Filing Joint Bankruptcy While Unemployed

[ooogha]

My question involves bankruptcy in the state of: Nevada

My husband has been out of work for two years and we were living on my income which has been tough. We recently lost our house (foreclosure hasn't hit, but we vacated and locks have been changed, etc.). The second mortgage is now sending notices for the nearly $13k we owe. I just got laid off yesterday so it seems that bankruptcy is now imminent. We are just at our wits' end! We pay about $240 a month in credit cards - not a huge amount as I was trying to be a decent citizen and pay our debt. Because of the house situation, the three cards we have lowered our limits to just barely above what we owe on them. So, we can't use them anyways. I do have a car payment of $240 and I need my car. Would I be able to reaffirm that debt and file bankruptcy for the credit card debt and second mortgage? If we do file, should I just stop paying my cards now? I actually won't be able to afford to pay them after next month so it won't even be an option then, but I'm thinking I should stop paying now.

Any advice is greatly appreciated. I know to get a lawyer and file is going to cost about $1200. That is a big ouch right there too.

Thanks!

[Mr. Knowitall]

If you file for bankruptcy you should be able to reaffirm your car loan while seeking to discharge your other debts. You should consult a bankruptcy lawyer about what to do in relation to your current debts, lest you inadvertently create a preference situation.

[ooogha]

Thanks... Just wish I knew if I should be paying the cc's... They are due in the next few days and with no income, it just seems futile to pay.

[Moise]

Thanks... Just wish I knew if I should be paying the cc's... They are due in the next few days and with no income, it just seems futile to pay.

This is my experience -

If you are seriously planning on filing bankruptcy, your husband has no income, and you just got laid off - Do not even bother paying another cent to the credit cards, instead, save your money for food, living expenses like renting a place to stay, car insurance, the light bill... (the very top priorities)

I have been thru bankruptcy before myself. I have been where I could not pay anything except the bare necessities. Those need to be your first concerns. Credit card companies will threaten, send scary letters, and that guy from god knows what country will call and harass. They will send it to some "Collection agency" (huhuhu, the collection agency, how scary!) . It is called "Scare tactics". The fact is - CC Companies can take months or years to actually litigate, IF they ever even bother. We had a couple unsecured loans worth around $8,000 EACH that we had not paid on for 18 months and nothing ever came of it.

If you are current on CC payments, then you are months, and probably years away from them taking you to court. If they ever bothered. Do you know how many bad loans are out there? What are they gonna do? Litigate every case?

Now about "reaffirming debt" - since you used the proper term, I assume you know exactly what that means. However, keep in mind that if you DO reaffirm any debts (and yes people do for things like a car or house) then you cannot go back and add it to the bankruptcy once it is over. So be VERY careful about this! REALLY think and do your homework on if those reaffirmed debts are going to be a problem later cause while it is true that if you bankruptcy out of a car or house you are paying on, you will lose it, but you would no longer owe anything on them.

On a personal note - Most bankruptcy attorneys can offer a free consultation and will explain the legalities of doing this, and in layman terms. They will not take any action until you pay them but just find out if you have a case and what you should do as a first step. One attorney told us, "Stop paying the creditors now so you can save money for this". Even if it took 6 to 12 months to save that money, that is less time than what it takes for creditors to litigate.

BTW, a bankruptcy WILL stop garnishments, will stop other debt-related lawsuits, etc...

You cannot easily bankruptcy out of things like tax debt, student loans, child support or other money you owe the GOVT but any consumer debt you can. Funny how Uncle Sam makes provision for us to flip the bird to creditors but not to him.

[ooogha]

Thank you so much Moise. I truly appreciate your advice. It's so hard when there's nobody to turn to. I am a little concerned about my 401k but that should be exempt, right? That's all we have. Also, not that it's likely to happen, but if we both find jobs quickly - like during the filing process - would that affect all of this? And did you use a lawyer when you went through your bankruptcy? I really can't afford one. I have about $100 due tomorrow for CCs and I think I will take your advice and not pay. What's the worst that can happen.

[Moise]

Well, what I said was merely my experience, as I am not an attorney, it cannot be called "legal advice".

I have no clue how the 401K would be effected cause we didn't have no, in fact ours was ruled a "no asset" case.
I would imagine that if the 401K is large, they might be interested in it. Also, they MIGHT be interested in the following year's tax return if it is over like $1,000 for each person filing.

Now about finding jobs quickly, well, if that happened, you could just stop the BK and rearrange finances and all that, since money would be coming in. From the time you plunk down your cash to file for BK and the day you go to see the trustee where they sign off and make it "discharged" takes usually at least two months. Once it is done, it is a done deal though after they make their ruling.

I would say on a personal note - if you don't really HAVE to file, then look into other options first. It is true that BK is a quick and easy way out of most debts, but it should be used only as a last resort. Powerful tool, but one you can use only once every 7 or 8 years.

for our BK, I think we paid the attorney $750 to handle our case and then court costs were another $450.
It is not cheap, however, it is cheaper than trying to handle ten's of thousands of dollars worth of debt you will never be able to repay, if your case is anything like ours was.

The only thing I can really "solidly advise" though is do not freak out if you are a little behind on bills. This happens. Unless you have collateral like a car that you are behind on, creditors would rather work with you than to litigate. You are not NEARLY in as bad a shape as you imagine. Like I said, I have been behind on credit bills as long as I can remember and have yet to be served.

[newjerseybankruptcy]

Even though you will be filing for a chapter 7 bankruptcy, you should be able to keep the car and sign a reaffirmation agreement. It is important to remember that you must be current on your car payments for them to approve the reaffirmation. I usually recommend that you stop paying the credit cards if you are going to file in the next month or 2. I am from NJ where we are allowed to choose between the NJ exemptions or the federal exemptions. I believe the State of Nevada does not allow you to choose federal exemptions. You will have to look at your state laws to determine whether your 401K is fully exempt. To get an idea of the bankruptcy process, timeline and other general questions, please review my New Jersey Bankruptcy Lawyer website: http://www.chapter7nj.com. Good luck!