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i'm about to file for bankruptcy in michigan and would like to do as
much of the work and filing on my own without an attorney. after i
file the initial papers, i will sign up on a list at the court for a
pro bono attorney.
my situation is this: i have 2 secured debts against my home which
equal the appraised value, 103K. i have no accounts on my credit
report showing 30 days late...all are in good standing. however, very
bad score because i have maxed out the credit cards. at this time i
don't see how i can afford to pay my unsecured debts which total 50K.
i earn 640.00 gross a week with no overtime available. in the past
three months, three of my five ccc have attempted to increase my
interest to 28%. i rejected the "offer" of 28% and closed the one
account at 8,800 to keep the 9.9% interest rate (2 weeks ago). the
other two large debts are both with the same ccc totaling about 33.5K.
the 13.8K just rolled off promotion and is at 14.99% and the other at
20K is at 4% until september. then i have two more cards at 19%,
1,500 and the other at 4,500. i have yet to file my 2001, 2002 or 2003
income tax return and i'm certain i will owe at least 1K per year cuz
i claim 6 exemptions and not enough deductions to itemize (i will be
preparing my taxes this weekend). i zeroed out my bank account 2
weeks ago after bouncing 4 checks, a first for me. better not to have
an account. i also have no liens or judgments at this time. i also
have nothing of any value to be liquidated...no retirements plans,
investments, vehicles, furniture etc. i accumulated all my debt,
except for 40K of it, in the past 2 years.
as of today, unless recommended, i will no longer be paying anything
on my credit cards because i can't maintain those payments as well as
my cost of living (house payment and utilities etc). i lead a very
simple life and can live very inexpensively. i have not prepared a
three to five year payment plan to see how the chapter 13 would work
out for me or if it's even possible. i have done very little research
on the exempt properties but what i have read is that there is a way
to keep your house. so, having said all that, can i file chapter 7
and keep my house? can i pick and choose the debts i want to
discharge? i can afford my monthly payments to pay my loans for the 2
secured debts which total 103K, it's the ccc debt i can't do. if i
lose my house, i have nowhere to go. the judge will not be looking at
me very favorably either because all of my debt, except 40K, is from
gambling. i haven't used the 3 credit cards that have the highest
debt in months. however, i have used the other two in the past 60
days i'll guess the debt incurred on those cards is probably about
3K-4K, of which 2,500 is probably from cash advances. i understand
these debts won't be discharged no matter which chapter i file.
i think i have located all the forms online necessary for filing at
www.uscourts.gov/bkforms/bankruptcy_forms.html. now i just need to
file. all advice, suggestions, recommendations, thoughts and opinions
are welcome. thanks in advance to all that take the time to read my
post and reply.
just a note: i have given up my gambling addiction and have replaced
it with learning...learning web design (currently enrolled).
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i can afford my monthly payments to pay my loans for the 2
secured debts which total 103K, it's the ccc debt i can't do. if i
lose my house, i have nowhere to go. the judge will not be looking at
me very favorably either because all of my debt, except 40K, is from
gambling. i haven't used the 3 credit cards that have the highest
debt in months.
I don't think the gambling part matters much--- especially since gambling is
legal in just about every state in the union. An unsecured debt is an
unsecured debt, regardless of how you incurred it.
Your mortgage is not an unsecured debt.
You probably can't keep the house under Chapter 7. If you have a house, etc.
which you want to keep, Chapter 13 is the best way to go--- if you can in fact
keep up with a payment plan. Unfortunately, it sounds like you have no income.
If you can scrounge together a grand or som it might be worthwhile hiring an
attorney right now, instead of waiting to have a pro bono attorney clean up the
mess for you later.
*****
Tim Horrigan <horrigan@aol.com>
*****
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i have done very little research
on the exempt properties but what i have read is that there is a way
to keep your house.
Some states have homestead exemptions, etc. However, in YOUR case, you actually
seem to have NO equity left in your home. You have unpaid debts secured by the
house which are just about exactly as large as the value of the house. And,
once you stop paying the debts, your debtors have the right to seize the house,
regardless of whether or not you file for bankruptcy.
*****
Tim Horrigan <horrigan@aol.com>
*****
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i can afford my monthly payments to pay my loans for the 2
secured debts which total 103K
Your mortgage is not an unsecured debt.
You probably can't keep the house under Chapter 7.
That would depend a lot on the homestead exemption for his state.
In at least some states he can keep quite a lot of house, and
it may be his best possible investment, because once he gets
straightened out, his house is appreciating at 103k times the
rate of appreciation in his area, which could be in excess of
10% per year, and the increase in equity is all his.
If you can scrounge together a grand or so it might be worthwhile hiring an
attorney right now, instead of waiting to have a pro bono attorney clean up
the mess for you later.
Competent legal authority could explain his state's homestead
exemption, how and when to declare it and use it, how to re-assert
the secured debt afterwards, etc. Such an attorney might give
him a good bit of advise now, and might not need the "grand or so"
until later in the process, maybe later enough that he's already
saved that much by not making the payments on the unsecured debt.
--
- David Chesler <chesler@post.harvard.edu>
Iacta alea est
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