Monthly Archives: July 2016

Re: Should I file bankruptcy?

Your monthly payments below almost equal your net income; you have to make some drastic decisions on your expenses and increase your income if you don’t want to file bankruptcy. No choice there. $500 a month just isn’t enough money to cover groceries, gas, repairs, clothes and other unexpected expenses especially if you have a family.

I am not saying you can’t do it, you can; but it will take time and hard work, being dedicated to trimming excess, willing to work another job, etc.

Now, as far as bankruptcy is concerned, Chapter 7 is liquidation and there is no Chapter 14. Chapter 13 is reorganization. You don’t make the “choice” of filing which Chapter anymore; that was changed last fall and the median income of your State is in large part the determiner for which chapter you can file. If your income is below the median income for your state, you can choose to file 7 or 13; however, if it is above, then you will likely be forced into 13. Also, you have to take a finance/credit counseling class within 6 months prior to filing. Keep in mind, student loans are not dischargeable in bankruptcy, no matter which chapter you file.

You can learn more about median income for your state here:
https://www.justice.gov/ust/means-testing

Expense standards for 48 contiguous states:
https://www.justice.gov/ust/eo/bapcpa/20111101/bci_data/national_expense_standards.htm

The first thing you have to deal with, believe it or not, is the depression … depression can make you physically ill and prevent you from working so this is the big thing for you right now. The most important thing in your life is your health and your family … are you married, can you discuss this with a spouse or significant other?

Being honest and upfront with your spouse, and they with you, is extremely important to resolving these issues and supporting each other will go a long way in resolving the depression.

Also this is what dave Ramsey says:

Remember, they (Creditors) can’t hurt you … they cannot physically hurt you … only you can do that to yourself if you let it happen … absolutely refuse to be depressed … there are solutions, from tightening your belt … ok breathing may be a tad hard for a while 😉 but you will breathe … to filing bankruptcy … to just not paying anything but the necessities (meaning no cc’s, no unsecured loans … just keeping a house over your head and related expenses).

Hope this helps some and do post back if you need more questions answered.

Should I file bankruptcy?

I’ve pretty much come to the conclusion that there is NO way I’m ever going to get myself out of this hole that I’ve dug for myself. Well, some of it is just a matter of a bad choice to move to a state where the housing appreciation has gone down the toilet – but I guess it doesn’t matter HOW we got here. PLEASE, I am looking for some advice here. I am growing increasingly more and more depressed over this situation.

I try to make this simple but just laying out the numbers:

  • TOTAL DEBT: $258,000
  • MONTHLY NET INCOME: (after taxes): $3700
  • TOTAL MONTLY PAYMENTS: $3268

I OWE:

  • $46,000 in student loans that have been in deferrment for 6 years and keep building interest.
  • $196,000 on my home that is now only worth about $175,000 (Mortgage 1 = 185,000 and Mortgage 2 = 11,000)
  • $10,000 unsecured loan
  • $3,000 overdraft loan
  • $1,200 credit card
  • $300 credit card
  • 1,400 medical bills

MONTHLY PAYMENTS:

  • 1450 – Mortgage 1
  • 75 – Mortgage 2
  • 199 – HOA
  • 28 – Water
  • 96 – Electric
  • 92 – Cable
  • 93 – Car Ins
  • 60 – Cell
  • 305 – Unsecured Loan
  • 800 – Daycare
  • 25 – overdraft loan (high interest)
  • 25 – credit card (high interest)
  • 10 – credit card (high interest)
  • 10 – medical bills
  • 0 – Student Loans that continue to accrue interest

Can someone give me advice – I guess state the obvious here? And I don’t want the file Chapter 7 – I want to get rid of it so I can start SAVING money – I want to file Chapter 14. If I don’t get RID of the debt and start saving money, what happens when my car starts breaking down? Or I need a root canal? Or my son is in an accident that requires hospitalization?

Side note: I’m a single mom and I adopted my son – therefore, I don’t get child support.

Thoughts?