Bankruptcy..yay or nay?

[Anonymous]

My husband and I have been struggling for the past year to get caught back up on the mortgage, credit cards, medical bills and other bills.He was unemployed for a year and I managed to make the mortgage payment and of course it was late every month for a solid year and we just cant seem to get caught back up. We cannot borrow money to get the payments up to date and the mortgage company lead us on for 6 months thinking we were going to get a loan modification and then came up and said we didnt qualify. Now our 3/1 arm will reset in June and the payment is going up and we are struggling as it is. The mortgage company is playing the dirty pool game. They know I was late for 12 straight months and they know I cant get refinanced with lates. My husbands hours have been cut back once again and I dont know whether to poop or go blind! Anyway, thinking of bankruptcy. Any suggestions on how to get out of this hole would be great. We hardly have enough money to get groceries. I am about to scream! Somebody help me! PLEASE!

[Anonymous]

I have another question....

When you file Chapter 7 your debts are wiped out...so when you file Chapter 13 are you repaying only the amount you are behind on are do you have a set amount you pay every month until those debts are paid in full, in 3 to 5 years?

[Anonymous]

A Ch7 wipes out all debts that have no assets (mortgage and auto are assets, credit cards obviously are not), all other debts where you want to keep the property have payments negotiated in order to keep them.  The only exceptions are student loans or any other federal debt such as taxes - those are not wiped out and you will have to repay them eventually one way or another.

A Ch13 is a repayment plan, again any debts that have assets such as homes and autos you want to keep are negotiated with the BK trustee for payments, then your other outstanding debts are tallied and using your income they will arrive at a monthly repayment figure.  If you owe say $20k in cc debt, they'll receive only a portion in the repayment process, not the entire amount you owe.

Message Edited by jdm72 on 06-14-2009 05:13 PM