topic Re: Struggling to pay bills, but still have decent credit however i need to file chapter 7 in Bankruptcy

Struggling to pay bills, but still have decent credit however i need to file chapter 7

Underconstruction — Fri, 02 Aug 2019 15:05:48 GMT

I have a fairly decent credit score of 648 down a bit from right at 800 due to being too heavy on debt to credit line (basically the cards are maxed out)
We are struggling to pay our bills and it is embarrassing but i think we will have to file chapter 7 bankruptcy as we have tried nearly everything to get back on top of this debt and nothing has worked.

are there any guidelines we should follow to get the maximum out of filing? I have never missed a payment, and am actually current on everything but the problem is being current on everything means cutting out EVERYTHING a normal person or family SHOULD have like normal food and not sandwiches and ramen noodles lol , putting fuel in vehicles, and just an all around depressed mood in the entire household that is driving us insane.

should we continue to stay current on the cards or just let them go being as we plan to file within 2 weeks? I researched all this years ago but cant remember much any help with guiding us through this situation is greatly appreciated.

of course we have spoke to a few attorneys but we didnt get this type of info from them we just got the basics of how a chapter 7 works these days.

thanks!

Re: Struggling to pay bills, but still have decent credit however i need to file chapter 7

Jnbmom — Fri, 02 Aug 2019 15:38:56 GMT

Have you hired an attorney or just consulted? Yes they say your credit looks better if you have no lates prior to the BK, but if you guys are struggling that much sometimes worrying about your scores should take a backseat. What are your minimum payments each month? Do you have the money to obtain the lawyer and file? If you can hire and file within 30 days, I would stop paying them use that money for the lawyer and your family's needs.

Re: Struggling to pay bills, but still have decent credit however i need to file chapter 7

Underconstruction — Fri, 02 Aug 2019 16:54:46 GMT

just consulted so far, but we have our eye on an attorney that seems right for us. We do have access to the money to hire her from a family member as much as i HATE to do that.

Our minimum payments? lets just say between the minimum payments on credit cards and our other bills i have no clue how weve made it this far! the minimums on the cards and our other bills total at least twice if not triple what we have for income per month. I only say this because i have lost the detailed budget somehow that i wrote out last month, but will be looking for it or making a new one however cumbersome it is because it was extremely detailed.

im just trying to make this as painless as possible because i know how hard one has to work to rebuild credit after they are down bankruptcy or not.

thank you for your reply jnbmom!

Re: Struggling to pay bills, but still have decent credit however i need to file chapter 7

LakeLife — Fri, 02 Aug 2019 17:03:48 GMT

It sounds like your spending got the best of you, but you are otherwise employed and nothing tragic has happened. You should consult with an attorney (most bankruptcy attornies will consult with you for free) and complete a means test for your income versus requirements for a successful chapter 7 filing. You don't mention income, but it's an important facet for qualifying for Chapter 7.

Regardless, good luck to you.

Re: Struggling to pay bills, but still have decent credit however i need to file chapter 7

twono — Fri, 02 Aug 2019 17:49:21 GMT

I had similar concerns when i filed Ch 7 a llittle over a month ago. All 6 attorneys that i met with said to stop paying....but, after explaining to them why i wanted to stay current, they then said it was up to me. Just don't pay any extra to creditors, and don't choose some creditors over others when it comes to making payments. You want to avoid 'preferential payments'.

Out of about 35 open CC accts, unsecured loans and secured loans....I did get (5) 30 day lates. It would have been only (2) 30 day lates but my filing was postponed 2 wks.

Keep in mind, a payment to a creditor won't be 30 days late until 30 days after a statement cuts. So try to file within 30 days of missing a payment(s). It wil be 'tricky' since im sure your statement cut dates vary with each creditor.

Hope that helps.

Re: Struggling to pay bills, but still have decent credit however i need to file chapter 7

Anonymous — Fri, 02 Aug 2019 18:45:19 GMT

If it makes you feel better, my spouse is already at 670s on 2 out of 3 credit bureaus not even 6 months past discharge. We did keep paying minimums, but only minimums, until we filed. I don't know that it actually makes that much difference, each of the accounts will show up negative anyways if included in bankruptcy, but that was how we did it.

Re: Struggling to pay bills, but still have decent credit however i need to file chapter 7

Anonymous — Fri, 02 Aug 2019 19:02:54 GMT

Thanks that is my game plan too keep everything current and hope it helps me build quicker so I can buy a house in the future.

Re: Struggling to pay bills, but still have decent credit however i need to file chapter 7

Tuscani — Fri, 02 Aug 2019 20:39:13 GMT

Stay current and of course avoid filing if you can. But do not be ashamed if you have to file. Also, paying right up to filing does you no good as all payment history and balances will be wiped away anyway after you file.

Re: Struggling to pay bills, but still have decent credit however i need to file chapter 7

Underconstruction — Tue, 06 Aug 2019 14:34:18 GMT

why do you say stay current, but then say everything will be wiped anyway?

@Tuscani wrote:
Stay current and of course avoid filing if you can. But do not be ashamed if you have to file. Also, paying right up to filing does you no good as all payment history and balances will be wiped away anyway after you file.

Re: Struggling to pay bills, but still have decent credit however i need to file chapter 7

twono — Tue, 06 Aug 2019 22:31:51 GMT

@Underconstruction wrote:
why do you say stay current, but then say everything will be wiped anyway?
@Tuscani wrote:
Stay current and of course avoid filing if you can. But do not be ashamed if you have to file. Also, paying right up to filing does you no good as all payment history and balances will be wiped away anyway after you file.
I'm with you underconstruction as to what Tuscani says and it not registering with me either. What Tuscani says may be true, but, if you miss payments and are 30 days late prior to filing, then those 30 day lates will stay on your credit reports for 7 yrs, regardless of the BK, and your reports will not be wiped clean of those derogatory accts.

Re: Struggling to pay bills, but still have decent credit however i need to file chapter 7

Underconstruction — Thu, 08 Aug 2019 14:39:05 GMT

a new problem has arisen its ugly head, the county says the house is worth about 20k more than what we paid for it.

So the homestead exemption of 5,000 according to a local attorney will not save the home being that the named person wanting to file chapter 7 has no children to up that number to 25k of exemption.

anyone have any input here?

Re: Struggling to pay bills, but still have decent credit however i need to file chapter 7

Tuscani — Fri, 09 Aug 2019 03:33:12 GMT

@Underconstruction wrote:
why do you say stay current, but then say everything will be wiped anyway?
@Tuscani wrote:
Stay current and of course avoid filing if you can. But do not be ashamed if you have to file. Also, paying right up to filing does you no good as all payment history and balances will be wiped away anyway after you file.

I am just saying stay current as in do not file if you can avoid it. But it you do decide to file staying current that point forward does you no good.

Re: Struggling to pay bills, but still have decent credit however i need to file chapter 7

Tuscani — Fri, 09 Aug 2019 03:46:39 GMT

@Underconstruction wrote:
a new problem has arisen its ugly head, the county says the house is worth about 20k more than what we paid for it.

So the homestead exemption of 5,000 according to a local attorney will not save the home being that the named person wanting to file chapter 7 has no children to up that number to 25k of exemption.

anyone have any input here?

Your local lawyer is going to know best. I would say though, with no additional exemptions and dependents, having $20k of equity in your home could be enough for the trustee to sell your home, or the non-exempt equity. But don't the value of your home by the tax assessed value. Depending on the region, these values are typically not in alignment with appraised values. It may be worthwhile to get a broker's price opinion and/or a full appraisal. Your attorney should be able to tell you what will be an acceptable determination of value in your jurisdiction, though. You also have the option to buy the non-exempt portion from the trustee if you are able.

Re: Struggling to pay bills, but still have decent credit however i need to file chapter 7

twono — Fri, 09 Aug 2019 07:27:32 GMT

@Tuscani wrote:
@Underconstruction wrote:
why do you say stay current, but then say everything will be wiped anyway?
@Tuscani wrote:
Stay current and of course avoid filing if you can. But do not be ashamed if you have to file. Also, paying right up to filing does you no good as all payment history and balances will be wiped away anyway after you file.

I am just saying stay current as in do not file if you can avoid it. But it you do decide to file staying current that point forward does you no good.

I don't think that's accurate. If you have 30 day lates on your reports prior to filing BK, those 30 day lates will be on your reports for 7 yrs, along with the BK for 10 yrs.

So how does having fewer negatives, NOT help in the credit rebuild?

I could easily have had about (35) 30-60 day lates on my reports before filing....If that happened, my scores would probably be below 500 before i filed. I ended up having (5) 30 day lates and am now hovering high 500's about 45 days after my 7 filing.

Re: Struggling to pay bills, but still have decent credit however i need to file chapter 7

Tuscani — Fri, 09 Aug 2019 13:44:38 GMT

@twono wrote:
@Tuscani wrote:
@Underconstruction wrote:
why do you say stay current, but then say everything will be wiped anyway?
@Tuscani wrote:
Stay current and of course avoid filing if you can. But do not be ashamed if you have to file. Also, paying right up to filing does you no good as all payment history and balances will be wiped away anyway after you file.

I am just saying stay current as in do not file if you can avoid it. But it you do decide to file staying current that point forward does you no good.
I don't think that's accurate. If you have 30 day lates on your reports prior to filing BK, those 30 day lates will be on your reports for 7 yrs, along with the BK for 10 yrs.

So how does having fewer negatives, NOT help in the credit rebuild?

I could easily have had about (35) 30-60 day lates on my reports before filing....If that happened, my scores would probably be below 500 before i filed. I ended up having (5) 30 day lates and am now hovering high 500's about 45 days after my 7 filing.

I am referring more to paying in general once you decide to file not credit history. Bankruptcy does not erase your credit history.

The accounts should show with a $0 balance and Included in Bankruptcy (IIB) or something else that indicates that it was discharged in bankruptcy. The fact that you file bankruptcy and the account was IIB is, in and of itself, a negative mark. At least that's my experience. Which begs the quesiton, does the IIB notation supercede the previous payment history up to and prior to filing in terms of how it impacts a score? Not sure.

Re: Struggling to pay bills, but still have decent credit however i need to file chapter 7

twono — Sun, 11 Aug 2019 14:36:31 GMT

....to add to this, interstingly enough, about 3 of the 5 (30) day lates have been removed from my reports for now. I'm at the halfway point of my CH. 7 filing. I thought that i read that the derogs can re-appear post DC though? We shall see i guess.

My reports are having more ups and downs than a 6 flags rollercoaster.

Re: Struggling to pay bills, but still have decent credit however i need to file chapter 7

Anonymous — Thu, 15 Aug 2019 03:15:09 GMT

@Underconstruction wrote:
a new problem has arisen its ugly head, the county says the house is worth about 20k more than what we paid for it.

So the homestead exemption of 5,000 according to a local attorney will not save the home being that the named person wanting to file chapter 7 has no children to up that number to 25k of exemption.

anyone have any input here?

Underconstruction, You have left out tons of important information before anyone can help you.

What state are you in ? Are you using state or federal exemptions ? Married, single, kids?

Income ? total debts (not minimums, just the totals)

The federal homestead exemption in 2019 is $25,150 - For get what the county says your home is worth, you will need a CMA, BPO, or appraisal.

Also - when I went through my bk7, (which is what I assume you want, but youre probably looking at a bk13.) the trustee, took into consideration costs/fees of sale of the home. I had a $23k exemption and 28K of equity, but no creditor would have seen a dime once court fees, and commisisons were paid so they didn't bother with it.

I wont pretend to know every states exemptions, and the benefits/downsides, federal exemptions would be something to look into.

Your attorney should be able to answer all your questions, and should be able to do so within a buisness day.