New here...

[Debtfreeforme]

I am considering bankruptcy, but wonder if it is a mistake. I have 20,000 in student loans and 22,000 in credit card debt. 6,000 is in my husbands name and the rest in mine. He is looking for a job, so I don't want it to hurt his ability to get a new job. Can I file myself without it effecting him? If so I couldn't consider his 6,000 I assume.

I also got a home equity line of credit, for 10,000 of it, will we lose the house if we or I declare bankruptcy?

We also got furniture on credit with the promise we will pay it off with the next tax refund, do I have to list that or will the furniture be taken, it is 1,500 additional to the debt.

Another thing to consider is that I have paid everything on time, but with some charging of utilities to credit to have the money to pay the credit cards. The cards have not been paid more than a day late. I would be destroying my credit single handedly. I am just so scared because if any medical problems arise or my husband loses his pay for any reason, we would be unable to pay and credit would go bad anyway.

My logic right now is to get rid of the debt and that would enable us to save a little bit each month and then hopefully have a savings to fall back on, but to live without credit. We currently have no savings and only 3,000 in my husbands 401k. I am so tired of worrying about how to pay everything each month.

I have approached debt credit counseling, and done the home equity line, but the monthly payments for the counseling solution are as much as now, and we are barely making those.

Am I on the right track by thinking about bankruptcy or should I look at other solutions because my credit is good. I have no more equity in my house. Any advice is appreciated, and I am aware that it is only opinion, not gospel!

[FloridaGirl]

You think you have good credit, but credit counseling isn't good for your credit, no matter what they tell you. It shows on your credit report that you are under a credit counseling plan and that tells people that you were unable to pay your debts back on your own. Credit counseling programs are not much different from a Chapter 13 BK, really. You are only paying back a percentage of what you owe over a period of years. You can't keep your credit cards in either program, and your credit takes a hit either way. If you can come up with another solution other than BK, then take advantage of it. If you can come up with the money to pay your debts off, without owing yet another creditor, do it. Most people who file BK have no other way out of their debt, and are forced to file.

Yes, they can take your furniture if you file for BK. After you file, the furniture company can't collect from you, but they can file a dispute with the court and ask to have the furniture given back to them. The court might or might not allow them to take their furniture back. You can remedy this by reaffirming the debt, but then you will still be obligated to pay for it. The company will still expect you to pay with you tax return money, as you agreed, but maybe they will work something else out with you. It is either that, or they go to the expense of collecting the furinture back from you. I think they will work with you if you explain your situation changed between now and when you bought the furniture.

As far as your husband, if some of your debts are joint accounts, you will both be affected by a BK. You can file, but they can go after him for any of the debts which are joint. So, even if you do file on those debts, you will technically still owe them since you and your husband share the money, right? If you have debts which are completely in your name, they can't go after your husband. He is still going to owe his 6 grand unless he files for himself. If you decide to file, make sure you list all of your debts. Even the ones you might share with your husband. Yes, the ones you share will still have to be paid, because they will only go after your husband, but if you are going to file, make sure you leave nothing behind.

I really wish you luck in deciding what is the best course of action.

[hhou812hh]

I'm not sure how true this is but I read it somewhere a while ago that even though credit counceling is very similar to a ch13 if you have a credit counceling service negotiate away a portion of your debts, this portion is considered "income" requiring you to pay "income tax" on it. A ch13 will consider you legally bankrupt so you won't pay any taxes on the portion that was discharged.


I read this a while ago. Can anyone confirm? I'm not familiar with cr. counceling services.

Thanks!

[Debtfreeforme]

I do have good credit, I never signed anything with debt credit counseling. I just talked with a counsler and she said that with them it would be so much a month and it was as much as the amount I am currently struggling to pay.

My only alternatives are to keep juggling the credit until I can increase our income, in about three years, or bankruptcy. Unless someone has another idea?