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I used to make approximately $100k per year, and had bills accordingly. I was paying my bills, car payments, mortgage, etc., on-time every month. Then my job ended and in order to stay employed in the same state, I had to take a 55% pay cut. This was 7 months ago, and I now have unsecured debt totaling approx. $60K, including three repossessions and credit card debt. I consulted with an attorney, and I am told that I make too much for Chapter 7, but not enough for Chapter 13. Isn't this what bankruptcy was created for? What are my options, as now I have to worry about liens placed on my house, lawsuits from the credit card companies, etc? I have cut all but the necessary bills (mortgage, utilities, food), drive a 15 year old car with no payment...I am not living extravagantly, just barely scraping by. I don't have extra money to pay a payment plan. What can I do?

Caron · Posted: Sun Oct 05, 2008 7:05 am Post subject:

Well Jan, I understand your situation is pretty messed up. What I feel is, your income is such that the state laws would prevent you from filing chapter 7. Hence the attorney has suggested filing Chapter 13 bankruptcy.

If you cannot afford a payment plan, then it's quite tough for you to get out of this situation. This is because even if you don't file chapter 13, you may go for options like debt consolidation or settlement. But that would also require you to pay a certain amount of money.

However, there's one more option - that's a debt management plan including credit counseling wherein credit counselors help you pay off debts by planning a budget for you keeping in mind your affordability and daily living expenses.

Good luck

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