NEW MORTGAGE LOAN MOD NOW I NEED TO FILE BK HELP!!

[cazz]

 I just had my mortgage loan modified which is wonderul and im so grateful that i get to keep my home and now I am considering filing chapter 7 bk due to all of my cc debt. i just wanted to know if it was a smart thing to do. i have about 10,000 in debt and i think it would be smarter to file and start with a clean slate. I plan on staying in my home the next 3-4 years so im in no rush to get a home or anything like that. I really want to file bk and then rebuild my crdtback to where it was before i bought my home. any advice would help. also how long after discharge will i be able to get a cc to rebuild my crdt

[mynameainttracy]

I would not file bk over $10,000 in credit card debt. I'm assuming you would go chapter 7 and although you can rebuild, that is a nasty mark on your credit report for 10 years.

Buckle down. $10k is still managable.

[Gunnar419]

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@mynameainttracy wrote:

I would not file bk over $10,000 in credit card debt. I'm assuming you would go chapter 7 and although you can rebuild, that is a nasty mark on your credit report for 10 years.

Buckle down. $10k is still managable.

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+1

OP, other than the amount of the debt (which definitely seems manageable), what else is there about your credit/financial situation that leads you to think you need bankruptcy?

[cazz]

I just dont have the money to pay the debt. i dont want it sitting on my credit report for years because i wont have the extra money to pay off the debt. i know that bk will have a hard hit on my crdt report but i see how other people are able to get cc and cars etc. after filing chapter 7. also i already have my home and my car so im not looking to get a house or anything soon. so that gives me time to fix my crdt after i file.

[DaveInAZ]

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@cazz wrote:

I just dont have the money to pay the debt. i dont want it sitting on my credit report for years because i wont have the extra money to pay off the debt. i know that bk will have a hard hit on my crdt report but i see how other people are able to get cc and cars etc. after filing chapter 7. also i already have my home and my car so im not looking to get a house or anything soon. so that gives me time to fix my crdt after i file.

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Well, something else to consider is that a BK will cost you around $2k in attorney & court fees, so you'll be paying 20% of your $10k debt to get rid of it.And also consider that a BK7 will remain on your credit report for 10 years, a derogatory account for collections/charge off remains for only 7 years.

You say you  "won't have the extra money to pay off the debt" - is that because of income limitations, or because the creditors have jacked up the inerest rate for late payments and the balance with late fees? For either you might want to consult with a Credit Counseling Agency to see if you can negotiate lower payments & interest rates. There's a bunch of bogus credit counseling outfits that do little but collect fees from you, see this thread for how to choose a legitimate one: How to Select a Legitmate Credit Counseling Agency

[TRC_WA]

There's also no guarantee that you can file Ch 7.

You could be forced into a Ch 13 and have to make payments for 4-5 years. 

[bstone]

I 100% agree with what has aready been said.  $10K in debt is not what I'd file BK over unless you absolutly were unable to pay.  As has been said, you're looking at $1500-2000 just to file, that's 15-20% of your debt right there.  Buckle down, get a second job if you have to, cut the crap out of your monthly expenses (cable, going out, etc.) and work to pay it off.  You are going to be much better off in the long run for it.  Aside from the credit hit right now, you're looking at ten years of potential credit issues (you have no idea what the credit market will do tomorrow so you can not base people's approvals in the past off what you might be able to do tomorrow).

What if the BK trustee determines there is equity in your home and forces you to sell it?  Or forces you into a CH 13?  OK, so you decide to dismiss the case and not go forward.  Guess what, you still have the debt, still have the black mark on your credit, have none of the benefits of the BK discharge and still had to pay all the fees.

You can recover from from $10K.  Call your credit card companies, work with them to lower your rates.  Some will require you to close your cards but will lower the rate (which is fine because they'd be closed in a BK anyway).  Some will do nothing (Sears is a great example of this).

We filed BK on nearly $600K of debt, I would have loved to have been in your shoes.

[cazz]

Well i have just 10,000 in cc debt but i still have other debts that total to about 20,000. I have already met with a bankruptcy attorney and i will have to pay 1200 and they will even allow me to make payments on that 1200. I completely get what you all are saying but because of my imcome i am not able to pay off the debt so it will just sit on my crdt report. I havent paid the credit cards in about 7 months so they wont lower any rates or negotiate because theyre already in collections. i dont have any problem with the impact that it will have on my CR because i think it may be better then letting thousands of dollars sit on my credit and i wouldnt be able to pay it off. I have already cut everyting extra out of my budget because i had to in order to get my mortgage loan mod. I even got my electric and gas bills on a 10 per month  pipp payment plan so i cant possibly cut anything else out. the lawyer also said that 20000 wasnt alot in debt to file. but i have no other option. i feel like if i file then i have the option of rebuilding my credit but if i dont file i wont have any way of rebuilding it.

[cazz]

any other suggestions?