If you are squeamish please dont look below.....Through years of financial irresponsibility, losses in the real estate market, and my wife's declining ability to work I have found myself completely trapped and scared for the future. As of now we have never missed a single payment on anything ever but we are quickly approaching a time where we will be unable to meet our obligations. Our savings is about to run dry and I am nearly out of assets to sell. On paper we make very good money, I'm about $7,850/month and my wife is about $3,000/month. Problem is I will be forced to relocate for my career in about 9 months. With this I will lose about $1,500/month and my wife will be out of work for good because of a recently diagnosed health condition. Due to my career I am unable to default on any payments for any reason and yes it is easy for my employer to find out (some of you may be able to figure out my career based on the forced relocation and inability to default). Strangely I'm told that Bankruptcy may be a better option than carrying my current debt as it shows corrective action. Problem is Chapter 13 is not viewed positively because of the wage garnishment and continuing to carry the debt for what would definately be 60 months for my case. Additional problem is because of my current income I fail the Chapter 7 means test for my current state (median for 2 member household is $85,915). I have a very large amount of secured debt but I'm not sure it helps on the means test (and it shows more financial irresponsibility...stupidity really). I did consult with a lawyer but he pushed Chapter 13 despite my pleas for other options and wouldnt even look at any other option. I mentioned a certain exemption to the means test (might be even more clear on my career) and he immediately changed his tune and said that I do qualify for the exemption. I later researched extensively and I am 100% certain that he is wrong and that I dont qualify as I am not disabled and I am a life long member of my career, not a part time member that was forced to full time. My debt as a whole is a major problem but I have identified my insanely expensive unsecured personal loan payments as the main cause for my decreased ability to meet obligations. I have attempted to refinance them with longer terms and better rates but have been rejected by credit unions and banks that I have very good histories with. All real estate transactions are closed (with no default) and I now live in housing provided by my employer. I do believe I am out of options. Does anyone have any insight? I am open to taking criticism (belittling too) and will answer all questions openly as I need to figure out a resolution and fast.
Credit Scores 575 me and 625 wife (both have flawless payment history but maxed out utilization and horrible debt to income)
$89,500 Credit Card Debt(mostly financial irresponsibility but also required repairs or losses in the real estate market)-probably about 95% utilization
$42,500 Unsecured Personal Loans (desperate attempt to consolidate credit cards that back fired)-2 seperate 36 month loans that I am about a year in to paying flawlessly. $1,230/month payment on one and $805/month payment on other.
Car 1 $1,325/month on payment 8/60...plus there is a baloon payment at the end and we are horribly upside down.
Car 2 $900/month on payment 2/84...definately upside down
Secured Loan (Toy) 1 $525/month on payment 6/84...definately upside down
Secured Loan (Toy) 2 $275/month on payment 4/48...plus there is a baloon payment at the end and we are definately upside down
Secuired Loan (Toy) 3 $250/month on payment 30/60...definately upside down still
looking at the numbers it does appear that you are in a tight situation. For clarification though, how are you 82 month into a 84 month car loan and "upside down"? Did the car get totaled?
Sorry, that is payments remaining. As in I have 82 of 84 remaining. Horrible horrible decisions were made in 2017 as things were looking up and then took a quick turn for the worse.
Well, welcome to the boards. I'm not familiar with bankruptcy much, so other members will give you more detailed advice. I can say though that it is worth shopping around for a lawyer. If you don't agree with his opinion it might be a sign that he isn't the correct lawyer for you. Also take a look at the auto credit board, they might know ways to get out of your cars since they are fairly new.
I know you are nervous about disclosing your line of work, however there are plenty of people around these boards who share it and you can feel free to do a search for the keyword on these boards. Also, I am not an expert on those matters, but there should be an Employee Assistance Program or some analog to it (whatever it may be called, my cursory search seems to have different providers for different, um, departments we'll call them :-)). EAPs are required by federal law to maintain confidentiality except in certain legal cases e.g. potential child abuse or potential harm to self or others. See also https://www.opm.gov/policy-data-oversight/worklife/employee-assistance-programs/#Confidentiality You can contact your EAP for a referral to a bankruptcy attorney who is hopefully going to be more experienced with people in your specific line of work.
Make sure when you visit with an attorney, you have a list of questions. I mean, every single question you can think of to ask, specific to your situation. Look through your post and think through every scenario. Start reading NOLO's bankruptcy section, which is a wonderful, free educational resource prepared by attorneys - it will also bring up a lot of questions for you, because it can't answer everything specific to your life. And when you sit down for your free consultation, ask them everything you can. It may take an hour. Get a sense for whether they are patient with you, whether they are knowledgeable in the area, whether they are willing to look into areas they are not familiar with, or whether they hand-wave away your questions. And if they do not satisfy your concerns, feel free to thank them politely, and go back to your EAP, or an internet search for "(that keyword for your line of work) bankruptcy attorney" and find another one. I consulted with a handful of attorneys before settling on my first one, then had to move on to a second (through no fault of the first, situation outside either of our control).
Best of luck OP. Keep us updated of your progress.
The means test isn't always cut and dry. Talk to a few lawyers and MAKE SURE you don't qualify for a 7.
I don't know much about 13s, but is wage garnishment required for your repayments or can you submit them on your own?
If BK is a complete no go:
You need to get rid of all of your cars and toys like yesterday. Sell anything you have of value, move to the cheapest place you can, borrow from family whatever you need to do to get balance the negative equity. Buy a $1500 cash car and SHARE IT.
Then you need to pay everything else off. I would see if putting the credit cards and personal loans into a debt management program make sense or if it's better to just pay them off once you're on a strict budget and can throw heaps of money at them. You could budget yourself to be able to throw $25k/year at them, but it won't be fun.