BK? Lawyer says YES, Mortgage Broker says Don't Do It...

[skyan]

We are still trying to decide if BK is the best thing in our situation. We have been to 2 attorney's and they both say YES, CH 7. But we really were trying to avoid filing. Had hopes of DH getting a better paying job. The last we used our credit cards was Nov. 2001. At that time DH was out of work for a little over a year. (lost his job in June, but we continued to pay until it was just too much of a burden(Nov)). He did work some, but nothing was permanent. So, during that time we couldn't afford any payments on the cards after Nov. Also at that time the cards were only about $8000. They ALL charged them off then the following June-August. DH just did get a job then that July, (2002). But the pay was less than his old job, and by this point the cards, (due to fees and interest), were up to $13000. And the interest rates up from mid teens to almost 30. We just could not afford to start repayment at what each of the collection agencies wanted. Only one of them has sued so far. Back in 2003, I think. Anyway, my husband really wants to buy a house, and I say we are still not ready, regardless of our old debt. So I told him to go talk to a Mortgage broker and that would prove which of us was right. Well, I didn't want our credit pulled because I have no intention of buying a house right now. But we were very honest and told the man EVERYTHING. He said that with the judgement, no way, but since that is mine, he suggested my DH buy by himself. Then he said that as long as we get new credit and pay good for 6 months to a year, he could get us financing. And he said DO NOT FILE BK. He said if we were going through all that right now, he would agree that we should. But he said the debt is old and they won't care.

I am REALLY afraid to trust that advice. I am afraid that we still might get sued in the future for some if not all of the rest of these. I am worried about wage garnishment, or bank account garnishment. My DH is too. But he wants me to consider the Mortgage Brokers advice. The mortgage broker thinks that since they haven't sued yet, they won't. I don't trust that.

So, what do you think? Just because the debts are old.... does that mean we should just live with the constant collections calls and letters? Is it true that they are not likely to sue since they haven't yet?

Thanks if anyone has any facts to offer or advice from experience.... Or if you are in collections and know how this works, etc...

Thanks.

[HHM]

The debts are not THAT OLD. Your going to be dealing with these debts for years, especially if they are already in collection and you have one law suit, you can expect that to continue.

However, the overall balances due is relatively low so BK may not be the best option, however, you need to deal with those debts one way or the other. After October 17, 2005, your bankruptcy options will be more limited and more expensive. Face it, your credit is already shot, BK will not make it worse. But unless you other options for dealing with that debt (i.e. debt settlement), bk would be the quickest, cleanest, and cheapest way to deal with the debt.

Regarding the broker, the last person you should take advice about debt relief from is a mortgage broker. Right now he sees you as a sub-prime loan meaning he charge hella front and back-end points.

I think you should take steps to rehabilitate your credit (which may mean filing BK), and then buy a house when you can get a better deal, you shouldn't make a long term committment (buying a house), based on short term considerations.

[skyan]

Thank you very much. What you say is how I have been looking at it. I have been wanting to file for about a year, but my DH keeps trying to put it off. Both attorney's we talked with said that we will still qualify for a CH7 under the new laws, but they added and I agree that we might as well get it over with.

[Dawn1970]

the last person you should take advice about debt relief from is a mortgage broker.

Amen to that. No creditor is going to recommend bankruptcy. The lawyers are way more likely to have your best interest in mind.