with a Chap 7? If it is turned down, Chap 13 may be the only choice, but I am not sure I like that idea. Maybe a CCCS approach is better if 13 is the only option. I realize I made mistakes, and assumed I could always make the big bucks, but have hit a sudden brick wall with this market/credit crisis. What do you guys and gals think about how to best unwind this mess going forward:confused:?? Thanks for your input. Link to comment Share on other sites More sharing options...
Recovering Attorney Posted October 8, 2008 Report Share Posted October 8, 2008 sent you a private message with some tips Link to comment Share on other sites More sharing options...
tommy32 Posted October 8, 2008 Report Share Posted October 8, 2008 sent you a private message with some tipsIf you can get a position making 150K year, I think you would be ok IF you put your kids in regular school instead of private school, sell your second house if you don't use it, get rid of 2 of the 3 cars, keep the one that would fit your family needs the most, YOU Need to TRIM THE FAT like I am sure you have done before working as a high up for a bussiness when times are tough they usually lay off, fire, force people into retirement etc., .....I know that private school is important but right you need to stay afloat. In my opinion there is nothing wrong with public schools...Yeah they have their differences but if you want to save your self from Bk and the world of crap credit you need to do what is best for the whole family as a whole...Oh and stop helping the other family member out...you need to focus on your own issues and financial problems. If you made the big bones for years and years I am sure when this crisis is over you will get the oppertunity again. Good luck... Link to comment Share on other sites More sharing options...
Denita Posted October 8, 2008 Report Share Posted October 8, 2008 BigShotNoMore, I am in a similar position to you. Was making 300k plus/yr, now this year virtually zero income (YTD $60k). Two houses, mtg's totalling over $1M, other debt about 140k and two kids in collage. When the slide starts - the bottom comes awfully fast. I never thought I would have to file BK - but when the income drops out, it is the only thing that can save you. Make sure you do not wait too long to file - you are not trying to beat the system. If there is no income (relative to your expenses) then this is the way to start fresh. Make your budget cuts - then go back and cut again. Look at the stickys here in the BK forum for excellent info on what is allowed. If you were incorporated there are a few things that can be a surprize (like all of your receivables belong to the trustee!!). I have to say, the hard part is actually making the decision. Before I decided, I made quite a few 'wrong moves' trying to save everything. Don't wipe yourself out. Interview 3 to 4 BK attorneys and ask them the hard questions. Study the stickys first so you know what to ask. Link to comment Share on other sites More sharing options...
Methuss Posted October 8, 2008 Report Share Posted October 8, 2008 Before I decided, I made quite a few 'wrong moves' trying to save everything. Don't wipe yourself out. I did the same thing and it cost me $30k over 4 months that I would otherwise have been able to keep post BK. Don't try to keep the Titanic from sinking...it won't stop...it will just take longer and be more painful. But by the same token, don't make a bad move just for the sake of speed. Sit down and really crunch the numbers. You have to do so with the income and expenses you have now, not what you hope for. The future is not guaranteed. You may find yourself delivering pizzas for a while insted of chairing an executive committee. I'm not trying to be hard on you, I'm just stating the facts. So do the due dilligence and make a decision based on the facts, not emotion. It's the only way to get through situations like this.PM if you want me to shae some of the personal finance forms I use, such as the zero-based cash flow plan. Link to comment Share on other sites More sharing options...
BigShotNoMore Posted November 13, 2008 Author Report Share Posted November 13, 2008 Thanks for all the feedback. I am really trying to avoid BK since it limits my ability to earn in the financial field since the regulators insist that the BK is disclosed and most firms will not allow you to interface with the public and their funds if you are on the edge yourself. I may have to climb out the hard way. Link to comment Share on other sites More sharing options...
ptfmb71 Posted November 19, 2008 Report Share Posted November 19, 2008 I would try your best to avoid BK....since you will have to disclose it on your U4 (if you are in this type of industry)....I would also attempt to get a new employment before your credit is affected (as a new employer will check your credit)I understand the issue and you need to realize that nobody (and I mean nobody) really cares what type of car you drive or what type of house you live in (and if they do then they have problems).Prioritize what is most important first (school, ect). Have you thought about renting your 2nd home? (at least to produce some income). Trust me you are not the only one in this situation Link to comment Share on other sites More sharing options...
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