Freddy01

I think BK may be my only option...

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What would you do??

Just did the math and we have about $45,000 in cc debt. Right now we are barely getting by. I was able to set fixed payment plans with all the cards but- 2 have filed suit, 2 are in the DV process and 2 are MIA.

I am starting to think that if either of the 2 suits obtain judgements and wage garnishment it would put a huge strain on our other bills (mortgage and one car payment)

I def want to keep our home (we are a little behind (less than 2 months) - just filed out modification papers 2 weeks ago) we do have one car payment (current) and one car that is paid for. We would need to keep both cars.

With Chapter 7 would we have to sell our househould items?? We don't have much - TV, PS3 (that was a gift to my children). We don't own any other property, boats or cars.

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Check Florida exemptions and compare that to the amount of equity you have in your home and vehicles.

If you do file a chapter 7, then make sure you are current on your mortgage prior to filing. If you are not, the lender may lift the stay and move to foreclose.

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I think you're in the same postion many if us have been in, its a tough decision. But IMO if there is any way to fight, fight. BK should only be a last resort.

From what I'm finding in my own situation, this is turning into a second job - its a lot of work. But I really would like to avoid BK if I can. Not everyone has the stomach for these guys (my wife sure doesnt) and BK may be perceived as a relief. Talk to a few atty's first to get a feel for what you're about to do. BK is not a super simple guaranteed 'get out of debt free card' like some make it appear to be.

That being said, I still need to try a few approaches before I throw in the towel. I may file, but only after I've exhausted all other option completely. If I completely blow it and end up with a dozen judgments against me, well, then maybe it's time to file. But right now I have nothing to lose and until that happens, I'm going to fight. I'm in no hurry with this stuff, they are.

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I may be mistaken, but I believe that they can only garnish a small percentage of your "disposable" income, meaning the money left over after you pay your basic bills, car payment, mortgage, utilities, groceries, etc... That's one of the reasons why it is so important to show up in court if they file a suit against you.

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I may be mistaken, but I believe that they can only garnish a small percentage of your "disposable" income, meaning the money left over after you pay your basic bills, car payment, mortgage, utilities, groceries, etc... That's one of the reasons why it is so important to show up in court if they file a suit against you.

In Florida they can garnish up to 25% of your take home pay. From what I have read it did not state anything about other bills. Please if I'm wrong someone please tell me. I hope I am.

Write now I would be head of household so my wages I could exempt. But my husband's could be on this joint account suit. If it is the 25% it would hurt us with other bills.

I plan on avoiding BK at all cost but if we do end up with multiple judgements I don't think we could afford to stay in our house. :(

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BK is a major decision that must not be made without alot of thought. However do not wait until the last minute and then file BK to Keep the house of cards from falling.

I have read alot and believe that how you enter BK is more important than the process itself. In other words plan your BK!

I believe the Exemptions for a married couple in Florida without a homestead exemption are roughly:

1k personal property

1k vehicle exemption

4k wildcard exemption (if not claiming a homestead exemption)

2k personal property exemption"

I believe these exemptions can be bundled so you have roughly 8k to protect the paid for car and personal property. Alot depends on the value of the house and car versus what you owe on them.

For planning purposes:

1. talk to at least 2 lawyers preferably 3

2. Evaluate what they tell you and plan from there.

3. If you decide to move forward, stop paying all unsecured bills and catch up on the house. Stay current on the car. Keep your saved money in the mattress and save up money to pay the attorney and for emergancies after you file.

4. Get all the paperwork together and work with the selected attorney to get everything ready to file. Then keep saving money without filing until a judgement is close and then file.

It is difficult decision to make and nerve racking no matter what you do. Remember the important things are keeping Food, Clothing, and shelter for your family. When your ability to provide these basics are endangered, then it is not a personal decision, it is a business decision.

Good luck!

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Wow, Rick9972! I'm sure that the information you provided the OP will be most helpful. And I couldn't agree more with that last paragraph

It is difficult decision to make and nerve racking no matter what you do. Remember the important things are keeping Food, Clothing, and shelter for your family. When your ability to provide these basics are endangered, then it is not a personal decision, it is a business decision.

DH and I went thru BK nearly 15 years ago, and we didn't have a clue. We lost everything... a car, our home... we had to farm our boxed belongings and our pets out to anyone who had room to take some of it and store it for us. Having to live off the generosity of friends and family for nearly 8 months, including our son, was one of the most humbling experiences of my life. If I'd had a place like CIC even 6 months prior to the BK... things might have been alot different.

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Most people stay a little too focused on chapter 7 bankruptcy. OP may be a candidate for chapter 13.

If OP can make the payments on the secured property with as little as $100 left over for unsecured payments then this may work and let them keep the house and both cars.

Also, it seems like the house may be underwater from the mention of being behind on the payments there. If that is the case there is also an opportunity to jettison any secondary liens on the house if the house is worth less than what is owed on the first mortgage. That means a second mortgage holder gets their lein stripped and gets reclassified as an unsecured creditor. In Florida, where the 80/20 was rampant, and property values have dropped so much, nearly all second mortgages are wholly unsecured by the property.

In practice, you pay your plan for 3 to 5 years, keep the house and cars, and the second mortgage gets wiped out along with all the credit cards and other unsecured debt.

It is worth discussing with an attorney for this option if it suits. But be forewarned, an attorney handling this will need to be paid a bit more because the secondary mortgage holder will fight like hell to keep from getting their lein stripped; and that means court time for the attorney.

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Look at this link to get an idea of the exemptions http://www.legalconsumer.com/bankruptcy/state_bankruptcy_info.php?st_fullName=Florida

Planning your BK is extremely important. Exemption planning is not as easy as it sounds, that is why a good BK attorney is essential. Sometimes the Ch 13 is the better way to go depending upon your specific circumstances. Interview BK attorney's to make sure they know what they are doing in your type of case. In general, stay away from the BK mill type attorney unless you have no assets and an extremely simple case.

Don't wait to the last minute. Don't drain your retirement accounts (401k's etc) in hopes that things will turn around. If you wait until your back is against the wall you will have a more difficult time in the BK and recovering from the BK. BK is a viable business solution and should not be the 'last resort'. It is a financial tool to help you get back on your feet.

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Don't drain your retirement accounts (401k's etc) in hopes that things will turn around.

Good point: The US Supreme Court ruled a few years ago that retirement accounts are totally off limits to all creditors even in bankruptcy. As long as the cash is still in a 401k or IRA even the bankruptcy court trustee cannot touch it. But once that cash is pulled loose from the retirement account, it is fair game to creditors.

So NEVER touch your retirement funds.

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Thanks for all the response. Great info provided.

I was lucky to have worked w/ my mortgage co to put the 2 late payments on the back of the loan. So in August I will be current.

I have a court date for one of the creditor lawsuits I'm currently fighting. So I will see how that goes before I retain a BK attorney.

I don't have assets other than househould stuff and one 8 yr car that is pd for so my possible BK shouldn't be to hard. I have called a few attorneys and they all said I should be able to keep both cars with out any problems.

Thanks again!

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