“Dear Steve,
I have credit card debt and need help. I have $3000 at 14% interest, 10,000 at 18%, and another $17,700 at 18%. As of right now our mortgage and all these cards are paid up. I had been late on a mortgage payment about a month ago, but this too was caught up. However, we are self employed and right now the money isn’t coming in, so I am trying to be a little proactive. In 2010, we made after taxes only $10,000, hense some of the debt above. In 2011, we made $39,900 after taxes. But this year we have made only about $8,000 so far. We pay alittle more than the minimum on 2 of these and the minimum on the 3rd. I feel like we are never going to get out of this hole. We own our home and also have a $9,000 equiline balance. We have cut up our cards and no longer use them even though the accounts are still open. Creditors will not lower our % rates.
Would you recommend Chapter 13 or Chapter 7? I just want this all done with. I don’t want to lose the house…but I would really like to get rid of the credit card debt.
Erin”
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The Answer
Dear Erin,
Am I correct in the fact you own your house free and clear except for a $9,000 equity line of credit? Or do you have an additional mortgage on your house? How much is your house worth?
If the credit card debt was gone, with your low income you reported, would you be able to live month to month without using credit?
Please post your responses and follow-up messages to me on this in the comments section below.
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