We are considering taking out a second mortgage which will get us by for a little while, but I think filing bankruptsy might be the way to go. We owe abut 750 on one car and 12,500 on another, 89,000 on our condo (worth about 110 to 115k today), and almost 20,000 in credit cards. My wife is too ill to work and we have been getting by on credit cards that are now all maxed out.
Our future plan is to sell the house and move to another area, but our credit is getting hurt and a bankruptsy will do much more to it. I don't know the laws on bankruptsy other than that they passed a new law where you can't file on credit cards. What would be a good idea? What happens when you file? How long does it take? How much does it cost?
2007-08-24 12:06:55 · 6 answers · asked by xyz123 2 in Business & Finance ➔ Personal Finance
FYI: I was making about 42,000 a year, but I am being laid off in Sept. The best job I can find so far is paying 30K without health insurance.
2007-08-24 12:17:53 · update #1
I am not a lawyer. In your situation you may need to consult one before you file. You are going to have some complications if you fine bankruptcy at this time.
When you file, they base whether you qualify for a Chapter 7 or 13 on the amount of money you are making. Those calculations are based on your previous 6 months income. If you are going to be laid off, that is going to totally mess you up, because they are NOT using your new income. You may need to wait a few months to file.
You BK does NOT eliminate the mortgage or secured loans (your cars). So the only benefit I see is you will lower your debt on the credit cards. I don't think that's going to be enough to get you out of your situation.
In most cases, bankruptcy is just the thing to get you back on track. In others, the new laws make it very difficult. You need to discuss this with your attorney and find out what your options are.
2007-08-24 14:40:02 · answer #1 · answered by Anonymous · 2⤊ 1⤋
Filing bankruptcy is rarely the best choice to make and it doesn't seem necessary in your case either. The new laws don't allow you to, very easily, avoid paying the debts anyway. You should sell the condo maybe, the profit would pay off the credit cards which is by far the main reason you have financial problems. Stop adding debt to these cards, call all of them and ask if you are getting the lowest interest rate possible. Move somewhere cheaper, no reason to wait if you are getting laid off anyway. 42K is not enough for the debt you have so you need to live in small town America probably or close and get back on your feet. This probably doesn't help much but figured I would give it a try if anything clicks. Again, make sure you are getting the lowest interest rate possible on this CC debt, ask to talk to a supervisor if the first answer is that they can't change. This will save you huge money over time.
2007-08-24 13:06:21 · answer #2 · answered by The Scorpion 6 · 0⤊ 0⤋
You CAN file on credit cards. You can't file on taxes, student loans, or child support/alimony...things like that. What the new law did was make it harder to file for Chapter 7. Chapter 13 is a repayment plan more or less. Chapter 7 lets you eliminate debt completely, however, you will likely lose your home and maybe even one of the cars you have. I filed for Chapter 7 about a year ago and it was I think $299 to file but I had an attorney (which I recommend) so the whole thing was $1400. From the time I filed until the time it was discharged was 4 months. You should speak to an attorney to see if it's right for you. Most attorneys give free consultations. It won't hurt to go talk to someone and see. I would advise to avoid bankruptcy if at all possible. It should be a last resort option.
2007-08-24 12:18:43 · answer #3 · answered by First Lady 7 · 0⤊ 0⤋
You sound like you would be a candidate for bankruptcy. I am not sure where you live at, but bankruptcy is designed to get you out of debt--including credit card debt!
I recently for bankruptcy in May, and I got to keep my house and my car and wiped over $60,000 in credit card debt out.
My advice is to talk to a bankruptcy attorney because each individual's case and options are unique. All of the attorneys that I spoke with (4 of them) gave me a free interview, so it won't cost you anything to explore your options.
2007-08-24 12:41:08 · answer #4 · answered by Jereme A 2 · 0⤊ 0⤋
i know nothing about bankrupts but i do know from reading answers and questions that the first step is to seek legal help -- all though if you could get out of the condo it would go along way toward settling your debt with out filing!!!
2007-08-28 04:00:52 · answer #5 · answered by mister ed 7 · 0⤊ 0⤋
I don't know the answers to all of your questions, but I think you need to go and talk to a financial adviser. It sounds like you have a very complicated situation and you need professional advice.
2007-08-24 12:15:08 · answer #6 · answered by jml167 4 · 0⤊ 0⤋