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WALLSTREETESQ
WALLSTREETESQ, Attorney
Category: Bankruptcy Law
Satisfied Customers: 17080
Experience:  14 years exp., CH 7 AND 13 Bankruptcy cases, AFL-CIO UNION PLUS, UFT NYSID AND ALL MAJOR UNIONS
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We are on the brink of my husband being laid off of work and

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We are on the brink of my husband being laid off of work and I am a stay at home mom. We are barely making it on his salary anyway, so what are our options for dealing with our credit card debit and possible loss of income?

WALLSTREETESQ :

Hello I am a licensed attorney here to help you with your question, please review my response and do not hesitate to ask for clarificati on

WALLSTREETESQ :

This is an unfortunate situation,

WALLSTREETESQ :

do you own a house?

WALLSTREETESQ :

How much does you husband make now?

WALLSTREETESQ :

How much debt do you have?

Customer:

$65,000 in credit cards

Customer:

2 cars loans, a house and student loans

WALLSTREETESQ :

can you pay the mortgage?

WALLSTREETESQ :

do you have any equity in the homes or cars?

WALLSTREETESQ :

how much do you make together a year?

Customer:

Our main goal is to keep the mortgage paid. We bought the house a year ago in June, but there may be some equity because we are in a new neighborhood where they are building the last house.

Customer:

My husband makes $120,000 a year

Customer:

The cars are both a year old

WALLSTREETESQ :

a married couple filing jointly in North Carolina may protect up to $70,000 worth of equity in a home.

WALLSTREETESQ :

So the home could be protected, if he makes $120,000 a bankruptcy is not possible, today,

WALLSTREETESQ :

however, if he loses his job, he can file a bankruptcy and wipe out all debts,

WALLSTREETESQ :

and just pay the mortgage,

WALLSTREETESQ :

if the cars have equity, the trustee may take them as well,

Customer:

Ok, what if we take the severance package and wait for the creditors to offer us a payoff amount that is a fraction of what we owe, would that help our credit any or should we just rip it off like a band aid and declare bankruptcy?

WALLSTREETESQ :

If the equity in your car is more than $3,500, you may be able to cover the extra equity by using a wildcard exemption. In North Carolina, you can apply up to $5,000 of the unused portion of your homestead exemption to any property. This is called a wildcard exemption. Also, North Carolina has another constitutional personal property exemption of $500 that can be used to protect your motor vehicle. These additional exemptions can be combined with the motor vehicle exemption to cover any extra equity above $3,500

WALLSTREETESQ :

A severance package would help, I would not pay off the debts,

WALLSTREETESQ :

as any charge off or settlement would still make you liable for the full debt as they would issue you a 1099, and the canceled amount would be taxable income,

WALLSTREETESQ :

it is best to use the severance for the home mortgage, and after the severance is over file a bankruptcy

WALLSTREETESQ :

to get rid of all the unsecured debts,

WALLSTREETESQ :

After bankruptcy, your credit will improve after 12 months if you pay your mortgage on time,

Customer:

So we need to wait until the severance is gone before declaring bankruptcy?

WALLSTREETESQ :

it depends how much you are givven,

WALLSTREETESQ :

given,

WALLSTREETESQ :

at $120,000 a year or 10,000 a month that is too high to file,

WALLSTREETESQ :

The Court looks at the last 6 months income level,

WALLSTREETESQ :

so you may want to wait a few months, and file,

Customer:

He will probably get approx. $30,000 in severance. There is no equity in the cars and minimal in house. Will the bankruptcy hurt my husbands and/or my ability to secure employment?

WALLSTREETESQ :

If he works in a financial position it may hurt him, as they do a credit check,

WALLSTREETESQ :

however, in most cases employers do not run a credit check on employees,

Customer:

Ok, he is an engineer and I am a teacher.

WALLSTREETESQ :

It would not be a factor in that case,

WALLSTREETESQ :

If he is given $30,000 he may want to use most of it for the home mortgage,

WALLSTREETESQ :

and wait a few months to file, as he should not have much assets in a bank when he files bankruptcy as the trustee can take it,

WALLSTREETESQ :

only $5000 is allowed to be kept when you file.

Customer:

Ok, so if he is laid off, we were planning on paying only the necessary bills, but not credit cards immediately after the lay off announcement. Is that a good plan (trying to conserve as much money as possible since we don't know how long he will be without work)? How do we discuss this or handle it with the creditors?

WALLSTREETESQ :

do not pay the creditors,

WALLSTREETESQ :

advise them you will be filing bankruptcy,

WALLSTREETESQ :

or that you cannot pay them at this point,

WALLSTREETESQ :

they will give you atleast 3-6 months before they try to collect

Customer:

Is there anything else we should keep in mind if we are headed towards bankruptcy? Can they come back for their money once my husband gets a job or even if he gets one before the hearing?

WALLSTREETESQ :

the creditors cannot come back, after a bankruptcy,

WALLSTREETESQ :

the best time to file is when he is not working,

WALLSTREETESQ :

and before acceptance of a new job,

WALLSTREETESQ :

if he will be working, a chapter 7 may be difficult,

WALLSTREETESQ :

also, do not pay any creditors, and use the money for the home, even consider paying down the mortgage as you do not want to have much in your bank accounts when you file.

WALLSTREETESQ :

If you have any further questions please do not hesitate to ask.

Customer:

You have given us some amazing information and we cannot thank you enough. The road ahead may not be pretty, but at least we know what our options are. Thank you again!

WALLSTREETESQ :

Good luck, and if you have any further questions please do not hesitate to ask. If satisfied with our service please provide us with positive feedback.

WALLSTREETESQ and other Bankruptcy Law Specialists are ready to help you