Considering Chapter 7 Bankruptcy...


L

Lucky Lady

I have a lot of questions so I'll probably be posting more in the near
future. Here's my situation:

Married
Two kids
Unemployed (Husband works, I'm staying home w/new baby).
Husband makes Approx. $45000/year
Mortgage - $154,000
Car loan - $21,000
Credit card debt - $50,000
We both have approx. 750 credit scores (never been late on a payment)

We are really adding debt fast as our bills outpace our income. Even if I
worked, there wouldn't be a huge difference after the added day care
payment. Is bankruptcy a good decision for me? How much does is affect?
If there is a good comprehensive website that covers this, just point me in
the right direction. Is there a lawyer that someone can recommend? I spoke
to one and he told me immediately that we could file CH 7 and wipe all of
this debt away. He didn't seem to have any doubts. When I asked if they
would convert it to CH 13, he said only about 4% of all cases are CH 13.
Any help would be great. I can't believe I am even on the web having to ask
these questions. I never thought I would be at this point.

Thanks
 
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B

Brett Weiss

I have written a Bankruptcy FAQ which should answer many of your questions
about what is involved--it may be found at
www.brettweiss.com/bankruptcy/FAQ/br_faq.htm.

I strongly recommend speaking with a local bankruptcy attorney. Most offer
free initial consultations and he or she should be able to review your
specific situation and let you know what you can and can't do. If you're in
Maryland, DC or Virginia, please let me know--we may be able to help.

Take care.

--
Brett Weiss
(e-mail address removed)
www.brettweiss.com/bankruptcy

Maryland, DC and Federal bars
Member, National Association of Consumer Bankruptcy Attorneys

--> Read our Bankruptcy FAQ at www.brettweiss.com/bankruptcy/FAQ/br_faq.htm

Justice consists not in being neutral between right and wrong, but in
finding out the right and upholding it, wherever found, against the
wrong. —Theodore Roosevelt

Required disclosure and notice: We are a federally-designated debt relief
agent, proudly helping people file for relief under the Bankruptcy Code
since 1983. Pursuant to 11 USC §§ 342 and 527, we are required to provide
certain notices, which may be found at www.brettweiss.com/faq/br_faq.htm.

*****************************************************************
The Small Print: This response is for discussion purposes only.
It isn't meant to be legal advice and you shouldn't treat it as
such. If you want legal advice, speak with a local lawyer
familiar with your state's laws who can review *all* of the
facts and the law applicable to your situation.
*****************************************************************
 
D

darrenli516

To Lucky Lady,
First, I am not an attorney, and am not giving legal advice. I am a
Realtor by profession.
Your situation is not at all uncommon. But you shouldn't be led to
believe that filing for bankruptcy is the best option for you. New
federal bankruptcy laws that recently went into affect make it more
difficult for individuals to erase their debt via bankruptcy.
If your husband makes 45,000 a year, you are not bankrupt.
A bankruptcy stays on your record(credit report) for ten years.It
really should be considered only as a last resort.
You should look at other ways to pay off your debt.Perhaps get a home
equity line of credit on your house and use that to pay off your credit
cards and car loan.
And at the very least, stop using the credit cards immediately. That's
the main source of your problems.
You're spending money you don't have. Make a budget and stick to it.
Keep in mind that if you do file for bankruptcy, the trustee on your
case can, I believe, require you to first sell some of your assets to
pay your debts. Like sell your car,etc.
Also, I'd be most worried about your mortgage.
If your mortgage bank finds out(and they will) that you've filed for
bankruptcy, they very well might require you to sell the house
immediately. I've seen this happen very frequently in my area.
By all means, consult a qualified attorney in your area.
Good luck.

Darren
 
B

Brett Weiss

Darren:

Please stick to realty, and don't give opinions on things you don't know
anything about.

Among your errors:

1. Although the bankruptcy law was changed last October, in many ways it is
much easier for someone to file than it was. It in no way makes it harder
for most people to file.

2. The mere fact that the OP's husband makes $45,000 does not mean that she
cannot file for bankruptcy.

3. Transferring unsecured debt, such as credit cards, into secured debt,
such as a mortgage, can be a horribly stupid thing to do, and can result in
someone losing their home to foreclosure.

4. The Trustee can sell assets only if they have equity and are not exempt.
The vast majority of people who file for Chapter 7 bankruptcy keep
everything they own, and Chapter 13 is designed to allow people to keep
assets with equity.

5. In 24 years of legal practice, I have *never* seen a mortgage lender
require someone to sell their home merely because they filed for bankruptcy.

--
Brett Weiss
(e-mail address removed)
www.brettweiss.com/bankruptcy

Maryland, DC and Federal bars
Member, National Association of Consumer Bankruptcy Attorneys

--> Read our Bankruptcy FAQ at www.brettweiss.com/bankruptcy/FAQ/br_faq.htm

Justice consists not in being neutral between right and wrong, but in
finding out the right and upholding it, wherever found, against the
wrong. -Theodore Roosevelt

Required disclosure and notice: We are a federally-designated debt relief
agent, proudly helping people file for relief under the Bankruptcy Code
since 1983. Pursuant to 11 USC §§ 342 and 527, we are required to provide
certain notices, which may be found at www.brettweiss.com/faq/br_faq.htm.

*****************************************************************
The Small Print: This response is for discussion purposes only.
It isn't meant to be legal advice and you shouldn't treat it as
such. If you want legal advice, speak with a local lawyer
familiar with your state's laws who can review *all* of the
facts and the law applicable to your situation.
*****************************************************************
 
D

darrenli516

Mr.. Weiss,
I was simply trying to get the original poster to see things from a
different view.
And I do know a bit about the bankruptcy process.
First, just because someone files for Chaper 7, it does not guarantee
that it will be granted.The new laws apparently make it more difficult
to obtain a Chapter 7.
The decision is made solely by the trustee in any case.
And a persons creditors can show up at the hearing to have their say
and to try to collect. I have seen that happen at bankruptcy hearings.
And I didn't mean that because her husband makes 45k a year that she
can't file for bankruptcy. Anyone can file.
I just meant that according to the true definition of bankruptcy, she
is not.
And I most certainly have seen mortgage banks demand the sale of a
house when someone files for bankruptcy. Not just because someone files
in and of itself, but because of other problems it indicates. The bank
wants to make sure the homeonwer can make the necessary financial
committment to the house every month, taxes, insurance, upkeep, etc.
And if a homeowner is bankrupt, meaning they have no money and no
assets,then how can they make their monthly house payments?
Banks use different language in their mortgage contracts, but there is
always a clause that protects their stake in the house.
My office has had many listings from homeowner that have had financial
hardships, and some banks will require the house to be sold if even 1
or 2 payments are missed, let alone a bankruptcy filing.
I wanted to point out that most attorneys will always try to get you to
file, and not show you there are other alternatives.

darren
 
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R

RudeDave

Mr.. Weiss,
I was simply trying to get the original poster to see things from a
different view.
I'm sure you were trying to be nice, but you really don't know what you're
talking about. And that fact is made glaringly obvious by statements like,
"The decision is made solely by the trustee in the case" and "there is
always a clause that protects their state in the house."
 

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