Concerned about my options for BK...

[blucat13]

I've talked to a lawyer, but he's been hard to get a hold of to ask additional questions. I had an initial consultation and didn't quite get all my questions answered.

My situation is probably not unusual, but the circumstances make me wonder what option is the best for me, so I am asking in the general section for some thoughts from those who've gone through this....

I have a house I can't sell and about $12K in cc debt, and $16K on my car. My initial thought was a CH 7, surrendering the house and keeping my car, since I can handle my car payments.

The problem is that I make about $10K over the median for the Ch 7 means test, and I am 'technically' the only person I can claim on the means test. I have my son 1/2 time, and I live with my boyfriend. So, it is unclear whether either would allow me to count 2 or 3 people on my means test.

I am concerned that they would push me into Ch 13 repayment. I could pay my CC and my car myself within 5 years, IF the house was out of the picture, so I don't like the idea of the Ch 13. However, the only way to get rid of the house without BK is to do a foreclosure.

My house is sitting empty, and I am living with my son and my BF at my BF's house. All my payments are current on everything, while I figure out whether to file or not, but I am throwing $1000 a month at an empty house while deciding. At the moment I don't have to pay rent where I am, but that won't last long.

I feel like I am going in circles. If I go into foreclosure, will my card interest rates go up since my credit is hit? What are the legal implications of foreclosure WITHOUT the protection of BK? (I know about the credit hit).


ANY advice is welcome.

t.

[JRScott]

Okay yes the credit card companies basically all have clauses that allow them to jack up your interest rates if they pull your credit report and see stuff they don't like (like a foreclosure). Its really a nasty way that makes the problem of course worse rather than better.

If the house went into foreclosure then they would eventually resell it. They could then come after you for any deficiency balance. For example say your home loan is 150k. Let's say they foreclose, take possession and then resell it for 130k due to the lower market. They could then send you a bill for 20k.

You might could attempt to short sell the property, its not always easy to do. What it involves is having a buyer ready to pay x amount which is generally lower than what is owed, and then having the bank agree that they will take x and count it as paid in full.