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Hello all, I am glad that I stubled across this site.

Long story short I was hurt on the job, and currently recieve Workers Comp and SS disability. To make matters worse we then lost everything in Katrina and had to start over with my income substantially reduced, and my wife's income also reduced due to getting a job that paid less than her pre-hurricane employment.

We eventually fell behind on our credit card payments, and owe 3 credit card companies a lot of money. We just recieved a summons on one account and are being sued for $7,000+ 2 years of interest at 8%. The total amount of bad debt that we have is in the neighborhood of 14k or so.

In addition to that I have some small unpaid medical bills that WC hasn't covered, but these are minor. I also have a balance of about $700 with my credit card. Our biggest expense, besides fuel is our car that we have a ton of negative equity on. Prior to the storm I made several bad vehicle purchases, and today we have a $500 a month car note.

We fall below the median income for our state, and we are seriously considering filing chapter 7. Here are our questions:

1. If we file for chapter 7 do we have to keep the car, or can that be filed as well?

2. Will the bankruptcy stop the pending litigation? I tried to buy myself some time by disputing the debt.

3. Is $900 a reasonable price to file bankruptcy. This is the total price quoted to us by the lawyer.

Thanks for your help.




In a Chapter 7 BK, I believe you can keep the car, but it has to be reaffirmed and you can't be late on the payments once you've signed a reaffirmation agreement.

Once your BK case is filed, it will stop the pending litigation, and creditors are not allowed to contact you anymore.

Sub: #1 posted on Sun, 08/10/2008 - 16:51

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I'm not completely sure about the car since we didn't have one to give up when we filed out BK. I THINK that you could elect not to keep it, and then the creditor would not be able to get a deficiency judgment against you for the difference between the sales price and the loan amount. I know that in our case, our attorney advised us not to reaffirm our mortgage, even though we are keeping our house. She said that by not reaffirming, since we currently owe more than the house is worth, if something should happen and we lose the house later on, then the lender can't get a deficiency judgment against us for the amount that we currently owe which is over the fair market value.

BK will stop the pending litigation.

$900 sounds like a very reasonable price to me. We paid $1695 plus $299 filing fee. We have a sole-proprietorship, and that cost an extra $300, but the attorney's price would have been $1395 even without that. I think prices vary by location somewhat, so you might want to check your local attorneys. I just looked in the phone book and called several of them and asked for an approximate price. Most of them were happy to give me a ball park price over the phone.

Good luck!

Sub: #2 posted on Sun, 08/10/2008 - 18:27

alias1958 alias1958

(Posts: 1230 | Credits: 79.88)

Thanks for the replies.

We are going to make a few calls tomorrow and try to get some price ranges. I liked the first guy we consulted with, but I prefer being thorough, especially with something like this.

Sub: #3 posted on Mon, 08/11/2008 - 16:17

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