Should I file??

[mwesthoven]

Just can't decide if i should file or not and today really made me start thinking. We barely get by paying the bills but we always seem to make it happen. Xmas came and i skipped the house payment thinking at tax time i would repay it. Well of course things happened he got laid off and so forth and we couldn't pay that extra payment but we kept up on the other payments. I called the bank (unfortunatly it is Citimortgage whom I hate) adn they set me up on a payment plan to reapay that payment. Well i have done so and owe $115 more before they will apply that extra money i have been repaying. So i pulled my credit report and of course it says i am late becuase they won't apply that money yet. My score dropped to 495 which is awful. It used to be in the 650-700 range until then. I am about to have a heart attack over this. I work so hard to have a decent score and just 1 payment missed did this. I own my home, worth about 120 thous i owe about 83 thous so i have equity in it. Have 1 car pymt would like to get rid of worth about 7 grand. Have about 25 thou in debt not including car. 15 thou of that 25 is in a second mortgage on my house. The rest is credit cards which i don't use just pay on and get nowhere. It seems like every month i pay, yet still owe more than the previous month. I just can't take this anymore. I try to read this forum frequently to better learn about this but if anyone has been in my situation and you want to advise, I would be more than happy to listen...

[FilingOnMyOwn]

Only you can decide if you should file. Besides the house, what is your total debt?

[mwesthoven]

total debt besides the house
7000- car which i plan on selling soon
8500- 3 diff. credit cards
16000- 2nd mortgage

Is it possible to file and still keep my house?

thanks!!

[FilingOnMyOwn]

I wouldn't file if I were you, unless you think you would lose the house to foreclosure. You still have a positive net worth of 5.5k, which is enough to cover commissions should you sell. So if you sold, when its all said and done, you would have zer0 debt & a paid off car. Thats really not desperate enough to have to file yet in my opinion.

[JeepMom]

I agree I wouldn't file either but if you sell your home Iwould look into getting pre-approved for another mortgage before listing. You said you have equity in the home so why not take out a home equity loan?

[Minnymouth]

She stated that she had a 2nd mortgage....... so does she any equity??? Doubt it.......

She might try a reconsildation with everything wrapped into one bill unless she wants to dump the auto..... that she can let them repo if necessary....

A lower reconsolidated payment minus the auto payment or cheaper one might keep her okay......

A parttime job might also be the answer till she's caught up and situtated.....
especially if she doesn't want to file BK and wants to keep her home.....

Being upside down on the home and auto both could be a problem..... with the added cc payments....

[mwesthoven]

I value all of your opinions as you have been through this already. I am just concerned becuase my credit score is low. I figure at this point, becuase it is already pathetic, and i am having a hard time, why not just throw in the towel. Of course i have what i want beucase i own my house, so i am not looking to get financed for anythign else anytime soon. With my house and second mortgage, i owe about 990000 so i still have equity in my house. Will banks or mortgage companies refinance me because of my score being so low? i guess that is what i am thinking, that is not an option due to the credit thing.

[Minnymouth]

With the credit score so low it may not be an option to refinance, unless the mortgage company or bank you deal with will work with you to help you keep the home...... they might..... its a lot better than foreclosure....

[FilingOnMyOwn]

Why 'throw' in the towel when you have a positive net worth? Filing bankruptcy is not something to be taken lightly. Given your credit score now, you probably won't qualify for a home equity line of credit with a good interest rate. But if you file bk, you will go through years of having to seek out 'bk friendly' lenders (most aren't) and getting denied credit left and right. If you sold your house now, paid everything off, and your credit report was showing everything as paid in full and zer0 debt, you would have stellar credit scores in a very short period of time. But then you'd probably have to rent for a few months. Lots of things to consider here. But I don't think bk is right for you just yet. Imagine filing over something like this, and 6 months down the road you get hit with 20-30k in medical bills from an accident or something. And can't file again for another 6 years. Then you're really screwed.

[mwesthoven]

i see your point. my mortgage was bought by citimortgage which i do not wish to deal with, seems like since i have ever started dealing with them, i find myself more in debt than the month before. to get my credit score back in shape, is that a lengthy process (years)? i am just tired of trying to figure out which bill i should miss this month and pay next month. i might look into refinancing to consolidate some of this mess. thanks!!!

[FilingOnMyOwn]

If everything was paid in full from the sale of the house, and the credit reports reflected everything accurately, you should have outstanding credit within a year.

[BassBoy]

Just a little side note: Your 1 late mortgage payment may only be a small fraction as to why your credit score is low. You must also consider your debt to income ratio. If you are skipping some bills go each month, then I would say that your income isn't sufficient, thus high debt to income ratio.

I wouldn't look at filing BK just yet. FilingOnMyOwn makes a great point about having a financial tragedy happen, but you won't be able to file because you have already filed.

There are options for you. Your creditors are usually more than willing to help you out, by allowing a reduced payment for a few months, or a skipped payment (called a forebearance) for a month, maybe two, and without further effecting your credit. Your best bet is to keep in contact with them and explain your situation to them. You just might be surprised at what they can do for you.

A second job is a great way to bring in extra money to help you pay bills. Besides, it may only be temporary and you may be back on your feet sooner than you think.

[mwesthoven]

I haven't tried contacting any creditors other than my mortgage lender to get payments reduced or "skipped" for a month or two. I didn't know they would do that. I will try that. I hate to let go of my house but it seems like the reasonable thing to do, then start from scratch. I have some things to think about here. Thanks!

[BassBoy]

uld exhaust every option available to you, then, AND ONLY THEN, when all else fails, you may have to file BK. FIling BK should be the last thing you do. Imagine a house fire....you go to every room, down every hallway, looking for a way out, but when you're trapped, the last and only option is to jump out the window.