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Bankruptcy but don't want to loose home/car

Hi,
So here is my situation: Use to have PERFECT credit years ago. Was laid off, had a child etc. and little by little over the past 10 yrs accumulated close to 45K in CC debt. There were only a few times I paid them after 30 days and missed one mortggte pmt 2 yrs ago but just over 30 days so of course my credit score has dropped to Not Good.

I have a stable job now, pay everything on time, but just feel I am never going to be able to catch up on paying these darn CC's and pay for my son's tuition, mortgage and car pmt at the same time. Wondering if Bankruptcy might be right for me?

The house is in my name only as is my car and credit cards. I wonder if I can maybe just do CC Bankruptcy but my concern is not giving up the house or vehicle as well as being able to (if I get divorced) rent a place for my son and I without being denied due to a bankruptcy mark which has kept me from doing anything.

Thoughts?

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Submitted Tue, 08/04/2015 - 14:58

For a person in your situation, there are really only two choices chapter 7 bankruptcy or chapter 13 bankruptcy. Chapter 11 bankruptcy is a consideration, but does not seem to fit your particular situation. If you are behind on your mortgage payments or your car payments and wish to keep both of them, chapter 13 bankruptcy is your only choice, as chapter 7 bankruptcy will not let to catch up on past due payments. But for chapter 13 you need to be able to make your normal monthly payments and over a three to five-year. Pay back what is due over the arrearages. But once within a chapter 13 bankruptcy repayment plan, if you continue to fail to make payments you will have the plan in your case dismissed. If you get your house and car up to date, which is easy to do by simply stopped paying all of your credit cards all at once, then you can take advantage of chapter 7 bankruptcy. I would suggest you pay off the arrearages on your home and car, stop paying all your credit card bills and use the remaining money to contact an experience bankruptcy attorney to file chapter 7 bankruptcy on your case.



Submitted Tue, 08/04/2015 - 15:41

Life happens. Medical bills, unemployment or underemployment, having to pay for a new transmission, kids camps, school, that crazy high utility bill, life insurance, gas, rent......as they say, c'est la vie. Sometimes, the hole gets too deep and it's impossible to crawl out of it.

When that happens, sometimes bankruptcy is the most efficient way to reset the clock on your life. Bankruptcy is about obtaining a fresh start - eliminating bad debt and getting back on your feet without it. As an individual citizen of the United States, if you qualify, you can choose to voluntarily file a Chapter 7, 11, or 13 bankruptcy petition. When we say "chapter" we mean the specific chapter of the federal bankruptcy code that identifies certain requirements that debtors have to subscribe to in order to be eligible to file for this relief.

Long and short answer to your last question is no - you can't "just do cc bankruptcy." To pick and choose which creditors you provide notice to in bankruptcy is to wrongly prejudice those creditors over others, which is not allowed. Instead, you file your petition and include all of your creditors, assets, and liabilities, and the court-appointed Trustee presiding over your case decides whether you have anything of sufficient value over and above what you are entitled to keep in order to get that "fresh start," and ultimately, obtain an order of Discharge in your case from the judge. In some cases, your income or the amount of stuff you own means that you may have to file using a different Chapter, or that the Trustee may bring an action against you to liquidate some of your assets that aren't protected to pay your creditors. Now don't panic! The authors of the code realized that you need your car and your house to get back on your feet - most of the time, the equity in your property, your vehicle that you use to get to work, your bank accounts, your retirement accounts - those things are protected by what we like to call state or federal "exemptions."

In any event, typically when you have high credit card debt numbers, your credit isn't so great that you care about preserving it. By filing bankruptcy, you obtain fast relief by climbing out of the hole and hopefully, pick up better habits along the way so you don't wind up in a bad financial position, ever again.

You should consult with a licensed bankruptcy attorney to determine your best options, and don't procrastinate - if you do, the hole gets deeper. Good luck!


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