Help!! I have 2 important questions about bankruptcy!?

[jarel]

Hi there,
We are considering bankruptcy as our last resort - we can't even buy enough food with the state of our bills. We are well below the median income of California (we made a bit under 32K for a family of three this year). But I have two questions.
1. We have great credit, ironically. We have been paying the bills rather than buying other stuff, and haven't missed a payment. Should we miss a few payments before filing? I thought I heard that filing w/o missing payments "looked bad". As a side note, we also racked up a lot of debt in a huge hurry this summer, as the economy tanked and we ran out of things to sell to supplement the income and started buying food and gas on credit. So one card has been recently filled - the other two have been running at near max since late 2005.
2. We are in the process of having some family land (in another state) gifted to us by my Mother-In-Law. The land is unimproved, and the 2009 tax bill listed it as being worth 15K. Can we use the California System 2 house wildcard to protect this property? We will literally be outcast permanently from the family if we lose the land. Should I just put that process on hold for a year?
We own nothing else of any value. The car is a Geo Metro, 1996, and everything in my rented trailer heaped together might cost 2,000 to replace. Maybe.

Any advice much appreciated - although I *do* know about the pros and cons, thank you!

[cumhea]

You should always consult with an attorney, because every state has differant laws on what is exempt in bankruptcy cases. But from my experience:

Put off on getting the property transferred to your name. Exemption laws protect your homestead, not other property.

Stop paying your bills. Once you file, the bankruptcy is going to kill your credit for a few years. Having no other outstanding debts isn't going to help you one bit. All of your creditors will be listed on your credit report as "included in bankruptcy" whether they are up-to-date on payments or not.

So stop the payments, then use the money toward paying your legal fees.

[denzell]

Contact a bankruptcy lawyer. They all do fre consultations.