Reader Questions

What Are My Alternatives to Bankruptcy? – Lena

I’m recently divorced and have $80K of unsecured credit card debt. I have not made a payment on any credit cards or my 2nd mortgage in over a year.

I’ve consulted and retained a BK attorney, but I’m now having 2nd thoughts. Do I have any other options? I don’t make enough money to pay ALL of my bills each month (including the cc debt and 2nd). But I have been able to pay my 1st mortgage, car, insurance, groceries, utilities and taxes. The only reason I have been able to do this is because I’ve depleted my savings and 401K.

In Aug 2009, I was able to modify my 1st mortgage. But I have not addressed my delinquent 2nd which is around $200K (I’m not even sure where it currently stands). The balance on my 1st is $569K and my home is supposedly worth $640K.

Moving forward, I am getting a roommate who will move in in January, so that will help a little, but not enough to pay for the credit card debt AND my mortgage.

My questions are:

1. Is BK my only option? Is it my best option?
2. How should I address my 2nd mortgage? I do NOT want to lose my home.

Thank you for your time.

Lena




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Sincerly,
Steve

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About the author

Steve Rhode

Steve Rhode is the Get Out of Debt Guy and has been helping good people with bad debt problems since 1994. You can learn more about Steve, here.

2 Comments

  • Hello Lena,

    Given that you are already a year behind on these debts and the only way you have been able to make the payments when you were making them was to drain your savings and retirement, I would say that BK is likely your best bet at this point.

    What did the BK attorney say about the house? Are they looking at a chapter 13 to try and cram down the second and then put you on a repayment plan with the credit cards? If so what is the monthly payment going to be in the chapter 13? Do you feel that it is manageable for you to make the payment?

  • Hello Lena,

    Given that you are already a year behind on these debts and the only way you have been able to make the payments when you were making them was to drain your savings and retirement, I would say that BK is likely your best bet at this point.

    What did the BK attorney say about the house? Are they looking at a chapter 13 to try and cram down the second and then put you on a repayment plan with the credit cards? If so what is the monthly payment going to be in the chapter 13? Do you feel that it is manageable for you to make the payment?

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