Ok, as everyone already knows the economy is in the toilet. It has affected just about everyone. We have been struggling since long before this whole thing started. We were just barely paying bills. Needless to say I wish Christmas was over with already.

I think ..well I actually know..that very soon we will have no other options but bankruptcy. I don't want to do it, but I really have tried everything else I can think of. Short of going to one of those low-end loan companies you see on TV. And of course that would only create more debt. I'm not looking for sympathy because well, everyone is going through this. I am on disability and my husband busts his butt all week working 10-12 hour days and brings home barely enough for food and utilities. My check is paying the mortgage right now, but with all these other bills piling up, that may change also.

Anyway, I am wanting to find out about filing for bankruptcy. I know the laws have changed, but I cannot seem to find any specific information about the filing process and things like that. I honestly think the best thing is for us to try to pay everything, but we cannot afford it. I don't want to start making payment arrangements with the mortgage company and others because I don't know if we will have money for the payments in the near future. I hate to promise something and then not be able to do it. I really need some advice and maybe someone could share their experience with a similar situation. I feel so alone and lost right now and I could really use some help.

Thanks,
Duchess

Just google Chapter 7 or chapter 13. One of the biggest changes is that in order to file chapter 7 (total liquidation), you have to pass the means test. Basically, if you are at or below the median income for your family size per your state, you may file chapter 7. If you are above the median income, then there are other hurdles that you must pass before you can file for chapter 7. If you don't qualify, then you may file chapter 13, which doesn't dismiss your debts, but focus' on repayment.

Bankruptcy Information, FAQs, Chapter 7 &13 Information.

Also, I do know that certain things can't be discharged, even if you do qualify for chapter 7. Examples may be: child support, student loans, debts originating from fraud, etc.

HTH.

__________________
Prayer is the burden of a sigh,
The falling of a tear,
The upward glancing of an eye
When none but God is near."

Call everyone you owe and see if they will reduce your payments. You are not alone by anymeans with your financial problems. Everyone I speak to is in the same boat. Call you state consumer protection department and see if they can help reorganize your payments. Good luck.

I pulled this from Clark Howard's website, OP.

"Does Clark recommend using a credit consolidation company? No, consumers should avoid using credit consolidation companies. They usually want upfront fees and you may not get your credit problems resolved. Clark feels that Consumer Credit Counseling Service is the legitimate counseling service out there. They provide credit counseling for free and a debt management service for a three-to-five percent monthly fee not to exceed $50 (different for all states). Go to Welcome to NFCC! to find your local CCCS office"


Try calling your local CCCS office before you file for bankruptcy. There may be a more viable option available to you. Good luck.

__________________
I want to keep ALL of my paycheck and eliminate the pyramid scheme known as Social Security (there is no lockbox ). Do you want the same thing? www.fairtax.org

I agree with deerekid. Contact CCCS first. It will still affect your credit but they shoudl be able to significantly help with the reduction of your debt.

__________________

Contact a lawyer who specializes in bankruptcy. Consultations are usually free and they will know better than anyone what your best options are. The sooner, the better.

__________________
bite me and get a brain!

Thank you everyone who replied. There's so much information to sort through on the net that after awhile, I become completely lost. Sites contradict each other and it ends up just a big white page with a TON of black letters on it, most of which I couldn't even pronounce.

Anyway, some very very good information here. I am trying to consider all options, before this. Hubby keeps saying "It will get better. Don't worry" but I think that's because he doesn't know what else to do , either. I keep thinking maybe if we just hold on a little longer..just a little more time and this thing will blow over and we can get back to living our lives.

I DO want to repay everyone I owe, it's just that when you are at the bottom of this black hole, the only way out you can see is to jump straight up. You don't see all the little holes at the bottom that also lead out and would be a lot less difficult.

Ok, enough with the metaphors. I am not even awake yet, which is probably why I am thinking like this..LOL. Trying to keep my thoughts light and on top of everything, everyone in my house is sick. Some kind of monster cold/flu/crud bug. It won't go away either. I have to get control over this situation before it completely goes out of my hands. Thank God the season is coming soon and everyone will be closed so we can at least enjoy our family without the phone calls from collectors.

I hope everyone has a very happy and safe Christmas.

For what it's worth, if you are dealing with credit card debt, get in touch with the issuing company. If the CS rep you speak to won't help, ask for a supervisor. No help? Call again the next day. Right now, they are very willing to negotiate. In a default pool, they are only receiving about 5 cents on the dollar, so if they can work it out with you at 20 cents on the dollar, they are ahead of the game. An unfortunate reality, though, is that they sometimes do not negotiate the debt until you have missed a payment or two and they know they are at serious risk of your filing bankruptcy. If you do reach an agreement, make sure they mail or fax you a written copy. Be cautious about agreeing to automatic debiting if your income is not consistent.

For your mortgage, contact the lender as well. They are all under tremendous pressure to assist homeowners right now. The last thing they want to do is add to their default/foreclosure numbers. Some will work with you on a forbearance agreement, which either changes your terms (rate, length of term, etc.), or puts some of your interest on the back-end to reduce your payments for the short-term until your finances (and the economy) stabilize. Put your request for assistance in writing, and document every conversation.

So sorry you are dealing with this. It is incredibly stressful every single day. I hope better days are ahead for your family.

I agree w/ the other posters. Before filing for Bankruptcy, I suggest you sit down w/ a list of your creditors and call them and see if you can lower your debts. It can't hurt to call and find out. Good luck!

__________________
Proud Wife of an Army Soldier and proud mother of an Army MP currently serving in Iraq.


"To any critics who say a woman can't think and work and carry a baby at the same time, I'd just like to escort that Neanderthal back to the cave." - Sarah Palin

Ok everyone looks like we are here again We have tried and tried for the past months to get out of this hole we are in. It's to the point now that we are going to lose our home and more. Now I have more issues. What about my son's car, which hubby is a co-signer on? What happens to that? Can we keep it out of the bankruptcy as my son has made all the payments for the past year and a half and never been late or anything. That is my main worry right now. If it turns out he will be affected then we are NOT filing. We will lose everything before I let our issues affect him. Especially when he has kept up the payments and all.

I would appreciate any advice.

Thanks

I am sorry to hear things have worsened for your family. I will pray for a brighter light soon.

As far as your son's car, you'd need to talk to an attorney. There are allowances and exemptions for each type of bankruptcy, and it often depends upon the value of the car. If you owed $10K on a car that could be resold for $75K, they would want it. I don't think they will take your son's car, particularly since he is making the payments so it is not part of your budget. They will probably ask him to sign a reaffirmation of the debt, or you may be able to talk to the loan company and have the loan transferred to your son's name completely.

Meet with attorneys until you find one you trust and whose advice seems sound. Hang in there.

Deerekid had some very good advice for you. Don't do anything until you talk to CCCS. Clark Howard is a local guy to Atlanta and has been on the radio for years. He knows what he is talking about. Look on his website, take his advice, and start making some phone calls!!

__________________
Check out my homepage http://julie.mycoupons.com/

As long as your son is the one paying for the car, it does not need to be included in the bankruptcy, You may need a letter from him.

To file a Chapter 7, your mortgage needs to be up to date if you want to keep it.

With a Chapter 13, you would have to repay a portion of your debts through the courts. I think that you can catch up late payments through the plan. You would be expected to keep the mortgage current.

Thank you for the information. I really appreciate it.

I can't help with info about bankruptcy. However, I will say if you sit down (with your family) and put it all on paper, there are other ways to cut back and save so you have more money - to put toward the payments you will work out with creditors.

Pare everything to the bare minimum of your outgo. A few ideas are to have a yard sale, hang laundry out, no more eating out, figure out how to use all leftovers, get a second job, adjust your insurance deductible, downsize to one vehicle, get rid of cable and internet, etc, etc, etc.

When you have exhausted all possible options to cut the outgo and bring in more, only then should bankruptcy be a consideration. Sometimes this is like losing weight. It took years to put the pounds on, you can't expect it to all come off in 2 weeks, you have to WORK at it.

Some of it will hurt, and should, but be realistic in giving up things you cannot afford and can do without. It can, and should be done for repayment of your responsibilities.

dl

Ok. I thought I had this under control but we just got the letters in the mail telling us when the meeting with creditors is, and I fell apart. I started crying and just couldn't stop. I just wish there was something we could have done. But honestly, the creditors weren't going to "work with us" forever, and we didn't see any change in the foreseeable future. I don't know if it's because I worked so hard at keeping the bills and money that it just feels like I failed, or what but this is awful. Everyone keeps telling me to think of it as a fresh start but all I can think about is how I let everyone down.

Question if anyone knows this...when filing a Chapter 7, what happens to the escrow account balance in the home loan? Do the lenders get to keep it? Or does it come back to the borrower?

We have close to $1000 in our escrow account to pay for future property taxes and homeowner's insurance which we will not need now. Moneys that were paid by us. I am just curious as to whether we will get that back, or if the lender has a right to keep it for us filing bankruptcy on him or something? I hope I am phrasing my question right...

Thanks

You sold the house? The escrow account will be returned to you if the loan is paid off. Bankruptcy will not get you out of a mortgage,

No, we didn't sell the house. We had to include it in the bankruptcy.

Have you heard of Dave Ramsey? He has his own radio talk show, and does Money Makeover seminars around the country. He always has very sound advice when it comes to money matters and debt. I know he is not a big supporter of filing for bankruptcy, as it will always be a blemish on your record.

As far as the creditors go, they are known for harrassing people when they are no longer current on their debt. They want their money and will threaten to sue; whatever it takes. You can eventually settle with them for less if you can pay the debt in full.

Go to the library and at least get Dave Ramsey's book and read the section on bankruptcies. He will steer you in the right direction.

__________________
I don't suffer from insanity, I enjoy every minute of it!

If you still have a mortgage, that account will be maintained by the escrow company that your mortgage company hired. They'll make disbursements when due.