Considering BK7. Suggestions?

[-Furbz-]

Hello Everyone. This is a long post, so I grealy appreciate you reading and hope to get some answers as I am going crazy! 

Haven't been here in forever and really looking for some help to make sure I am doing things correctly. Have been doing a lot of reading and I think i am heading in the right direction but want to hear from people that have actually gone through the process. 

A little background history:

Had some financial trouble in 2016-18 and a lot of my cards ended up being closed/charged off. A number of them went to collections, wasn’t well versed on things and didn’t go to court and some ended up with a judgement. A good number of those cards have fallen off the credit reports but some of the collections are still there. 

Income:

Covid resulted in my wife not having an income. She went back to work July ’22 full time and then reduced to PT in April ’23. She started doing cake recipes and started getting small partnerships in the middle of 2022. From then to now, its probably been about $6K plus her @$26K in part time wages. 

I left my staff position at a community college in July ’22 after being there for 9 years. This resulted in a large retirement withdrawal ($50K). This was used to pay some overdue debt, get some new things for us and the kids and then was used to cover bills, expenses, rent. I went back to work FT in Feb’23. Work from home. $54K income.

My family (Wife, 2 Kids and I) live outside of Boston, MA. We rent ($2K), have 2 cars- both under my name. I would really want to keep both cars. Wife works about 10 miles away from home but her schedule would not allow us to drop/pick up kids from school with only one car. She pays for car 1, I pay for car 2. 

Started the process on Upsolve to see if I would even qualify for CH7 and I think I do, its moved me to step 2 to complete the credit counseling course. 

Debts:

Car 1- 2018 Nissan Rogue This was originally with Bridgecrest at 20% and refinance to Ally. It is now at 11%. Current on payments. $410/ month. 45 months remaining. $14.3K balance. KBB puts the value at  $14.9K

Car 2- 2019 BMW. This is with Bridgecrest. 20% This vehicle is now past due and will be assigned for repossession on 5/29/23.$800/month. 65 months remaining. $33.4K Balance. KBB puts the value at $26.7K

Federal Student Loans: $57K 

MA State Loan: $450

Upstart Student Loan,: 10416

Upstart Personal Loan: 14761

Upstart Personal Loan: 8500

Discover 1147

Credit One 1800

Credit One 750

Grain 850

Fortiva 475

Fortiva 500

Fortiva 1001

Amazon 475 

Self Financial 395

Premier 477

Money Lion 470

Collections 11-12K from the mentioned 2017-18 years that auto populated from Upsolve.

My next steps is getting my credit report from all 3 CB to make sure all debts are listed. 

Questions:

1. The judgements, I can search the court dockets and cross-reference them with the paper forms that I have. Most of them are the ones listed in the collection section. Do I add them as judgements as well? 
2. I have a $1100 balance with Klarna. Recently started getting emails from Firstsource Advantage. Do I add them now or submit the voluntary petition form once I have it? 
3. I get my direct deposit to two different accounts, NFCU and Capital One. Some of the collections, the OC was Capital One. Should I change it so my full deposit goes to NFCU? 
4. Is reaffirming the auto loans a really bad idea? Worst comes to worst- car 2 would most likely be the car that I would surrender as it has the highest payment/apr. 
5. if I do happen to miss any debt, would I have to process an amendment or would submitting the voluntary petiiton form be enough? 

If you are still here, I really do thank you for your time! 

[SUPERSQUID]

A lot of the rules when filing for bk7 vary state to state. The best advise anybody on this forum can give you is to get a consultation from a bankruptcy attorney in your area, many bk attorneys give free consultations.

Good Luck

[Creditwiser]

@SUPERSQUID is spot on. Consult with a BK attorney. Get your head straight and docs ready and lay it on the table.  

Its hard to give answers on some of your questions because as @SUPERSQUID mentioned, state by state laws vary.  Having been in your shoes in 2014 I can say that it would be a good idea to try and set yourself up as best as possible for the post BK/DC life.  Think about who you're going to burn and what will be available to you during your rebuild and having a plan for rebuild.  For example many look to Credit One and Disco during their rebuild but I see you have them listed. 

Just know that you can recover from this BK should you choose to move forward.  Just make sure you have a plan.

---

---

[-Furbz-]

Thank you to both for replying. I understand I can't get legal advise here and that it varies state by state.  I am in MA. Have submitted a request for consultation with two other offices, hopefully I'll get a response on Monday.

I work with financial aid forms and have some knowledge in tax and business law. I actually have been contemplating filing myself with the help of upsolve.

[FireMedic1]

The means test for your state for 2 people is $100,535 for 2023. If your under it. You'll file a 7. Over its a Chapt 13.

[-Furbz-]

I am considerably less than that. 

Submitted all necassary docs to Upsolve and did the first credit course yesterday morning. Forms are under review but says it could take up to two weeks before they release the forms. 

[CWESTL]

Filing Chapter 7 BK wasn't the easiest decision for me, but was the best decision. The individualized legal consultation you'll receive will hopefully provide the best direction. The only advice I'd provide is to prepare for post BK discharge in the following:

1. Maximize income and decrease expenses. May require some sacrifices and discipline, but are key to future stability/growth.  

2. Develop and execute a savings plan. An accompanying spreadsheet outlining a plan helps organize and may help keep you accountable. 

3. Strategically pursue the credit rebuilding process by cleaning your file of derogatory accounts, only applying for credit cards with high probability of approval (preferrably no AF, CLI opportunity, eventually rewards cards, cc's with terms you don't mind keeping open forever). 

4. Maximize rewards benefits, but only charging what you can and will pay in full when the statement is due. The only other preferred alternatives is if there is a 0% option for a period of time, but remain discipline.

5. Live well within your means and invest in ways that will produce more income, grow wealth and minimize/control ongoing expenses. Purchasing a home in some instances is an example. Cost of living in Boston/MA can make this path difficult, but not necessarily impossible.

6. Filiing BK and going through the rebuilding process is as much about learning and discipline than anything else. Controlling impulse purchases, minimizing wastes of money on depreciating items (luxury vehicles, designer belongings, etc.), invest in yourself (personal and professional growth) that allow you to truly prosper.  

7. Refer to this forum before applying for any credit options. 

[-Furbz-]

Update:

I filed BK7, Pro Se on 5/25. I have already completed and submitted my 2nd credit counseling course and submitted taxes, paystubs, ID, SSC and ProSe affidavits to trustee. My 341 meeting is next Tuesday. Not worried, just anxious to get it done.

I had initially wanted to reaffirm both vehicles but the more I think about it, the less I want to. AIS is handling both cases (Bridgecrest & Ally). I did receive the reaffirmation from

Bridgecrest- (BMW) they are unwilling to lower either APR or Market Value. On top of that, the car is out of warranty and has a check engine. Lower Active Grill. Looking at maybe $600 to fix. Could be more- probably will be more.

Ally, payment needs to be done and then they can issue a reaffirm agreement. But car has 73K miles and will need bearing replaced soon as the wheels shake at a certain speed. Prob going to be again $600-800 to replace.

I haven't signed a reaffirm agreement. I think I will just do a "ride-through" . My understanding is that I just have to notify AIS of that and also amend my statement of intentions? Is that correct?

[TRC_WA]

---

@-Furbz- wrote:

Update:

I filed BK7, Pro Se on 5/25.

---

Wow... that was a gutsy move considering what can happen if mistakes are made.

[NoDebt4Me2]

As a recent filer, all I can add is that your student loans will not be included in a BK. Auto loans, yes if you choose. Your CC debts yes. Judgements, most likely unless it's child support. I'd subtract the student loans from the rest and assess if it's feasible. Not an easy decision.