A little advise needed...

[midlifecrisis]

Ok, so I have an appointment to file a chapter 7 next week. I am married with 3 children at home. I am the sole "bread-winner" making 45K + commisions per year. I will file alone, house is in spouse name. I have about 39K in unsecured credit cards. I also have a van that I owe $7600 on that I will want to return. My question to any who chooses to answer is this: If I have the oportunity to roll 20K in unsecured debt into my wife's mortgage, should I do it to avoid BK? BoA will do that since both the 20k cc & the mortgage is thru them. My name would then also be on the mortgage. I would still have about 19k in cc debt and the van(that I don't want). I could possibly make ends meet with that scenerio and avoid BK but it would be a little tight. My reservation is that with the collapse of the housing market, do I really want to add 20K more to my home loan? I want to do all I possibly can to avoid BK but I'm not thrilled about rolling the 20K into the house. On paper the BK looks like my best deal for me & my family...but should I take this opportunity to avoid BK? Any advice would be appreciated...

[keepmine]

All you would do is take unsecured debt and make it secured debt and put the home at risk. I'd file and be done with it. You just don't have the income to support that det load regardless if it's credit cards or a mortgage.

[AngelinaCat]

Hi midlifecrisis. Welcome to the forum.

From what I have read, it seems to me that you would be better off to BK now and return the vehicle. If you roll this 20K into the house mortgage and the housing market does not turn around in the next couple of years or so, you and your family may wind up being upside down in your house. And you may wind up losing the house.

I think it wise to talk frankly with your wife, and go ahead and file. Then learn to live on a cash only basis.

Another thing to consider is this: if you roll your 20K CC debt into the home mortgage, BOA can and WILL cross-collateralize the debts if your name gets put on the mortgage. As it is now, the mortgage in your wife's name only MAY be safe. I don't know what state you are in, so don't know if you are Community Property, or Joint Tenancy.

I suggest buying the Nolopress.com book on Ch7 BK. It is written in plain English, and you can download a PDF version. The online version costs about $18.00, while the print version is around $22.00. Buying online will give you the opportunity for a 'freebie'. Take that too, as it is a guide to simple everyday legal affairs.

Good luck!

[AngelinaCat]

keepmine has said what I was trying to say in a much more succinct and to the point manner.

Thanks keepmine!

[StartingOver08]

I agree with Keepmine. The problem we are experiencing in the housing market is a lot of people have rolled unsecured debt into their homes (the ATM effect). Don't do it.

BOA would love to have your house secure that 20k - there is no benefit to you at all. You have an opportunity to get rid of your debt and start fresh. Do the BK.