Should I file BK or go to a debt counselor?

[2kidsrenough4us]

My husband and I are in about 19k in debt and intrest is adding up fast. 11k from a repo in 2004 and the rest are some store charges a Dell pc and utility bills. We own a home that we would like to keep. We habe 2 small kids and cannot afford o pay this debt off. We tried re-financing our home but didn't sign because the payment was too high. Should we file chapter 7, 11 or do a credit couselor?
thanks

[HHM]

A credit counselor can't really help you with what appears to be most of the debt. Credit counseling only works with credit card debt, so the repo balance, past due utilities, and Dell could not be helped by a credit counselor.

Given the nature of the debts, you are probably better served by attempting a Chapter 7 BK. Why continue to pay $11K for a car you no longer have.

[2kidsrenough4us]

yeah i'm pretty sure were going to file chapter 7 but what about my house? Were current on the mortgage and i have a car payment that im also current on. Any advice would be greatly appreciated.
thanks

[HHM]

So long as your current, and any equity in your house is less than your state's equity exemption, then you should be fine. Don't let the house payment go in arrears if you plan on keeping the house. Same goes for the car.

[BKTango]

On your house and car note. First you will need to know if you are doing your bk with state or federal exemptions as both will differ. As long as your equity in your home is lower than the exemption and you are current on your payments then your home is safe in a CH7. You will more than likely have to reaffirm the mortage (we did) and basically take responsibility for the debt, so later you can't just walk away from the mortgage you will always still owe that. I did not have car payments so I am not sure how that works but I believe it to be nearly the same as the mortgage. Make sure you consult a couple of attornies as they will help you understand this a little bit better. Also depending on your household income that will factor into whether you can even file a CH7 or if you will have to do a CH13.

[emoney]

Without more information on your total situation any information you recieve is just a guess from anyone.
If you want real help you need to furnish a budget. How much surplus cash do you have at the end of each month.

If you tell me now that you do not have a written budget a BK will only pospone your lost situation as to handling money for the rest of your life.
Before BK consider no cable tv, or cell phone and no eating out. How about a second job and a garage sale. The amount on money you are condsidering is so small you should scrape together a few thousand $$$ and I will bet you can settle the judgement for cents on the dollar.
BK is not the solution to most problems. It will follow you for the rest of your life. Your insurance will cost more and job opportunties will lessen.
Consider what you are doing as it is the rest of your life.
Best wishes,
emoney

[BKTango]

While emoney is correct on some instances, what may seem like very little debt for bk to anyone can be the whole world to some. In a way I have very little debt as well especially when I see most on here having $50,000+ of debt, but being LOW income making way less than the median and supporting a family on that, it is indeed far greater to me than it would be to most. For some it is not always the easiest thing to "scrape together a few thousands of dollars and settle." If you can settle at all nowadays, been there, tried that...for a year.

As far as cable tv goes, cell phone and such, I have all of those and was never questioned, the cable was just included in my monthly "entertainment" costs.

2kids the one thing you can do for yourself is go see a recognized credit counselor, you will have to do this anyway before you file bk as it is the law, but it must be done by one recognized by the courts. They will crunch numbers for you and see where you stand as far as a budget could go and if in fact bk would be your only option.

As far as job opportunities lost due to bk, that usually could only happen if you apply to work in the field of money at a company. Some on this board have posted to that effect several times. Bankruptcy will follow you but not for the rest of your life, it will drop off your report in ten years, and usually you are on the road to recovery and mistakes learned and better judgement far before that time is up. I have yet to see personally an insurance hike due to filing bk.

Filing bk is a major thing to do, and one you should choose carefully. However sometimes it is the only way, or the best way for you personally. You will not be walking around with a giant B branded on you, nor will any stones get thrown at you. You have to decide what's right for you and your family, just read, read, and read some more and make yourself familiar with everything. Best of luck to you.

[2kidsrenough4us]

thank you for your reply. I will take that under consideration

[sisterfunkhaus]

I would have to say that talking to an attny. or 3 would be my best advice. They can look at your situation and tell you what you would be best off doing. I know mine turns people away to credit counciling if she thinks that will really help them.

I would not necessarily go so far as to get a second job. Cutting some stuff out is fine, and if you REALLY are avidly against BK, by all means, do it. But It could put a lot more stress on your family and whoever has to pick up the slack. It may not even get you out of the hole. And, it could hamper your options in filing should you decide to file later.

[mike2006]

hi emoney.

you mean we can settle for "cents on the dollar?" i heard and also saw from here that this offer is no more available..now mostly they asking for 40%-60%.

thanks

mike

p/s: i alos owe around us20k debt.

Without more information on your total situation any information you recieve is just a guess from anyone.
If you want real help you need to furnish a budget. How much surplus cash do you have at the end of each month.

If you tell me now that you do not have a written budget a BK will only pospone your lost situation as to handling money for the rest of your life.
Before BK consider no cable tv, or cell phone and no eating out. How about a second job and a garage sale. The amount on money you are condsidering is so small you should scrape together a few thousand $$$ and I will bet you can settle the judgement for cents on the dollar.
BK is not the solution to most problems. It will follow you for the rest of your life. Your insurance will cost more and job opportunties will lessen.
Consider what you are doing as it is the rest of your life.
Best wishes,
emoney

[emoney]

Your lenders will look at your situation and attempt to determine how collectiable they believe your debt is. Some factors used are: what is your total debt, how old is it, is any of it securied, what is your income, and what state do you live in. Some states such as Texas income cannot be garnished, but it can be seized if it is in an bank.

If they beileve there is little hope on you paying or collecting them the value they see in your debt is lowered. So new debt they may offer a discount of 20% but old debt and other creditors they my accept a payoff of 25% or less. Before you do anything get the offer in writing and consider the tax considerations.
Good luck!
emoney

[2kidsrenough4us]

This isn't a easy decesion. I guess my first thing would be to see a lawyer. This debt is not collectable in my eyes. Keeping my bills curent at the moment is my main priority and we have been able to maintain that.
thanks emoney for your knowledge.