Strongly considering CH.7 NEED SOME INPUT

[paula825]

Hello everyone.. I am just fed up.. My credit scores have benn teetering around the mid 500's ever since 2008 when I bought my house and I'm just overwhelmed. 

I am married and make around 60k (Police Officer) a year and my wife made around 40k last year (some unemployment income included). Her credit score is currently 640 (fico)

Here's what I owe in my name only.

House - 160,000 (just VA refinaced 2 months ago) (my name only)

Car -  1950.00

CU Signature loan - 4500

Gas Bill - 7100 (don't ask)

Water - 1750

Cu loan #2 - 1000 

dell - 800

capital one - 800

medical bills - 975

College bills - 1400 (not student loans)

A little over 180k total

I'm sure I have missed something.   I am meeting with an att. asap to inquire about BK options. 

Has anyone had similar circumstances and got a ch.7 ?

Do you think I can get a ch.7 ?

[ScoreBooster]

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@paula825 wrote:

A little over 180k total

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Looking at the numbers, I'm not sure if you should file for BK in the first place. Is it really worth it?

[paula825]

I forgot to mention that I want to file for myself only and we have another car in my wifes name (19000 Bal), her cc's, student loans and 3 kids..one going to college this year. and after looking she she made more like 30k last year.

[SoulMaster]

You might want to check with your union rep.  I know that in Vegas police officers "in financial hardship" used to be the supreme targets of IA and there were (in the past) dismissals over BK.  I'm not sure that's the case anymore, or where you are, but you might want to look in to it.

Also, try the book Total Money Makeover, or if you can, take your wife and head to an FPU class.  BK is really something you want to avoid at all costs (trust me, I've been through one).

Also, if you include the house in the BK, you're going to have to find somewhere else to live.

Finally, @90K/year you probably aren't going to qualify for CH7 (means test), you'll have to check your state's median income, but in NV it's ~46K/single ~55K/couple.  And yes, even though she isn't filing, you'll have to include her income in the means test due to the marriage making you "one".

Good luck,

-SM

[Anonymous]

I'm going to give a big +1 to the recommendation to look at Dave Ramsey's programs.

If you don't qualify for a CH 7, you'll be looking at a CH 13.  A CH 13 is basically a repayment program, with the benefit of reducing horrific rates on cc debt.  Since you have very little CC debt, there'd be minimal benefit in that regard.  And a significant "ouch" due to the BK filing.

I'm also a fan of Suze Orman (most of the time).  We do like the way she reminds us and our kids that we may or may not be able to afford to put them through college.  Our kids worked their way through college - I'm a big fan of that.  Parents can stand tall and provide emotional support without putting the family finances, and their retirement, at risk by funding college costs for a capable adult child.  One of Suze's segments on her TV program is "Can I Afford It?"  She puts the nix on parents funding college education unless their own financial houses are in order.  Just might be something to ponder - one part of the puzzle for us all.

[paula825]

Thanks guys for the input. based on you guys responses you don't think I should file. There are other factors I have to take into consideration for example retirement and savings or the lack of. The house is not worth what I owe and I could probably think of a ton of other reasons to file.

I want to use the BK as a way to prepare for the future while I still have time and my sanity. 

SoulMaster according to your signature you filed not even 2 years ago and based on your scores you have listed your doing pretty good compared to me. I understand how damaging a BK can be to some and I am prepared to deal with the 10 yr curse. I have spoken to several co-workers that have done it and things turned out fine.

I understand a lot of people have problems with being associated with a BK (applications or whatever esle). I'm not looking for a new job and in 2 yrs or so I will be able to buy another home (hopefully). Based on everything I've read on this site, I'll be able to establish credit a year or two after I file.

I won't be ashamed to say I filed BK but I won't broadcast it to everyone either.

Between my job, and my bills the stress is killing me. Something has to give.

Thanks again for the input.

[paula825]

Also I the amount (means test) for ch7 with a family of my size (5) is 78,099.00

[Anonymous]

It looks like you're trying to give this a good thorough look.

Are you thinking the means test will be in your favor?  

If you're thinking you will not make it through the CH 7 means test, are you considering a CH 13?

And as always, are you considering looking at other options as well?

Best wishes to you as you work through it all.  I know it is a very stressful time.  With all things being said, I'm a big big fan of paying back whatever can be paid to the folks who are owed.  They have retirements, too.  So I tend to put a strong vote in for looking at snowballing and other options as well as the BK option.  And that being said, BK exists for a reason - it's there to help folks get on their feet.  Most folks who file BK have been through the wringer, and a fresh start (sort of) can help them regain their footing.  There's a time and a place for all things - best wishes as you figure out what's best for you and your family in your situation.  Keep us posted!

Folks often recommend sitting down with a BK attorney ( I recommend sitting down with two for comparison sake) with a concise one page outline of your finances.  And they often recommend sitting down with a non -profit debt counseling service with the same info.  Then you're loaded with some good solid info to help you work things out.

[SoulMaster]

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@paula825 wrote:

SoulMaster according to your signature you filed not even 2 years ago and based on your scores you have listed your doing pretty good compared to me. I understand how damaging a BK can be to some and I am prepared to deal with the 10 yr curse. I have spoken to several co-workers that have done it and things turned out fine.

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Ahh... it only appears that way... Scores aren't everything.  I could get to a 700 by June (the plan) and still not be able to buy a house for another ? years.  BofA hasn't cleared my name off the title to my house yet, and I'm still paying the IRS their huge sums of money.  If I could have avoided BK, I would have, and I would NEVER recommend doing it to raise a credit score.  For the next 8.5 years, I'll be missing 100pts because of that BK.  Getting a score up is easier with out it.

-SM