topic Re: In over my head and its my fault, Ch. 7 or Ch. 13? in Bankruptcy

In over my head and its my fault, Ch. 7 or Ch. 13?

Anonymous — Mon, 01 Jun 2020 01:14:47 GMT

As I sit here a type this, I have my stomach in knots. I never thought I would be thinking of filing for bankruptcy at the age 34. I originally started with a couple CC’s when I was in my mid 20’s and lived on my own and made some stupid financial moves. I then compounded my situation by taking put personal loans to pay off the CC’s then I basically lived on the cards because my pay went to rent and paying the CC’s and loans. It has gotten to the point where it keeps my up at night and I come home and I’m irritable around my fiancée. I have broken out everything below.

Credit Cards
Capital One	$3,314.34	$137.00
Pentagon Federal Credit Union	$4,711.30	$187.00
Navy Federal Credit Union	$18,456.40	$369.00
Navy Federal Credit Union	$14,477.88	$525.00
Paypal	$7,080.00	$128.00

Loans
Navy Federal Credit Union	$7,794.90	$255.11
Navy Federal Credit Union	$9,454.11	$253.53
Pentagon Federal Credit Union	$16,166.55	$485.12
Pentagon Federal Credit Union	$8,000.00	$238.00
Freedom Financial	$7,286.00	$261.00
Lending Club	$9,526.00	$282.00
Prosper	$11,902.00	$432.00

Household
Rent		$1,754.00
Gas		$60.00
Electric		$40.00
Water		$35.00
Car Insurance		$123.85
Verizon Cell Phone		$100.00
Verizon Fios(includes internet)		$90.00

Totals	$118,169.48	$5,755.61


Salary	$114,000.00
Monthly Pay		$4,548.98

My question now is do I even qualify for chapter 7? I don’t own any property and my car is paid off and only worth $5500 according to NADA. My only concern is my finacee engagement ring and if that is going to taken.

Once I get DC I plan to rebuild and be more aware of how I use credit and not be reckless. Thanks for any advice as I have been sick to my stomach just thinking about this.

Re: In over my head and its my fault, Ch. 7 or Ch. 13?

despritfreya — Mon, 01 Jun 2020 12:04:27 GMT

With an income of $114k per year I tend to doubt you will qualify for a Chapter 7. Being over median income means a 5 year Chapter 13. No way for anyone on the Internet to determine what your monthly Plan payment would be. Best thing to do is to meet with several attnys to go over your options. Second best thing to do is to chill out and stop blaming yourself. Things happen. Bk is not the end of the world but rather a way to open and pass through a door into a new and cleaned up world.

Des.

Re: In over my head and its my fault, Ch. 7 or Ch. 13?

Anonymous — Mon, 01 Jun 2020 17:51:13 GMT

Your monthly gross income ($9,500.00) more than covers your monthly expenses, or am I looking at your chart wrong?

Re: In over my head and its my fault, Ch. 7 or Ch. 13?

Mjhall85 — Mon, 01 Jun 2020 18:41:44 GMT

@Anonymous wrote:
Your monthly gross income ($9,500.00) more than covers your monthly expenses, or am I looking at your chart wrong?

I thought the same thing but maybe the salary it is including the fiance money ? If your montly income is only 4500 depending on your state you may meet the means test for chapter 7 if it is 114k you can pay off these debts in a timely manner.

Re: In over my head and its my fault, Ch. 7 or Ch. 13?

Anonymous — Mon, 01 Jun 2020 19:01:44 GMT

My salary is 114k, but between taxes and retirement my monthly take home is $4500.

Re: In over my head and its my fault, Ch. 7 or Ch. 13?

Mjhall85 — Mon, 01 Jun 2020 19:08:49 GMT

Yeah taxes suck especially when single you get nailed pretty good.It's great you are saving for retirement early on but I would consult with an attorney more than likely you will be in a chapter 13 may have to put retirement savings on hold to pay off some debt. I would contact a few different attorneys and go from there. From what you take home and to what needs to be paid out you are in the hole just over 1k a month and you'll continue to be in the red until something changes whether its salary increase a bonus etc to help lessen the burden. Bankruptcy is never an easy choice I debated about it for over a year but I just prolonged the inevitable but now I am near the end of my BK.

Re: In over my head and its my fault, Ch. 7 or Ch. 13?

weezy615 — Mon, 01 Jun 2020 19:29:57 GMT

@Mjhall85 wrote:
Yeah taxes suck especially when single you get nailed pretty good.It's great you are saving for retirement early on but I would consult with an attorney more than likely you will be in a chapter 13 may have to put retirement savings on hold to pay off some debt. I would contact a few different attorneys and go from there. From what you take home and to what needs to be paid out you are in the hole just over 1k a month and you'll continue to be in the red until something changes whether its salary increase a bonus etc to help lessen the burden. Bankruptcy is never an easy choice I debated about it for over a year but I just prolonged the inevitable but now I am near the end of my BK.

I dissagree with you... I just filed and was in about the same exact situation as this guy, its kind of eerie actually. Im 35 years old and had about 75k in unsecured debt making 60k a year. I made too much but my lawyer said i passed the means test. It looks like he clearly can't afford all his montly bills and when you add food, water, rent, utility, gas, car maintence , clothes etc...he will have more bills to pay than what he makes. I think he can qualify for chapter 7..

Re: In over my head and its my fault, Ch. 7 or Ch. 13?

Mjhall85 — Mon, 01 Jun 2020 20:18:51 GMT

@weezy615 wrote:
@Mjhall85 wrote:
Yeah taxes suck especially when single you get nailed pretty good.It's great you are saving for retirement early on but I would consult with an attorney more than likely you will be in a chapter 13 may have to put retirement savings on hold to pay off some debt. I would contact a few different attorneys and go from there. From what you take home and to what needs to be paid out you are in the hole just over 1k a month and you'll continue to be in the red until something changes whether its salary increase a bonus etc to help lessen the burden. Bankruptcy is never an easy choice I debated about it for over a year but I just prolonged the inevitable but now I am near the end of my BK.
I dissagree with you... I just filed and was in about the same exact situation as this guy, its kind of eerie actually. Im 35 years old and had about 75k in unsecured debt making 60k a year. I made too much but my lawyer said i passed the means test. It looks like he clearly can't afford all his montly bills and when you add food, water, rent, utility, gas, car maintence , clothes etc...he will have more bills to pay than what he makes. I think he can qualify for chapter 7..

it can happen. Just the matter of attorney and means test. It's why I suggest talking to one. Glad to hear you got chapter 7

Re: In over my head and its my fault, Ch. 7 or Ch. 13?

Anonymous — Mon, 01 Jun 2020 23:29:40 GMT

Yea I hope it's a ch.7, but I have a feeling my salary will stop it even though my monthly pay does correlate.

Re: In over my head and its my fault, Ch. 7 or Ch. 13?

Anonymous — Tue, 02 Jun 2020 00:52:40 GMT

@Anonymous wrote:
My salary is 114k, but between taxes and retirement my monthly take home is $4500.

Are you sure your tax withholding is correct? How much are you saving for retirement? What other deductions are coming out of your paycheck (ex: health insurance)? Are any optional?

$4,500 x 12 is $54,000. $54k/$114k is about 47%. With an expensive health insurance plan that's possible. It would definitely be worth double checking though.

Re: In over my head and its my fault, Ch. 7 or Ch. 13?

Anonymous — Tue, 02 Jun 2020 02:19:05 GMT

If I stop contributing my retirement through work my monthly income goes to $5,300 which would be 63,600. Looking on line the medium income for Virginia is 72,000.

Am I looking at this incorrectly?

Re: In over my head and its my fault, Ch. 7 or Ch. 13?

Anonymous — Tue, 02 Jun 2020 02:55:23 GMT

@Anonymous wrote:
If I stop contributing my retirement through work my monthly income goes to $5,300 which would be 63,600. Looking on line the medium income for Virginia is 72,000.

Am I looking at this incorrectly?

55% take home (excluding the retirement contributions) is closer to normal.

The $72k Median income is gross (before taxes). Your $63,600 is net of taxes and other deductions.

Did you have the same or similar salary last year? Did you receive a significant tax refund?

Re: In over my head and its my fault, Ch. 7 or Ch. 13?

Anonymous — Tue, 02 Jun 2020 03:06:00 GMT

Similar salary within 3k and tax refunds are around 1k the past few years.

Re: In over my head and its my fault, Ch. 7 or Ch. 13?

Anonymous — Tue, 02 Jun 2020 03:53:58 GMT

@Anonymous wrote:
Similar salary within 3k and tax refunds are around 1k the past few years.

I was trying to figure out if you were withholding significantly more for taxes than necessary. That does not appear to be the case.

Can any of the credit card payments be reduced with hardship plans (close the card, payoff the balance under more favorable terms)? If anything else optional coming out of your paycheck? Any opportunity for additional income?

I can't comment on whether bankruptcy is right for you. I'm just trying to suggest things about which you might not have thought.

Re: In over my head and its my fault, Ch. 7 or Ch. 13?

Anonymous — Tue, 02 Jun 2020 11:12:26 GMT

You could also dump FiOS and the $100 cell plan and get a flip phone. If you want to avoid a BK, it may take some hardship and bare-bones living for awhile. With your car insurance, are you paying for full coverage? Have you shopped rates lately? There may be savings there. Being that you're engaged, I assume your fiancée is aware of all this. If you're all in for marriage, is she in a position to take on some costs you normally handle to free up money that you could put toward bills? Do you have a way to get a side gig like Uber or something that would increase income?

There are possibilities out there . You do have a lot of debt and it may not be enough, but a couple years of scraping may do it. That said, you have to weigh the stress of it all against having a clean slate and no worries. Rebuilds happen all the time and you can do that too. You have to weigh the emotional costs as well as the financial ones and go with the option that gives the best balance.

Re: In over my head and its my fault, Ch. 7 or Ch. 13?

Lurker22 — Tue, 02 Jun 2020 11:57:17 GMT

@Mjhall85 wrote:
Yeah taxes suck especially when single you get nailed pretty good.It's great you are saving for retirement early on but I would consult with an attorney more than likely you will be in a chapter 13 may have to put retirement savings on hold to pay off some debt. I would contact a few different attorneys and go from there. From what you take home and to what needs to be paid out you are in the hole just over 1k a month and you'll continue to be in the red until something changes whether its salary increase a bonus etc to help lessen the burden. Bankruptcy is never an easy choice I debated about it for over a year but I just prolonged the inevitable but now I am near the end of my BK.

FYI - retirement savings ARE allowed in Chapter 13, my lawyer and the trustee couldn't agree to what was reasonable so we had to have a hearing on the matter, in the end my savings haven't changed but the court must agree it's a "reasonable" amount going towards retirement savings

Re: In over my head and its my fault, Ch. 7 or Ch. 13?

GApeachy — Tue, 02 Jun 2020 12:05:23 GMT

@Anonymous wrote:

My salary is 114k, but between taxes and retirement my monthly take home is $4500.

Monthly Income: $4500.00

Monthly Debt: <$5800.00>

How long have you had these loans? Also, have you discussed this with a LO anywhere?

Could you consolidate your loan(s) at a lower interest rate?

1. Both NFCU notes- consolidate

2. Both PenFed notes- consolidate

Perhaps adding those cc's to the notes as well.

Re: In over my head and its my fault, Ch. 7 or Ch. 13?

Anonymous — Tue, 02 Jun 2020 13:49:06 GMT

My score is too low and have too my debt to limit. I have been trying to get a consolidation loan the past few months.

Re: In over my head and its my fault, Ch. 7 or Ch. 13?

GApeachy — Tue, 02 Jun 2020 13:56:30 GMT

@Anonymous wrote:
My score is too low and have too my debt to limit. I have been trying to get a consolidation loan the past few months.

Gotcha. @FireMedic1 may chime in to answer some ?'s you have. No matter what, peace of mind, health and happiness is what's most important and I wish you all the best.

Re: In over my head and its my fault, Ch. 7 or Ch. 13?

Anonymous — Tue, 02 Jun 2020 14:14:57 GMT

Yes, I have been trying to keep up with payments even if they are a week or two late. The stress of keeping up and trying to find money from A to pay for B so on and so on. I am waiting to hear back from a lawyer I met with