When to file bankruptcy?

Re: GOOD WORK Touchdown ....

Will MBNA and FUSA lower the interest rates? Your AT&T and U.S. Bank are great rates. This will help decrease the minimum payment due to each if each company will consider it. Don't tell them you can only make the minimum just tell them you have been with them a long time (however long) and am a good paying customer. See what they say.

Dani

 

Re: GOOD WORK Touchdown ....

Okay, this is what I have come up with. With the min. payment inserted from your last post. I have you in the red by $53 each month.

Since we can't squeeze anymore out of your income we can either transfer money around or decrease some costs.

How much longer will you be paying on the Marshall Fields and Cap One accounts. The minimum payment is relatively low so I am guessing $600-800 on each at the most.

Suggestions: (just use the ones you like, the others completely disregard).

o Do you have any available credit on the low rate cars - eg. could you transfer some of FUSA or MBNA's balance to AT&T or U.S. Bank

o Would any of the CCs be willing to extend a credit line increase

o Are any of the CCs offering a low rate right now - sometimes they offer 5.9% or 7.9% for six months.

o Would your parents and Grandma be willing to half their payment until you get either Cap One or Marshall Fields paid off. Full payments would resume again, afterwards.

o Looking at your Internet cost it looks like you have DSL (not sure if this right though) would you be willing to downgrade for awhile?

o Auto/condo insurance - have you shopped around for better rates (don't let them pull a report). I don't know what state you are in, but in the Mid Atlantic we have Erie and their rates are super. I saved $700 a year after pulling my husband's insurance from State Farm.

o Use coupons for food/necessities. It takes an hour or two during the weekend, but it can save $20 on groceries each week.

o Would you be willing to sale one of the cars and downgrade to a cheaper model? Is public transportation offered in your area?

o Whatever you don't use for haircuts or dr. visits each month add to the CC bills.

My suggestion for paying off debt (if that is what you decide to do) is snowball it. Focus on paying off one debt first. Once that is paid off add that to the 2nd debt + the minimum payment that you were already paying. Once that is paid add the payment to the 3rd debt + the min. payment you were sending, and so on.

Really, it looks like you're doing the best you can. The killer is those credit cards.

You mentioned a 401(K) plan. I rarely suggest this, except for major matters, but would it be feasible to pull out $1-2K to pay off the two lowest CCs (I believe that would be Cap One & Marshalls)? If you have both of these paid off you could add the $60 that you were paying to the next largest credit card.

Some of my suggestions are drastic and will not fit your needs. I was just trying to offer up anything that came to mind.

Hope this helps and best of luck.

Dani

You probably have already done this, but if you haven't...TEAR UP THE CARDS.

 

Re: GOOD WORK Touchdown ....

Normally speaking, I usually advise BK for most of the people who post,however, here I cannot in good conscience do that.

The ones who need BK are those who life has dealt a blow, illness, business failure, divorce, job loss etc.In your case, it seems that you have indulged yourselves with cars and purchases that you could not afford.

It will do you no good to try and get a home and then try to declare BK, in my opinion,as no BK court in their right mind is going to allow you to do ch7, even BEFORE the law changes.

Your best bet, for your future, in my opinion, is to tighten your belts, stay cramped in your condo, cut down on your expenses and extras- and if you have borrowed from family members, understand that the best long term repayment for them would be to see you not needing their help again.

 

Re: GOOD WORK Touchdown ....

Why not sell both the cars and get some cheaper form of transportation? You mention that your transportation costs are about $900/month. Seems like a lot to me.. Why not get a couple of used Hondas for around 4-5K each.

Why did you buy the 23K GM car earlier this year when you had all the debt? Doesn't really make sense to me.

 

Re: GOOD WORK Touchdown ....

Touchdown - very good point about the cars....
I know!!! I did the MAJOR EXPENSE because I have no debts or family....and I wanted the car - I get one every 10 years LOL!

What you are already seeing is that you and yours have LOTS of open options.

Are you current on everything? If so, then why the rush - let's find a way for you to get out of debt then into your new home - while keeping everything in tact.

READY?

aarrf - dogman

 

Re: GOOD WORK Touchdown ....

ONE EVERY TEN YEARS???

So it's time to get a new car???

My 79 OLDSMOBILE DELTA 88 4 DOOR "BOAT" or "TANK" would miss me!!!

 

Hi GEORGE......

Every 10 years. I will pay off this AUDI A4 quickly - as I have the cash. But then I keep it insured to the MAX and garaged, like the Maxima, and my Integra, and my Z28 before.....

I wish I could have kept interest in my SIGNIFICANT OTHERS for as long a period - AROOOOOOOO!!!!

Its fun to imagine what my upgrade will be after the A4. This is a fantastic luxury sport sedan for an expensive but reasonable price. I think I will finally do a full tilt Porsche.

Geez, lets see - tradein for A4 in 2012 - $10,000
New Porsche in 2012 - Carrera w/ sunroof - $250K
Hmmm - 500 months @???


aarrfff - dogman

 

Re: Hi GEORGE......

You can have my brother's PORSCHE...it's in WHITTIER in the driveway (he moved to GA)...MOM wants it GONE...

It's NOT new...but it's MIGHT BE FREE if mom talks to ya'

 

Re: viability of bk......

Touchdown-
While I agree with WhyChat in principle I do not agree with him on the legalities of this issue. It does seem like you and yours have done some high-flyin' living here but what's done is done. I am sure you have learned or are learning your lesson as we speak. Now that you both have to be grownups because you are responsible for another human being it will behoove you to learn a lesson from this.

My opinion on the viability of you filing a 13 is that you certainly can....even after you sell the condo and buy a new home. In a 13 the trustee will only be concerned if it seems like "fraudelent conveyance"...if the difference in housing costs is a mere $100 then I don't see a problem here. Your biggest problem is time....as the bk reform act is heating up and could get passed while you're waiting to sell your condo. After that the rules will change substantially. After filing a bk 13 you cannot acquire more than $250 in credit withouth the permission of the bk trustee.

The main thrust of the 13 "wage earner" plan is to force your creditors into a payment plan you can manage and still pay your expenses. Given your incomes you could be forced into a 5 year plan in order to pay the majority of that cc debt. As for you filing separately...you can certainly do that but the bk trustee will take into account your wife's income in determining your payment of "fair share". If all the credit debt is in your name only this might be viable but you will be paying more of your income into a plan than if you filed jointly. It is best to consult with an atty and have him prepare it both ways to see which would be better for you.

I think you need to have your priorities straight here as well...your family comes first and then your cc debt. So pay them last after you pay everything that is necessary to keep that baby fed and housed and clothed. If you really need that new home than I would just take the risk and do what you have to do. Of course that will mean keeping those cc payments current even if you are pre-approved they will do another credit check before they give you a mortgage. Of course I am surprised given your incomes and % of cc utlization that you were even pre-approved at all...but wonders never cease.

Hope this helps,

clc

 

Re: viability of bk......

I may have missed it in the original post, but I thought he was going to try for a ch 7.

 

Wow-- before I would consider filing bankruptcy and having to live with that ding on my credit for ten years I would think about items that you could potentially shave down the expenses. For example, your GMAC transportation is over 500.00 per month. If most of your credit cards are about 175.00 a month this truck/car is worth about 3 or four cards per month. Money you could have back not to mention what you would save in insurance (assuming since the price of the car/truck is more than there would probably be additional savings in insurance as well).

Case in point, I just bought a "new" car (new to me but used). A VW in IMMACULATE condition, a 1998, with only 43k miles on it. I bought the car off of someone who bought it off of the lease. My car payments with 6.5% interest is only 138.00 a month.

This car is better than my last car which was over 250.00 a month. My insuance to carry two cars (I paid off of the old car and gave it to my mother since she has a lien on her record right now while she was disabled) is only 10.00 more per six months.

 

I agree with most posters. I think what you should first concentrate on doing is to pull down the credit card balances and start paying them off.

I think what unnerves me most about your current predicament is that you have absolutely no margin for error. Since you put daycare within your budget and you mentioned expanding family-- then I am assuming that you are expecting another child and already have one. The totals you put for medical, health care, is only about $10.00. You mentioned you pay nothing for health insurance, but I am sure your insurances does not cover everything. So assuming that everyone stays well and do not require prescriptions, costly visits, etc etc. Plus for car maintenance you say only 10.00-- other things can happen which are not affected by warranties etc etc.

I guess my concern is because I lived like this for a couple years. My income was not at all similar to your wife's and your own, but the stretch was just as hard for me.. and things can happen and usually happen at times which you can not easily afford-- for the longest time i was never behind a credit card payment-- and then I experienced the snow ball effect.

My recs are to somehow find a way to pay off your debt. It sounds like to me you are struggling to get money and move money around and around and around-- you mention you have already taken out a home equity loan, you show you are borrowing money from your 401k, your parents, and your grandmother.

I think like one poster said.. you may need to really analyze what you are spending your money on and what is worth it.

My problems came from college and I spent the money I borrowed and made. I went on trips to Europe every year, I bought a new 1k saddle, spent most of my days riding horses, travelling, going out, etc etc. I constantly had to struggle to pay peter, paul, and mary. My mother lived with me while also going back to school and had a devestating accident which put me into the position of having to maintain the roof over our heads. My credit went to hell. I never had any money saved up for a rainy day. And I still spent money foolishly.

To be honest with you, I am going on my fourth year living without a home telephone. I will be able to settle my account with BellSouth finally this august. For one year and half I lived without a telephone. I finally was able to get a prepaid cell phone and then Sprint became a life saver and gave me a prepaid cellphone an dbecause of good payment history converted me to a real account.

I struggle to pay a few bills here and now especially after getting a job making fabolous money and then seeing the market collapse and now making 15k per year less than the previous year.

I lived without cable for three years and finally was able to get a basic account. Let me tell you how humbling it is to beg for another car loan from your credit union so you can give your current car to your mother because her car died and her credit is now in worse shape than your own because of surgery bills from an accident. Or what it is like to have to write a letter and essay about why your credit is so bad and why the credit union should take a new risk on your for another car loan even though you never missed a payment with them.

My mother (she is still finishing up her last semester of college) and I are still feeling repercussions from what happened in 98.

I have lived these years without any credit whatsoever. It was not a question of how to or what to cut out.. it was a necessity. I am now able to recoup my losses and try to get out of this mess.

Long story short-- one poster was absolutely correct. I have LEARNED my lesson. I rue the day I got my first credit card. I welcome the day when I can have ONE credit card in my wallet in case of emergency instead of feeling a panic when a tire blows or when you are stuck in an airport and can not afford to get a hotel room for a flight cancellation.

However, even if you declare bankruptcy (which never even seemed like a realistic idea to me because I have seen what it has done to some of my friends and associates)-- how have your habits which got you into your current situation changed?

You say you will loose too much money on the 23k vehicle you purchased new--- but look at everything else you CAN loose. Have you changed so much from Feb 02 when you bought the vehicle that you will not get yourself into the same situation that you are in now if your debts are wiped clear?

You should come up with a realistic budget and it may not be something you like.. heck we ALL do thins we do not necessarily like. I have lived in the same crap apartment since 97 because I can not afford to move myself nor my mother. Our water is disgusting my water in my kitchen does not even work half of the time-- but for my area I do save rent and live out in the country so I am not living in a bad section of town if I were to move closer to town.

Be wary of just looking for a higher paying job. Right now there are not many hot industries and this is definitely not a candidates or job seekers market. I used to be a technical recruiter. Most of my former clients are now jobless. Most of the companies I have worked for in the past are either bankrupt, closed down, or on hiring freezes/ layoffs. I do not know many people who are moving around for higher paying jobs right now. If you have any tenure with your current companies then remain. There ar enot many hot industries right now. And last employee to be hired is usually the most expendable employee to be let go during a layoff. Job security is muhc better than a blinding jump in the dark.

True, I do not have really any money left over per month because I help my mother out when I can but I live on a very fixed system--- I am going back to school in the fall and will be using some of my refund grants and monies to pay off my outstanding debt and settle things once and for all. Then I can start saving and rebuilding my credit history. I have found that now when in case of emergency I always have a couple hundred dollars spare as well as the ability to call in a salary advance for an extremely low fee at my credit union-- so I do not feel so stressed.

I encourage you to find out if you can take at least a credit card and pay it off. Even if you need to ask your family members if you can lower payments for an interim period to help you with this. I am sure that many would understand especially if they knew you would be getting yourself to a situation where you would not need ask for money again.

Get rid of the cars-- even if you loose something.. if you can get your car payments down to something much lower.. you gained everything. use the extra money to either save or aggressivily pay what you can to those credit cards.

Use coupons! Use your company discounts. I now work for a cable company and because of this I am lucky to get my internet and cable for free, as well as a assorted discounts on local grocery stores, products, etc etc. I save an extra 50.00 a month on my cell phone bill for just being an employee of my company. I shop at stores like Big Lots and spend lots less on items like brand name shampoos, groceries, etc etc than I would at places even like Sams. It all adds up.

I hope you do not think i am too harsh.. but as somoene that has been through something similar I would hate for you to go deeper than what you are already are. It is not worth it.

 

Lucky's advice

Lucky has given you excellent -but difficult to follow -advice. It will require being very disciplined, and a lot of "doing without" or modifying what you do.

I don't know if you can do follow a "lean and mean program" ? Is this approach something that your spouse will partner with you on, will he be the one to help you figure out how to do more with less, or will he want to continue to keep up appearances and figure out how to move $$ around? You will definitely have to be a team to work through this.

The doubling cost of auto insurance and house insurance is something I never considered, and it applies to 13 and 7 BK'ers. When I filed in 96, insurance companies did not pull credit as part of rating customers and determining their rate category. And now, almost every insurance company does it. And they don't care if it is discharged or not, they take the presence of a BK on your CR and it's uphill on the rates from there.

hope the board is helping you sort through your options,

 

Re: Lucky's advice

WhyChat,
You are absolutely right....he was talking a 7...in that case..."forgedda' 'bout it"...as he will lose that nice new home of his in a 7. The only bk he can viably file and keep all those things is a 13...period. If he files a 13 and completes the plan successfully to a discharge it will only stay on his reports for 7 years from date of filing. Of course with their incomes and cc debt I doubt a 3 yr plan will be acceptable...more like a 5 year plan.

Of course, Lisa is exactly right about a 13...it is 3 years living with the credit parental authority of the trustee. Also all credit is denied during the pendency of the 13 plan as the debts aren't discharged until the plan is complete unlike a 7 where all debts are discharged within 4-6 months.

I filed a 13 due to the IRS (my only creditor...who just levied my bank account...boy was I pissed...of course they have to give it back...but somehow the "give back" procedure is so much slower than the taking...wonder why???) so 3 years with the bk trustee will certainly be nicer than 10 years with the IRS.

Touchdown has gotten alot of good advice on this thread. It will be interesting to see how he disseminates it and what plan of action he will take.

clc

 

Re: Lucky's advice

Touchdown:
I understand alot of what you're saying and appreciate your honesty in sharing it. I'm in a similar situation...just got married, have lots of debt, and just refuse to give in to BK. (I want to set things straight and pay off all my responsibilities). This board has been a blessing in that at least I can see there's a way to approach things (legally), and protect myself...and people who are willing to help out of the goodness of their hearts.
Just want to wish you the best and tell you I'm rooting for you, too! Good luck!!!

 

Wow, I havent read all the replies...Look like a primer, thats great. I going to save this thread.

Dont sell the honda, you dont have too. But I can tell you this, go right now and make an appt to see a personal bankruptcy attorney. Bring a spreadsheet of all your assets and liabilties, so he can glance at it. When you meet the the attorney, ask him this.

1) How many cases have you won - (100+ min)
2) Do you know the trustee personally (yes)
3) Ask him about buying a home, then filing in 6 months, (this should be fine).

Go and buy the house now, pay off or balance transfer the capital one card to show zero balance. This is for the secured card later. Waiting 6 months, you have just enough time till new law kicks in.

Then file the chap 7 bankruptcy. It should go smooth.

I made the mistake of not buying a house, before the filing, now i gotta rent for 3 more years. But thats ok. You must wait 4 years post discharge for conventional mortage.

I ran an internet consulting business, it was awesome for a good time. Of course you know where that went. My credit was excellent, right before the filing. I felt horrible. I cried days before it. I couldnt belive this was happening to me. One day I am rich, Next day I am poor.

Now I know better, I am doing ok now. I will make dam sure, this will never ever happen again.

Though, I do plan to be rich again

 

I am sorry, mphillips, but I don't agree with your advice. First of all, touchdown will pretty much only be able to file a BK 13 - his income and available assets are more than his debt. The courts, more than likely will have him set up a payment plan. If he files a Chapter 7 (if the court will even allow it) after he buys the house, his home, as well as, his autos are in jeopardy.

Dani

 

Re: Lucky's advice

Touchdown,
Well you took your beating like a real man. It takes courage to admit to mistakes in judgment. Its hard to go back to the farm after seeing "gay paree" but I think you're ready to bite the bullet and do what is necessary to right your credit wrongs.

Your new GMAC purchase is "upside down" as are all new cars in their first year. I'm sure you've heard the saying :"it depreciates $1K as soon as you drive it off the lot". Well truer words were never spoken.

I personally don't think bk is a moral or immoral decision. It has to do with "fresh start" versus never being able to dig yourself out from under. I think you and your wife are perfect candidates for a bk 13. This will force your creditors into a payment plan YOU can live with. Of course it will be on your credit reports for 7 years from date of filing....but chargeoffs stay for 10 years when the day happens that you can't meet those minimum payments. I would advise making an appt with a competent bk atty...usually the first consultation is free.

I do not advocate bk just to screw your creditors...with you and your wife's incomes you can probably pay back a good portion of that debt over a 3-5 year plan. If you would like me to give you more detailed info just email me privately and I can go into more specifics. Of course if you want to move up to a bigger house you need to do that first. Doing that would effect a 7 but not a 13 as in a 13 you get to keep your assets. There is also something you can do about being "upside down" in that new vehicle...but I will go into more detail in a private email.

Hope this helps...my email is on if you want to discuss this in more depth privately,

clc