How should I handle my credit card debt since I am foreclosing on my house?
sam asked:
I am going to let my house in California foreclose. I have about $28,000.00 in credit card debt. Should I file for bankruptcy? Should I just not pay my credit cards? Or should I continue to pay my credit cards? Is there a certain dollar amount of income you are allowed to make to be able to file for bankruptcy?
I am going to let my house in California foreclose. I have about $28,000.00 in credit card debt. Should I file for bankruptcy? Should I just not pay my credit cards? Or should I continue to pay my credit cards? Is there a certain dollar amount of income you are allowed to make to be able to file for bankruptcy?
June 18th, 2011 at 5:12 pm
Yes, there is an income requirement that is specific to your state, marital status, and the number of wage earners in your family.
Anyone can file a chapter 13 bankruptcy where you repay some of the money to your unsecured creditors (i.e. charge cards) and all the money including back payments to your secured creditors if you wish to keep the property securing the loan(s) – like home and cars.
Chapter 7 erases most debt, and you can still keep the home if the mortgage company is willing to renegotiate the loan with you. Same with cars that are financed. Chapter 7 does not eliminate student loan debt or income tax debt.
What you need to do is to visit a bankruptcy attorney. The first consultation is free, and they can advise you on which chapter you are qualified for and what your options are. You need an attorney to file bankruptcy; don’t even think about trying to do it by yourself no matter what anyone tells you unless you have filed before and you know the entire process.
Here is a free site that can help you decide if you meet the means test in California:
June 19th, 2011 at 2:40 am
Since your home is being foreclosed on your credit is already destroyed. So that shouldn’t be an issue in this case. If your only remaining debt is your credit card you should first call the company and attempt to work out a settlement to reduce the amount you owe them. You can threaten bankruptcy to try to get them to work with you. If you find they will not talk with you because you are up to date on your payments, then you can stop making payments. I promise this will get their attention. We are finding that individuals who stop making payments are finding ways to settle with the company. However, if you have no savings and no way to eventually settle, then bankruptcy may be the only solution.
June 21st, 2011 at 7:12 am
Before you look into BK, you should check out. They are an alternative to BK. You will have exeperienced attorneys that will be contacting your creditors on your behalf.