In desperate need of help.

[Anonymous]

Income 1100 and my husband 3100.

Amount of debt 40/50k

Reason to file bankruptcy, Scared of losing house need to get depts off our shoulders so we can afford the house payments.

We bought a house a few years back and Since then we have had some major problems with the house that needed to be fixed.

This is what caused us to go so far into debt.

The house was an older home when we purchased the house we had no clue what all was wrong with the house.

We soon found out the house was in need of major repairs as in the attic had no insulation and we live in one of the hottest states.

We found out that our roof had no life left in it even though our inspector told us it had a good 5 years left we didn't know this till it started storming and the shingles started flying off the house.

We found the hvac systems were not working during the winter months that was a good amount of money we had to take out a loan for..

So anyways here we are the house is about to be forclosed on if we don't quickly find a way to manage our debts and pay on the mortgage.

We live month to month and before I knew it we had to pay 900+ a month on credit cards and loans. I will from now on be using strictly cash. IF I don't have the cash to fix it this month I will wait till we do.

I will start making bk7 payments come the 1st of August

I was adviced not to pay on these debts till our bankruptcy dissolves them. However it will take us several months to pay off the bk7 payment plan

I'm scared that if I don't pay on these debts while paying for the bk7 payments that they will sue me and will cause alll this money I will have been paying to be able to file bk7 to be worthless.

What do I do?

Do I pay the credit cards till the file date, or do I stop paying them and make more payments to the payment plan?

I don't want this to be all for nothing but I do need a fresh start. I am under the median income for my area.

The areas median is 55k and we both together only bring in 48k However the 48k is SSDI and VA Compensation.

[Anonymous]

I'm a bit confused -- there are no payment plans in a Chapter 7 bankruptcy. Have you filed for Chapter 13 bankruptcy? Has your plan been confirmed?

If you are pursuing Chapter 13 bankruptcy, it's most likely that you are working with an attorney. If you aren't -- you should. If you are, these questions are very appropriate to refer to your attorney. She or he will have all the relevant details about your financial situation, vs. just what you posted here. 

Generally, if you filed for Chapter 13, you pay your debts through the plan payments. It wouldn't make sense to make individual payments outside of a confirmed plan. If you DID file for Chapter 7 bankruptcy, then an automatic stay would have gone into effect, generally preventing collection/lawsuit. A Chapter 7 does little for your mortgage arrears, though.

So without this information, it's hard to give good advice. Gegardless of the type of bankruptcy, I'd ask myself: Is this house, with all the structural problems, really worth it? Why are you attached to it? Do you have equity? 

[ruafraidofme]

could be a payment plan for the attroneys fees for filing chapter 7 as in they wont file till completely paid.

[Anonymous]

That is exactly the case. We don't have the money all at once so the attorney has agreed we can pay a monthly installment till the money is paid in full our account will not be filed.

I am so lost confused and stressed out. I am also beyond tired.

[Anonymous]

It's a chapter 7 with payment plan till the full amount is paid the file will not be filed. I was told that it would be okay to stop payments on the debt however reading through the internet I have came through quite a bit of research. It's not that I don't want to pay back the debt but it is an endless cycle of payments. I have so much things that require money throughout the month that everytime I have money saved on these credit cards something wrong happens at the house and that whipes away my payments. Then the cycle starts all over again. I have came real close to paying off all the debts however the closer I got it seemed the more that was going wrong with the house and my husband and I had no money to fix the problems so we ended up using the credit cards all over again.

[Anonymous]

I didn't consider payment plans for attorney fees -- thank you for the clarification. 

In general, once you have made the decision to file, discontinue making payments on accounts that will be discharged through bankruptcy. It sounds like this is what your attorney advised. If you plan on keeping the home/mortgage, either by reaffirming it or discharging the mortgage, but keeping it current, you will want to continue making payments to prevent foreclosure. Work your lender to see if a payment plan is available.

You unsecured debt (credit cards, lines of credit, etc.) may become 30, 60, or 90 days late, but it's not likely you will be sued and issued a judgement prior to filing, unless you take more than 4-5 months to file. 

Any debts you plan to reaffirm (such as secured debts like auto loans or mortgages), should be kept current, if possible.