Hello everyone,
I'm new to the forums here, but can't begin to describe how happy I am that a place like this exists, so thanks in advance to any insight anyone can provide.
My situation is regarding my parents, who are experiencing huge financial problems right now and are at risk of losing their house. Here's their situation: They are currently two months behind on their mortgage, the mortgage company has begun forclosure proceedings which will commence in about a month. They have between 40-50K in credit card debt, and can't even really afford to make their minimum payments, which in total would exceed 1K per month, their mortgage is around 2K, and I should mention that my Dad has been unemployed for about a year. My Mom makes decent money, she probably takes home about 45K a year. I have advised them that filing for bankruptcy is probably their best option. Although I'm not sure whether they would qualify to file chapter 7.
I know chapter 7 would be the only way for them to start over, and have a chance at making it work. From what I have gathered after talking to some people and reading some things is that with chapter 7, they would be able to erase the credit card debt, but would more than likely have to give up thier house b/c they are not current. I realize that once they file, the forclosure would be stayed and they would have some time to become current, which is a possibility. Now if they were to file chapter 13, they would be able to keep their house, and be able to set-up a plan to get current, but they would still be burdened with the huge credit card debt, correct? Which is the ultimate problem here. They now understand the grave nature of the situation they are now in, and have conceeded that regardless of what happens thay are more than likely going to have to move.
I guess the questions I looking to have answered are:
1) Realistically, how much disposable income can you have and still qualify for chapter 7?
2) If they did happen to qualify for chapter 7, is it possible for them to become current on their house in time to keep it?
3) From my point of view, it does not make sense for them to file chapter 13 to try and save their house, and still have the credit card debt, b/c they might be able to make it for a while but would no doubt be in the same prediciment later on, b/c they could pay the minimum payments on the credit cards, but it wouldn't put any dent in the principal, so they'd be paying over a 1K per month, and get nowhere, so I guess the question would be in thier situation, is it chapter 7 or bust? What I mean is that if they can't qualify for chapter 7, should they just sell their house and avoid the forclosure and not file chapter 13. It wouldn't really make a difference to their credit rating b/c it basically shot already, thay don't have a car loan and have'nt used a credit card in about 2 yrs. Does this sound right or am I missing something?
I'm new to the forums here, but can't begin to describe how happy I am that a place like this exists, so thanks in advance to any insight anyone can provide.
My situation is regarding my parents, who are experiencing huge financial problems right now and are at risk of losing their house. Here's their situation: They are currently two months behind on their mortgage, the mortgage company has begun forclosure proceedings which will commence in about a month. They have between 40-50K in credit card debt, and can't even really afford to make their minimum payments, which in total would exceed 1K per month, their mortgage is around 2K, and I should mention that my Dad has been unemployed for about a year. My Mom makes decent money, she probably takes home about 45K a year. I have advised them that filing for bankruptcy is probably their best option. Although I'm not sure whether they would qualify to file chapter 7.
I know chapter 7 would be the only way for them to start over, and have a chance at making it work. From what I have gathered after talking to some people and reading some things is that with chapter 7, they would be able to erase the credit card debt, but would more than likely have to give up thier house b/c they are not current. I realize that once they file, the forclosure would be stayed and they would have some time to become current, which is a possibility. Now if they were to file chapter 13, they would be able to keep their house, and be able to set-up a plan to get current, but they would still be burdened with the huge credit card debt, correct? Which is the ultimate problem here. They now understand the grave nature of the situation they are now in, and have conceeded that regardless of what happens thay are more than likely going to have to move.
I guess the questions I looking to have answered are:
1) Realistically, how much disposable income can you have and still qualify for chapter 7?
2) If they did happen to qualify for chapter 7, is it possible for them to become current on their house in time to keep it?
3) From my point of view, it does not make sense for them to file chapter 13 to try and save their house, and still have the credit card debt, b/c they might be able to make it for a while but would no doubt be in the same prediciment later on, b/c they could pay the minimum payments on the credit cards, but it wouldn't put any dent in the principal, so they'd be paying over a 1K per month, and get nowhere, so I guess the question would be in thier situation, is it chapter 7 or bust? What I mean is that if they can't qualify for chapter 7, should they just sell their house and avoid the forclosure and not file chapter 13. It wouldn't really make a difference to their credit rating b/c it basically shot already, thay don't have a car loan and have'nt used a credit card in about 2 yrs. Does this sound right or am I missing something?
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