Bankruptcy now or wait?

What is the name of your state? Illinois

My wife and I live in Illinois. We moved here in October 'temporarily' and have not established residency. We have been staying with family due to me being laid off from my employer for almost a year. By the time we moved we had used all of our resources to make ends meet and were sinking very fast. We have been here almost 8 months now and cannot seem to even begin to get ahead because we assumed too much debt when i was working at a job that paid 2x what I make now.

Even if we didn't have the 'bad' debt we simply couldn't afford to live on our own plus pay our loans, car insurance and child support.

We have decided to file bankruptcy because there is just no end in sight. But, we have a few issues we need resolve first.

1. I am currently in the process of retaining a lawyer to modify an existing visitation order. The current order is vague and is missing key components like transportation. I plan to use my tax refund to pay the retainer. If we file BK, they will take the refund, right? If they take my refund, I can't modify the order.

2. We have 2 bank loans. 1 for the vehicles and another is a secured loan that my dad put up his truck against. If we file bankruptcy what happens to the vehicles? I don't care if we lose them, we can't afford them anymore and the payments and insurance are killing us. We can get a beater car for work. When we lose them, is that a 'forgiven' debt or will we still have to pay on them like with a repo?

As far as the other loan goes I know they can go after my dad. Could he transfer the loan to his name before we file to save it from hurting him?

3. do we file now or should we wait 1-2 months until after the visitation mod is filed? In the meantime do we stop paying on stuff and stash away the money to start over with?

4. I have a judgement against me that I am supposed to pay $100 a month on. Can I file BK against the judgement?

5. Where do I file BK at? I'm not a legal resident of the state I'm in, but it's a federal court thing right?

I don't know anything about bankruptcy except what I was able to research online today, and it's all pretty mind-boggling. I really need some advice about how to handle this. We've considered debt management and we can't afford the monthly payments.

I appreciate any input I can get!

[Ladynred]

I plan to use my tax refund to pay the retainer. If we file BK, they will take the refund, right? If they take my refund, I can't modify the order.

** Definitely get the order modified before you file for BK. Just have an accounting of where the refund went.

When we lose them, is that a 'forgiven' debt or will we still have to pay on them like with a repo?

**Its not 'forgiven' its discharged - you have no further liability for them whatsoever and they can never collect anything on them again.

Could he transfer the loan to his name before we file to save it from hurting him?

**There's really no 'transfer', the car would have to be refinanced in your father's name only to protect himself.

do we file now or should we wait 1-2 months until after the visitation mod is filed? In the meantime do we stop paying on stuff and stash away the money to start over with?

**Get the visitation mod filed. Its recommended to stop paying creditors, no point in throwing your money down a rat hole, save it for your attorney.

I have a judgement against me that I am supposed to pay $100 a month on. Can I file BK against the judgement?

***Absolutely. Just make sure that the judgment is vacated in the local court once you get your discharge.

Where do I file BK at? I'm not a legal resident of the state I'm in, but it's a federal court thing right?

** Yes, its Federal, but there ARE residency requirements because state laws come into effect for exemptions and local court rules. You have to have lived in the state you file in for the greater part of the 180 days prior to your filing date.

When you say you haven't established residency, what do you mean ? Does your mail come to you in IL ? Do you have an IL driver's license ? Do you have any property in the other state ?

Ladynred,
Thank You for your quick response and honest answers!

When you say you haven't established residency, what do you mean ? Does your mail come to you in IL ? Do you have an IL driver's license ? Do you have any property in the other state ?

Answer: Our personal mail comes to this address. None of the utilities or anything are in our name. We never transferred our driver's licenses or car registrations because we only planned to be here for a couple months and then moving again. We live in a 'tri-state' area and our goal was/is to move to Wisconsin. Driver's license and Car registrations are still in Iowa. There is no other property in any other state.

We have lived in Illinois since 10/1, so it has been more than 180 days

[I AM ALWAYS LIABLE]

"Get the visitation mod filed. Its recommended to stop paying creditors, no point in throwing your money down a rat hole, save it for your attorney."

=========================================


My response:

I know there's a joke in there somewhere!

IAAL

[VR_Hunter]

do we file now or should we wait 1-2 months until after the visitation mod is filed? In the meantime do we stop paying on stuff and stash away the money to start over with?

**Get the visitation mod filed. Its recommended to stop paying creditors, no point in throwing your money down a rat hole, save it for your attorney.**

The Lady is correct, however, be careful of how much money you try to save. Every state has a different amount the trustee will allow you to keep. My state is $400 cash. If married, $800. So, don't pay the creditors (waste of needed money if you are a honest BK filer), keep receipts for what you do buy (no luxury items), and don't hoard the cash.