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Help Me! Bankruptcy or Debt Management Program

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Garmin
New Member

Help Me! Bankruptcy or Debt Management Program

Hi Everyone,
 
I need some help and advice. I am 38 years old, married with 2 kids, work in medical sales and own 2 rental properties: house in Vegas & condo in FL. I'm in a big, huge credit card mess due to the Real Estate Crash. 
 
I was trying to make money in real estate like the rest of us for my family. I was hoping to cash in my chips (equity) and buy my own property to live in. Unfortunately, the market collapsed in both LV & FL and I lost all my equity and over $50,000.
 
Now I'm stuck with 2 properties that are worth peanuts & I' ve been trying to sell them as a short sale for 6 -12 months.
 
One of the problems is that I was using cash advance to pay for the negative equity on both properties -hoping I can sell these properties fast enough, retain my decent credit (600 - 650) and hope this Hurricane F5 Storm in real estate would pass by - but I've realized this hurricane will continue for at least another 18 months.
 
I now owe approximately $100,000 in credit cards and I'm completely broke. I pay my credit cards on time but the rates are automatically changing from 7- 29%.  All my money is going into credit cards & living expenses. I've been considering Bankruptcy (Chapter 7) or Debt Settlement (negotiate interest).  My lawyer says I could probably qualify for Chapter 7.
 
I don't know what to do?  I know this is crazy, but I have the confidence I can continue paying my credit cards until their paid off but it will take years & sacrifice. BK & Debt Settlement have their advantages. I also know the value & the "power" of having good credit and I am becoming familiar with the ramifications of having a bankruptcy also.
 
PS- Looking back now, I wish I would have let the 2 properties go into foreclosure and I would have saved my money, avoided high credit card debt and avoided the possibility of bankruptcy.
 
I now have to think of the future, my kids, saving money, future employment in medical sales /pharmaceutical sales, background checks and buying a house.  Please help me! Give me your
thoughts, advice, suggestions & experiences regarding Bankruptcy or Debt Management?
 
Thank you- I really appreciate it everyone. I have alot to consider.
 
 
Message 1 of 6
5 REPLIES 5
Anonymous
Not applicable

Re: Help Me! Bankruptcy or Debt Management Program

I understand where you are coming from.  It took me one year to make a decision on filing bankruptcy 7 or just paying my bills on time every month to maintain my good credit score of 791.
 
Well, in my opinion I would file the bankruptcy.  Once you hire an attorney you can pretty much stop paying your credit cards, mortgages and so on. 
 
For me, once I obtained my attorney, I was given the biggest feeling of relief ever.  Before I was always worried about, are we going to have money to pay for food, or for the house.  I was litterally up all night sick to my stomach worried about all of this.  I understand you want to keep your good credit.  So did I.  You need to remember that your credit can be rebuilt  and a bankruptcy only stays on your credit report 10 years.  In most cases you are able to buy a home after just a few years of filing.  I know this since my dad has filed a few times and just recently bought a house.  So there is hope.
 
People make mistakes and you can recover from them and move past them.  I too went into about $50K in credit card debt due to my house.  Needless to say we just sold it in a short sale because the housing market in MN is so horrible.  We were $100K upside down in that mortgage.
 
You just need to think of what is best for you and your family.  And please don't consider going through one of those debt management companies.  They are full of crap when they say they will reduce your payments and such.  Number one, you need to be past due to even benefit from using a credit counseling co.  Plus when you use them, they don't always apply your payments correctly or on time so than your credit suffers.   Even if they reduce your debt, your creditors are still going to report the difference on your credit.    My friend used one for about $50K debt and her credit looks worse than mine and I did banko.
 
Once you have filed for bankruptcy, you can pretty much include your houses to protect yourself.  As far as the tax laws are concerned you are protected by banko and of course Bush's new law passed in January to protect us from being taxed on negative equity in homes for foreclosure or short sale.
I am not an expert on anything, but I have been going through the process of banko and short sale for almost a year now.  It is a tough decision, but you need to weigh the pros and cons, which I did and banko was best.
Message 2 of 6
Anonymous
Not applicable

Re: Help Me! Bankruptcy or Debt Management Program

I would suggest contact all your creditors and ask them what they can do for you and how they can work with you... more than likely they can help you they might require your account to be suspended so you can t use it or something but definitely try to call them.... THey would rather work with you than with a  Third party!!!!!  What cards do you have? 
 
 
 


Message Edited by Jerms on 09-20-2008 04:22 PM
Message 3 of 6
Anonymous
Not applicable

Re: Help Me! Bankruptcy or Debt Management Program

File the BK!  But don't accept anything but a "business" bk due to the real estate business you had that failed.   Forget about any DMP, they are useless.
Message 4 of 6
BlueBayou
New Contributor

Re: Help Me! Bankruptcy or Debt Management Program

Bosco, can you elaborate a little on the "Business Bankruptcy"?  
 
How will it affect the OP's personal credit?
 
If he used "personal credit cards" for the cash advances, which is what I'm assuming he did, then, shouldn't he include those in his BK as well?
Message 5 of 6
Anonymous
Not applicable

Re: Help Me! Bankruptcy or Debt Management Program

Boscoe,
 
I too would appreciate your clarification of the "business bk".  I am in an almost identical situation as Garmin, except that I have definitely decided to file.  Real Estate development was my business, and it took me down, but I accrued alot of personal debt feeding the business, foolishly, but now what???
Message 6 of 6
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