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Author: married2debtor Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 308452  
Subject: Considering Bankruptcy (semi-long) Date: 1/19/2001 2:50 PM
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Hi All,
I am new here to the motley fool. I looked on the bankruptcy board but there does not seem to be much discussion over there. I would love some input from the members of this board:

My husband probably has around 45K of debt. (We keep our finances completely separate -- long story and I know this is a topic of its own);

He has a hard time making ends meet because his child support payments alone are 60% of his take home; on top of that he has alimony and the children's medical bills which because of a couple surgeries is quite large.

He can probably discharge only about 25K of his debt; the other debt is for a student loan and for items that he is required to pay per the divorce decree. (He went thru a major depression and his wife basically write the divorce decree; he didn't even get an attorney and that is why he pays so much in child support; in addition to paying all medical bills; the depression has lifted but now he is paying enormous amounts to the ex-wife). Now she wants him to pay for private schools.

There is absolutely NO extra money. We have squeezed it from everywhere possible and he is working 2 jobs.
Is it worth it to file bankruptcy for only 25K? We have researched this quite a bit so I know more about Chapters 7 and 13 then I ever wanted to know; I know about 10-year black mark etc....

Is there anyway to negotiate with creditors for only accepting part of the debt instead of getting nothing from a bankruptcy? Currently, we have been putting the debt on teaser rate credit cards and switching to another one when the teaser rate expires.

If he goes bankrupt and get back on his feet in a couple years, is there a way to take back the bankruptcy; pay off the old debt and have the black mark removed?

I am paying off my own debts which are not enormous but I can't really help him. We have done every LBYM strategy there is. Roommates, eating A LOT of rice and beans, not going out, second job, walking instead of driving etc...

Does anyone have advice?
Thanks so much.

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Author: ishtarastarte Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 54771 of 308452
Subject: Re: Considering Bankruptcy (semi-long) Date: 1/19/2001 2:58 PM
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He has a hard time making ends meet because his child support payments alone are 60% of his take home; on top of that he has alimony and the children's medical bills which because of a couple surgeries is quite large.

The first thing I would do is to get an attorney NOW and get the payments adjusted; unless he has 6 kids, he's paying too much! Be prepared to show his income, and his debts and what he needs to live on.

Ishtar

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Author: kokobreen Three stars, 500 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 54772 of 308452
Subject: Re: Considering Bankruptcy (semi-long) Date: 1/19/2001 3:35 PM
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Actually, how much he owes makes no bearing on how much child support is paid. If that was the case, everyone would rack up huge credit card bills, put everything in the 401k, etc to get out of paying child support.

In Iowa the child support is calculated on the number of kids, then the gross income (minus taxes, health insurance provided for the kids) of the father and mother to determine a percentage. That's it.

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Author: Leviathan Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 54774 of 308452
Subject: Re: Considering Bankruptcy (semi-long) Date: 1/19/2001 3:44 PM
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My husband probably has around 45K of debt. (We keep our finances completely separate -- long story and I know this is a topic of its own);

He has a hard time making ends meet because his child support payments alone are 60% of his take home; on top of that he has alimony and the children's medical bills which because of a couple surgeries is quite large.


The first thing your husband needs to do is to get a lawyer and get these support payments adjusted. He needs to take care of his kids, certainly, but he's not doing any of them any good if these payments take him down. That's way out of line and needs to be fixed. Once that's done you should be able to find more cash that you can use to pay off the debts.

If you haven't already, you can contact the student loan people and see if you can get them deferred. The interest will still be building, but you won't have to make the payments for six months (I think). That should help with cashflow.

You certainly can ask the creditors to settle for less than you owe, but since you've said that you don't have any money it probably won't do you any good. They will often settle on late accounts for a lump sum payment, but you can't do it because you don't have it. If you do make a deal, make sure that you get something in writing that says that they agree to settle the account "in full" for a payment of $x received on or before mm/dd/yyyy. Otherwise, you'll probably just get shafted when they "forget" the deal.

Hopefully, these tips will help you to avoid bankruptcy.

Leviathan

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Author: mlomker Two stars, 250 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 54776 of 308452
Subject: Re: Considering Bankruptcy (semi-long) Date: 1/19/2001 3:50 PM
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Is there anyway to negotiate with creditors for only accepting part of the debt instead of getting nothing from a bankruptcy?

You can talk to CCCS first. They can help set up payment plans that are affordable. Please be aware that your credit is pretty much ruined, though (late payments and "payment plan" usually end up in your credit report).

I think you should talk to a bankruptcy lawyer. Make sure that you won't end up being responsible for his debts after he files! Otherwise you could end up in bankruptcy as well.

If he goes bankrupt and get back on his feet in a couple years, is there a way to take back the bankruptcy; pay off the old debt and have the black mark removed?

No. Bankruptcy is not revocable.



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Author: mlomker Two stars, 250 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 54778 of 308452
Subject: Re: Considering Bankruptcy (semi-long) Date: 1/19/2001 3:59 PM
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The first thing I would do is to get an attorney NOW and get the payments adjusted; unless he has 6 kids, he's paying too much!

I'd talk to an attorney for sure...be aware that such fights become incredibly expensive and bitter.

Child support percenteges vary from state to state. In MN I think it is 30% for the first child and 10% for a second. Usually the father is responsible for 1/2 the medical and childcare expenses. You certainly shouldn't have to pay for private schools!



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Author: ishtarastarte Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 54784 of 308452
Subject: Re: Considering Bankruptcy (semi-long) Date: 1/19/2001 4:35 PM
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In Iowa the child support is calculated on the number of kids, then the gross income (minus taxes, health insurance provided for the kids) of the father and mother to determine a percentage. That's it.

Well, I don't know any single moms that are getting 60% of dad's income for child support. If he is paying 60% of gross, that's too high. Around here, from the people (moms and dads) that I know, 30% for one kid is standard, then it goes up incrementally for more kids (something like 35% for two kids, 40% for three - not sure on the #s, but that's the idea.)

Child support should help children maintain a similar standard of living that they would enjoy if both parents lived together still, but it does not have to PUNISH the non-custodial parent

Ishtar
(speaking as a single mom who doesn't get any child support)

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Author: cable666 Big red star, 1000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 54788 of 308452
Subject: Re: Considering Bankruptcy (semi-long) Date: 1/19/2001 5:25 PM
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I think BK for your situation would be a real dumb move.

If you are already behind on payments for the CC's, then it may be time to stop paying them for a while and instead pay for an attorney to get the child support payments reduced.

Having never delt with child support issues myself, I may not know what I am talking about. You mention that you two keep you finances separate and they HE pays 60% of his income towards his children. What does the court use as the basis for a maximum percentage? His income or his family income (you and him combined).

Tell his ex to forget private school.

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Author: careerstrategist Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 54793 of 308452
Subject: Re: Considering Bankruptcy (semi-long) Date: 1/19/2001 6:58 PM
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Yep, you're right, you don't know what you're talking about. He can't get the payments reduced in order to pay his credit card bills. The kids come first. The only thing that may happen is that he may see a modification in the form of a raise for the children. He needs a part time job!

careerstrategist

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Author: ClearSailing Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 54794 of 308452
Subject: Re: Considering Bankruptcy (semi-long) Date: 1/19/2001 7:05 PM
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Hi,
First mistake was to not have his own attorney. My
ex tried to get me to do the same thing. It would
appear your whole situation needs to be re-evaluated
in the courts. Second, there are organizations out there that offer exactly what you need. They consolidate all of your debt. It is not like a new
loan. They actually work with your existing creditors
to get them to reduce both the interest rate, and
minimum payment. I have looked into this briefly myself, and it certainly is worth looking into. They
do charge a fee, but will save you money in the long
run. Your husband needs to quit playing the victim
to his ex-wife. Time to be assertive. Drag her into
court, and see what she is spending HER money on, and
get things re-evaluated. As an ex-wife myself, there
is no way I would want my ex to be suffering at my hand. Clearly, we don't know all of the details of
the split. My suggestion, be a great dad, try to
do what's right for the kids, including spending lots
of time with them, and be sure the arrangement is fair.
If it's not fair and just, then get it fixed.
Bankuptcy will help noone here, and the ex-wife needs
to realize that.

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Author: Stockbuyer2 Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 54814 of 308452
Subject: Re: Considering Bankruptcy (semi-long) Date: 1/19/2001 10:42 PM
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his child support payments alone are 60% of his take home

I think your first step should be to contact an attorney. Child support should not be that much of his salary. I would think that he could even have the courts allow him to split the after insurance cost of the medical bills with his ex. As far as private schools go, it would be great if you could afford half for them but at this point but from what you've said of his finances I don't think he can afford it. I think he should start asking what is the ex wife paying for. I think that both parents should be responsible for the cost of the children.

Stockbuyer2

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Author: ishtarastarte Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 54816 of 308452
Subject: Re: Considering Bankruptcy (semi-long) Date: 1/20/2001 12:09 AM
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I remember seeing a few "father's rights" sights, and pulled this one out of my history: http://www.fathersunited.com/

May be a place to start.

Ishtar

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Author: etm123 Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 54819 of 308452
Subject: Re: Considering Bankruptcy (semi-long) Date: 1/20/2001 1:37 AM
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Look to get the support revised, but remeber attorneys are not free and this will be a sizable expense.

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Author: wildgirl Big gold star, 5000 posts Top Favorite Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 54821 of 308452
Subject: Re: Considering Bankruptcy (semi-long) Date: 1/20/2001 7:14 AM
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AMEN!

wdg :>
paying lawyers since 1993!

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Author: MerriSedai One star, 50 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 54936 of 308452
Subject: Re: Considering Bankruptcy (semi-long) Date: 1/21/2001 4:22 PM
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THE FOLLOWING IS NOT LEGAL ADVICE. PLEASE TALK TO YOUR ATTORNEY ABOUT YOUR SPECIFIC LEGAL SITUATION.

I need to echoe a few voices here. I am a former Child Support Enforcemnet attorney; after that gig, I went into private practice representing mostly fathers in child support cases.

First, find out what he should be paying according to your state laws. Forget the "averages" given here; each state has its own and some are 'way out of line with the others. The best you can do is what YOUR state permits.

How do you do this? See if your local child support agency can or will tell you for free. In my previous state, if you told us the numbers (mom's and dad's take home pay and number of kids) we'd "run the formula" and tell you what it should be. If the agency in your state doesn't do it, see an attorney. Try to find one with a "free consultation" approach, and hope this can be included in what he or she defines as a consultation. DO NOT HIRE AN ATTORNEY AT THAT POINT. JUST TAKE THE NUMBERS AND GO HOME.

Take your information and calculate what it will cost you to back to court. Add in the attorney's fee, any lost income from the day(s) in court, the possibility she will get an increase in alimony to offset the decrease in support (ask the lawyer about this -- it happens a lot in some states, not at all in others).

Now, figure out what you will save over the life of your child support payments. If the child in question is in his or her late teens, the cost of going back to court may offset any future savings. (Also figure out how long it will be before you are set to have the support increased. In my state, it was a 15% point -- if the formula would have shown a 15% increase in amount, that was reason to go back to court to have it raised. This can happen not only if his income goes up, but also if her income goes down. Is she remarrying, planning to get pregnant and quit work? Watch his support payments go up to compensate!)

NOW you can make a decision whether getting legal representation to take care of this is financially worthwhile.

And my very best to you!

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Author: nomorecards Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 54954 of 308452
Subject: Re: Considering Bankruptcy (semi-long) Date: 1/21/2001 6:49 PM
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"He has a hard time making ends meet because his child support payments alone are 60% of his
take home; on top of that he has alimony and the children's medical bills which because of a
couple surgeries is quite large."

Hi married2debtor,

Something doesn't sound right.

When one gets a divorce it's usually Child Support
or Alimony (which by the way is the high cost of leaving. :>))But not both! and it should be no greater than 28% of your after tax take home pay.
If he is actually paying 60% by GAWD go back to court
and file for a modification you don't even need a lawyer for this!!(but I'm not suggesting it)
I personally have handled all my own modifications with a great deal of success and I'm no Perry Mason!
Also on the medical front yes usually the husband will supply medical coverage but split the cost of uninsured medical with the $%#%& ex wife.
Been there, done that, finished paying CS.(child support)!

Nomorecards

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Author: LuluB Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 55166 of 308452
Subject: Re: Considering Bankruptcy (semi-long) Date: 1/23/2001 2:59 PM
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He is paying WAY too much child support if it's 60% of his income. I have one daughter and I get $500 per month child support. I am in No VA right near DC. That should give you an idea.

See a lawyer and get that changed NOW. Also, there is no reason he should have to pay for private schools if he'd rather not.

Lawyer consultation? Usually the 1st hour is free. Write down income, amounts paid, etc. so you will have things to go over, questions to ask, etc. when you see the lawyer. Make the best use of the hour.

Good Luck!

Louise



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