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Question
I live in California and I filed Chapter 7 back in 2002. It was discharged that same year. I filed because my husband of 11 years left and I became solely responisible for our two small children. I was a stay at home mom at the time. We had debts over the course of our marriage that I just couldn't pay alone. I was greatly emabarrased but had little to no choice.
Fast forward to 2009, I've had full-time employment since 2002 but income is minimal. I grossed $28,000 last year and my only other souce of income is SSI of approximately $400 a month because my son is disabled.
I have been eeking out an existance and will freely admit I have used credit cards to live on. It's completely my fault. Raising a family with less than $30,000 a year is so difficult. I don't mind so much for myself but it's hard with two kids. Things have just gotten so expensive in the past year or two and now I am in a position now that I am unable to make my minimum payments on my credit cards. This is the first time since I filed back in 2002 that I am unable to pay all my bills. I'm so mad at myself and once again ashamed.
I took a long, hard look at my finances and after paying my rent, car payment, car insurance, utilities, gas, groceries etc (the things you have to have)I have about $300 disposable income a month to use for credit cards and whatever happens to come up (renting a movie, school clothes, car breaks down etc). My minimum payments for all my credit cards is $425.00.
Could I file chapter 13? Should I just look into a debt management plan? I'm afraid of wage garnsihments as I have very little income anyway.
Thank you for your time.
I am sorry that you have faced so much hardship. It's not easy to raise a children all by yourself, especially when one of them is disabled.
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It sure sounds like you could do a Chapter 13 case. There is a good likelihood the monthly payment will be under $300. Maybe a lot under that. You are probably eligible for a 36 month Plan, and then discharge the unpaid remainder of your debt at the end of the Plan.
Your next step is to consultation with an experienced local bankruptcy attorney for possible Chapter 13 representation. I sure hope this all works out for quickly. You can do some further general reading about Chapter 13 in my Bankruptcy Guide at http://www.debt-relief-bankruptcy.com/guide-new.asp
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Answers by Expert:
Los Angeles Bankruptcy Lawyer Leon D. Bayer
Expertise
Leon Bayer has successfully represented clients in bankruptcy for over 30 years. He is frequently called upon by the media, the California Bar and other associations to provide insight and help educate attorneys on bankruptcy issues. If you or other readers want to keep up with my blog postings about life in and out of bankruptcy, you can follow my blog at http://www.bankruptcyblogger.org/ and my personal web site at http://www.debt-relief-bankruptcy.com and A Human Guide to Bankruptcy at http://www.thebankruptcyguide.net/ Leon also writes about bankruptcy law for Nolo, see http://www.nolo.com/law-authors/leon-bayer.html and his "Ask Leon" bankruptcy law blog column at http://blog.nolo.com/bankruptcy/
Experience
Leon is a Certified Specialist in Bankruptcy Law by the State Bar of California, and has been a practicing bankruptcy lawyer in Los Angeles, California for 33 years.
Organizations
National Association of Consumer Bankruptcy Lawyers, California Bar Association, Los Angeles County Bar Association.
Publications
Author, ?The Essentials Of Chapter 13,? Daily Journal Report, December 18, 1987.
Contributing Editor, Basic Bankruptcy, California Practice Handbook, Matthew Bender 1992, 1993.
CEB Consultant, CEB-Personal and Small Business Bankruptcy Practice in California, 2003.
Education/Credentials
B.A., J.D.
Awards and Honors
President, 1995-1996-Los Angeles Bankruptcy Forum; Member - Los Angeles County Bar Association Committee on Commercial Law & Bankruptcy, 1988. Law Advisory
Commission-Personal & Small Business Bankruptcy Law of the State Bar of California, 1996-2000
MR. BAYER SAYS: The big banks and credit card companys have been working overtime for many years to undermine the Consitutional right of the American people to be able to claim bankruptcy protection. In 2005 the banking lobby successfully convinced Congress and the President to make the laws and proceedures more complicated, hopeing that it will stymie legitimate people from filing bankruptcy. They succeeded in gaining these complex new legal proceedures by greasing the legislative system with hundreds of millions of dollars in "campaign contributions." The good news for the American people is that while the new laws have made the proceedures needlessly complex to the point where inexperienced people can't help but trip over the maze of new rules and regulations, the process is still doable, especially with a lawyer who is well trained and experienced in this specialty.
Past/Present Clients
I have probably handled something on the order of about 15,000 bankruptcy cases thropughout my career.
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