My Husband and I are thinking about filing for chapter 7 or 13. We currently have a house and we have not been late yet but this month we are stuggling to get the payment. What happened was in August we refinanced because our mortgage was going to go up. Well we did not have good credit scores and the mortgage broker said we will put you in the mortgage and we will set you up with the kelly group who will clean up you credit scores and bring your scores to 680 and we will refinance you in December. Well guess what we can not refinance because my husbands mid score is 643. We have a jumbo loan. We were put in a no doc stated income mortgage. My husband has 1800 in credit card debt with 12000 in student loans. I have about $14,000 in credit card debt. This is all new to me and I do not know where to go. My husband just called a lawyer to talk to him. What should we ask him? We have 5 kids and they are stressed out because my husband and I are so stressed.
To file a chapter 7 would discharge your credit card debt but wouldn't really help you with the mortgage. In a chapter 7 you need to be current on your payments. My question back to you is if you weren't paying your cc debt each month could you afford the house? If so, and you need a chance to "reorganize" your finances, then a chapter 13 is the way to go. The difference between a chapter 7 is that it is about 4 months and you are done, but still have your secured debt. In a chapter 13 you make monthly payments to the trustee but you get to keep all of your assets. And your creditors will file claims to get paid in your plan. If they don't file a claim, then at the end of your plan, their debt is discharged. With the new laws, a chapter 13 can last from 36 to 60 months and with 5 kids, it puts you on a tight budget that could be really tough with unexpected expenses. If you can do a chapter 7 then that is the way to go. However, really look at your money. If you only had the house and its expenses and the student loans, could you do it? The student loans are not discharged in either chapter 7 or chapter 13.
Message Edited by granny031350 on
12-22-2007 12:13 PM
