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Bankruptcy or Debt Settlement Program??? Please Help

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Anonymous
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Re: Bankruptcy or Debt Settlement Program??? Please Help

So you mean i can possibly lose my house even though I am current on the mortgage?
Message 11 of 60
Anonymous
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Re: Bankruptcy or Debt Settlement Program??? Please Help

chapter 13 is re-organization, granny probably knows more about that.

chapter 7 is a clean slate bankruptcy, which means, if you're combine assets total more than $3000 allowed per rule to be protected from liquidation, then the arbitor will sell them to pay off your creditors, unless of course you plan to re-affirm the debt, in this case, your house mortgage...which i am not too sure you can do with a chapter 7 in terms of a house....i know you can re-affirm a car loan with a chapter 7.

granny, if you read his case, your feedback would be appreciated.

in the meantime, im gonna grab some late lunch, be back later.

Message Edited by whoisjohngalt7 on 02-17-2008 01:51 PM
Message 12 of 60
granny031350
Established Contributor

Re: Bankruptcy or Debt Settlement Program??? Please Help

The house issue has to be dealt with exemptions and equity.  Depending on your state, you are allowed certain exemptions.  For a house, if your equity is less then no you won't lose your home at all, either chapter 7 or 13.  It is great that you are current because with little to no equity, you would keep your house.  If you owe on your vehicles, that is the same.  There is an allowance for equity in a vehicle.  If you are less than that, then you are ok.  Ususally if you are making a payment (have a lein) your equity is pretty low and would be under the limit.  With your family situation and all the people living in your home, I think you could qualify for a chapter 7 but you really need to talk to an attorney in your area to give you the low down on exactly what chapter you qualify for.  No you don't pay off 100 percent of your creditors unless your disposable income says you can.  Your payment to the trustee is usually far less than you are paying now. 
Message 13 of 60
Anonymous
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Re: Bankruptcy or Debt Settlement Program??? Please Help

If it helps the response or not i currently have 0 equity in the house. I just refinanced this month so i can add taxes and insurance to the mortgate note. When i originally purchased the home i got screwed over from countrywide who claims they told me it didnt include taxes and insurance and i got a $6400 summer tax bill the month after i purchased the condo!!! i was livid. That also contributed to the 70k in debt i am Smiley Sad
Message 14 of 60
Anonymous
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Re: Bankruptcy or Debt Settlement Program??? Please Help

Also, if it helps, here are a list of the creditors i owe and approx balances
 
Bank of America : $34,000
Amex : $12,000
Discover : $12,000
First USA : $10,000
Household : $1900
Cap one   : $500
 
Totaling roughly 70k
 
I currently have a 646 EQ
Message 15 of 60
granny031350
Established Contributor

Re: Bankruptcy or Debt Settlement Program??? Please Help

I answered your other post.  Your house is safe with no equity.    You are discharging ONLY credit card debt.  Now a DMP program is 3 to 5 years of monthly payments.  You miss and you will be in a big mess.  A chapter 13 is 3 to 5 years of monhly payments.  Since you are LOSING your parents contributions in a year, I would try to go Chapter7 and have it all be over in 6 months and move on.  Your eq score will probably dip to 500's BUT reaffirm your house and the on time payments will be recorded.  Make sure the lender will do that (help score) Keep your car payment current (hopefully not with a credit union.  LOL  they are nasty people in BK) reaffirm that and that will help recover your score quickly.  Then you will be reduced to the rebuilder cards out of BK.  No more B of A etc (probably never again)  but you can get a few cards and rebuild.  Within 2 years after BK with on time payments and no new lates, your scores will be back up again.  And in 2 years, you can get another home.  So with marriage 3/4 years down the road, you should be fine.  Just don't hide the BK from your future spouse.  She needs to understand your finances, as well as you, hers.  GL to you.
Message 16 of 60
Anonymous
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Re: Bankruptcy or Debt Settlement Program??? Please Help

I'm already expecting my score to take a huge dump and to be quite honest, at this point my score is the last thing i am thinking about. Reason being is because i already have the house i intend on living in for however long i can.
 
I guess my hopes are to get ch. 7. im concerned about how much the ch. 13 or dmp payment would come out to be if those would be my options. I dont mind living without credit cards for awhile because they are what got me in this mess to begin with. I would like to know that i have to live with discipline and i know that once i get used to that lifestyle that i will be able to cater to a new lifestlye forever.
Message 17 of 60
Anonymous
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Re: Bankruptcy or Debt Settlement Program??? Please Help

i know it sounds scary, the word BK. but sometimes, it is just a word. if everything you told us is right on, then then a lawyer basically is your next step. bring everything you have to him or her and expect an hour at least to talk to him regarding disclosures. nothing is gonna happen if you don't see one.

sometimes, all it takes is a fresh start to get us back to our senses. the required financial classes are really helpful should you decide to file. pay special attention to the financial management class after filing SHOULD "YOU" DECIDE to file.

at this point in your life, scores doesn't really matter now, just getting your life back on track.

with the help of this board, i think my scores are better now than before i file for chapter 7 last year. 648/650/674. but my case might be significantly different than yours, plus i will have many items fall off my report next year. so i keep hoping. but when i was going through BK, the last thing on my mind were scores because the agony of a huge debt weighing me down, all my money going into my debt caused by my stupidity when i was younger, being financially responsible that no one taught me how to be, lol. i wish i knew about all this when i was in my early twenties, lol.

Message Edited by whoisjohngalt7 on 02-17-2008 03:24 PM
Message 18 of 60
Anonymous
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Re: Bankruptcy or Debt Settlement Program??? Please Help



LTrain823 wrote:
So you mean i can possibly lose my house even though I am current on the mortgage?


You can reaffirm debts in a BK7, so you keep making the payments, don't be late, you keep living in the house while the bank holds the note. Same with cars and other stuff you wanna keep.
 
Without knowing your equity, income, assets, etc. it's tough to make a call, but, my inclination is to trust my gut on things like this. I'm not one to recommend BK lightly, but when talking with something about their situation this sinking feeling comes over me. I'm feeling that. It tells me BK is right for you.
 
Remain current on everything, if at all possible. Do NOT listen to the DMP telling you to default. If you already have a home you're happy in and could stay in for a while, I'd give serious consideration to a BK. I suspect you qualify for a BK13, and probably even for a BK7--unless you inherited a $100K that you dropped into your house as equity, but if so, that might give you some leverage to squeeze down the debt.
 
If everything is current when you file for BK, then those things you BK won't report as late, in collections, CO, etc. They'll report as IIB.
Message 19 of 60
Anonymous
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Re: Bankruptcy or Debt Settlement Program??? Please Help

Noah, thanks so much for the response. I have posted the link to the other thread i posted in this forums that gives a pretty good detailed summary of my situation.
 
 
Message 20 of 60
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