Struggling trying to keep head above water.....Debating filing bankruptcy! HELP!!

[MyFico_704]

My wife and I have been struggling the past 8 months keeping up with bills. Each month we're just getting by and only have less than $150 a month to spare out of a combined income of $100,000.  I never thought anyone with income of 100k would have to live paycheck by paycheck!!

1st mtg - 198k (Wells Fargo)

2nd mtg - 49k (Wachovia)

HELOC - 39k (Wachovia)

Property worth - 260k tops!  At the top of the market exact house was selling for $320....my guess....but houses in my community are just sitting there..no new construction and nothing moving in existing sales.  (Charlotte, NC)

cc1 - 33k (BoA)

cc2 - 14k (Wachovia)

cc3 - 10

cc4 - 8k

All is in my name alone except for cc3 and cc4.  Between these bills and monthly expenses including daycare...we're struggling.  we've cut back some but still barely making it. Thus far we've NEVER been 30 late on anything but have already seen credit score drop from almost 800 to mid 600's (last checked in June). 

I worked out a repayment plan with BoA and got a reduced rate of 2.9% from 28%. Unfortunately I had to close out the BoA card to get that deal...new payment of $640 vs $1,175 previously.   8 yrs of perfect credit closed! But hey...I got a great deal!!

How can I get out of this mess?  We are debating for me to file bankruptcy, not sure which one is best for me 7 or 13?  We'd love our house and would like to keep it.  The other issue is because the lenders are my employers, Wachovia now..but soon to be WF, how would that impact my employment? I'm also planning to call WF and see if I can refinance the 3 mortgages into 1 combined amount..clearly I can pay all 3 now...so combining them would certainly lower my monthly payment...so I would definately afford that. 

If I can work out something with WF/Wachovia...I may not need to file bankruptcy...but what are my chances?  What can I get rid of if I do file?  The HELOC is secured to the house...so I don't think that can be wiped out.  But since the homes value is less than what I owe..is there a way to file bankruptcy and wipe out that difference?

I got into this mess myself..no one to blame but me.  It is a learning experience!  As I said earlier..I've always wanted to make $100k a yr...just never thought someone making this money would live paycheck to paycheck! 

Any suggestions/recommendations would be greatly appreciated!

[Anonymous]

I cannot tell you what to do, only you can make that determination. I will tell you this. For 10 months, I paid $800 to my creditors for card balances that continued to climb. During that time, I was receiving letters from my creditors saying they were going up on the interest rate. I tried to work it out, I honestly did, but they were no interested in doing that. It is almost like they wanted me to file so I did. It was the best thing I ever did because now I sleep at night knowing that I tried to be honest and pay the bills that I had made. The only thing that troubles me is that I wish I had my $8000 plus that I paid on those cards because at the end of the day, it was NOT appreciated. If it had been, they would have tried to work it out with me but they didn't.

I know and understand the stress. I can only imagine how it would be compounded if I worked for one of my credits. That must really be hard.

I wish you the best of luck and if you decide to file, you will know when that time comes. 

Best wishes. 

[Anonymous]

Sweet Lord man..  You are Leveraged out the Wazu!     

I know how you feel,  (and I live in Charlotte too!)  even folks with 100K income are living pay-check to Paycheck now adays.  Looking at your Credit Card debt, you were probably keeping up with the Fort Mill, Concord, Lake Norman "Joneses"..  and got caught up like a lot of folks did.  I have some real sympathy for you, its really easy to get where you are without realizing it.

So my Advice to you is this..

If your Struggling now, which with $104k of debt OVER your mortgages,  you are probably not going to make any real headway and your Credit rating and quality of living will continue to diminish.

Its a fact jack.  Once your in that deep, digging out is **bleep** near impossible.  You can try, you can fight it,  you may even be able to pull it off. .  but really.. Your neck deep in it.

Now.. Bankruptcy is the last resort for anyone,  and I always try to encourage people to work through their debts.  

The question is you need to answer for yourself is this;

1)  Do you want to Keep your House?

2) Are you planning to stay where you are for the next 2+ years? (not move or switch jobs?)

3) Do you have everything you need if your access to credit dried up completely? 

4) How would you feel if all of your bills went away?

5) Can you handle a second chance and not screw up again.. I mean real change?

 I dont know your situation other than what you have.. but here are some options;

A> Start over CLEAN.   Keep a Car or two, your personal assets and thats it.  BK the House, Credit cards and everything else down the toilet, along with your old life.  Get an apartment that is affordable.  Let it all go, live off of cash for a couple of years,  buy only what you need,  Bank all of the money you were sending to credit cards and equity debt and work to rebuild your credit by being clean for 2+ years.    At the end of that two years,  take all of that money you saved from being debt free and frugal and look at a modest house.  Pardon my language but "F8%& the Joneses".   You dont really need to live like you have been and you have a chance for a clean start.  Your stress level will go from 9.5 to about a 2 for a while..  as long as you dont pine for anything or expect credit for a couple of years,  its a time of "zen".

B> Start over "Dirty".   Keep your house and work out a deal to save what you can of it.  Now.. Your mortgage needs to be paid, constantly from the get-go.  Dont let it slip.  Ditch the CC Companies and other debt and try to have some "relief".   Realize that addiction to retail is going to go cold turkey on you and you are going to have 2-4 years of not buying anything on credit (which is probably good for you).. so no drooling over anything.  If you can handle a lot of pain to shed a little debt..  then dirty is your answer.  That 9.5 stress level will go to about a 7.. it will be a struggle.  Now.. I did this myself and all I got for my trouble was a damaged credit rating that would have been no better had it just let everything like like option A..    

C> Dont file BK and try to work out the Debt.  Your Stress level sounds like its a 9.5 right now..  It will probably be at 11 for a couple of years, but you will have saved your credit rating for what its worth.. which really doesnt mean all that much in the grand scheme of things compared to what you are going through now..

Now.. Do me one favor please.. 

You will need to fundamentally change your lifestyle no matter what you do.  Walk around your house, look in your garage and attic..  think of the meals yo have enjoyed..  then look in the mirror and see you are the same guy without all of that **bleep** in your life and you never needed it in the first place.  

The things YOU own, end up owning YOU!

Good luck, and best wishes. 

[DI]

---

@Anonymous wrote:

Sweet Lord man..  You are Leveraged out the Wazu!     

I know how you feel,  (and I live in Charlotte too!)  even folks with 100K income are living pay-check to Paycheck now adays.  Looking at your Credit Card debt, you were probably keeping up with the Fort Mill, Concord, Lake Norman "Joneses"..  and got caught up like a lot of folks did.  I have some real sympathy for you, its really easy to get where you are without realizing it.

So my Advice to you is this..

If your Struggling now, which with $104k of debt OVER your mortgages,  you are probably not going to make any real headway and your Credit rating and quality of living will continue to diminish.

Its a fact jack.  Once your in that deep, digging out is **bleep** near impossible.  You can try, you can fight it,  you may even be able to pull it off. .  but really.. Your neck deep in it.

Now.. Bankruptcy is the last resort for anyone,  and I always try to encourage people to work through their debts.  

The question is you need to answer for yourself is this;

1)  Do you want to Keep your House?

2) Are you planning to stay where you are for the next 2+ years? (not move or switch jobs?)

3) Do you have everything you need if your access to credit dried up completely? 

4) How would you feel if all of your bills went away?

5) Can you handle a second chance and not screw up again.. I mean real change?

 I dont know your situation other than what you have.. but here are some options;

A> Start over CLEAN.   Keep a Car or two, your personal assets and thats it.  BK the House, Credit cards and everything else down the toilet, along with your old life.  Get an apartment that is affordable.  Let it all go, live off of cash for a couple of years,  buy only what you need,  Bank all of the money you were sending to credit cards and equity debt and work to rebuild your credit by being clean for 2+ years.    At the end of that two years,  take all of that money you saved from being debt free and frugal and look at a modest house.  Pardon my language but "F8%& the Joneses".   You dont really need to live like you have been and you have a chance for a clean start.  Your stress level will go from 9.5 to about a 2 for a while..  as long as you dont pine for anything or expect credit for a couple of years,  its a time of "zen".

B> Start over "Dirty".   Keep your house and work out a deal to save what you can of it.  Now.. Your mortgage needs to be paid, constantly from the get-go.  Dont let it slip.  Ditch the CC Companies and other debt and try to have some "relief".   Realize that addiction to retail is going to go cold turkey on you and you are going to have 2-4 years of not buying anything on credit (which is probably good for you).. so no drooling over anything.  If you can handle a lot of pain to shed a little debt..  then dirty is your answer.  That 9.5 stress level will go to about a 7.. it will be a struggle.  Now.. I did this myself and all I got for my trouble was a damaged credit rating that would have been no better had it just let everything like like option A..    

C> Dont file BK and try to work out the Debt.  Your Stress level sounds like its a 9.5 right now..  It will probably be at 11 for a couple of years, but you will have saved your credit rating for what its worth.. which really doesnt mean all that much in the grand scheme of things compared to what you are going through now..

Now.. Do me one favor please.. 

You will need to fundamentally change your lifestyle no matter what you do.  Walk around your house, look in your garage and attic..  think of the meals yo have enjoyed..  then look in the mirror and see you are the same guy without all of that **bleep** in your life and you never needed it in the first place.  

The things YOU own, end up owning YOU!

Good luck, and best wishes. 

---

AMEN!!

[Anonymous]

Read these first, before you do anything.

Considering Bankruptcy?
http://ficoforums.myfico.com/fico/board/message?board.id=generalcredit&thread.id=17383

Don't Be Afraid Of Bankruptcy
http://ficoforums.myfico.com/fico/board/message?board.id=bankruptcy&thread.id=19

12 myths about bankruptcy
http://ficoforums.myfico.com/fico/board/message?board.id=bankruptcy&thread.id=20

Bankruptcy FAQs
http://ficoforums.myfico.com/fico/board/message?board.id=bankruptcy&thread.id=51

[marty56]

I would look into a Debt Managment Plan (DMP).  I think they could reduce your interest rates and any OTL/Late fees.  You must be able to afford the payments though and the longest you can be in the program is 5 years.  I would take a long hard look at the home.  Refiing into a single payment would help if it will lower your payments otherwise I might sell it, even at a short sale just to get a clean start.

As DI said, you need to take a hard look at the way you manage money.  I am the former owner of over 70k of debt so I have been where you are now.

I would also take a look a Dave Ramsey.  He has helped people in your situation and they may have any idea of what the best option is for you.  I would only go BK when it was my last resort.