“Dear Steve,
Husband became disabled, we were in middle of major addition and remodel to our house. He had been doing all the labor. Already had credit card debt and started using the cards more to maintain lifestyle. Took out 401k loan and used charge cards to finish the house and get it ready to sell. Medical bills are increasing, income has decreased. House was on market for 7 months without one offer. Owe close to $50k in credit card debt, owe on Sallie Mae student loan that I co-signed. Cashed out everything we could to keep up with our debt and have run out of assets. Can’t sell the house. Just missed our first monthly payment on our credit card debts. Gas prices soaring and just can’t keep up. Mortgage is 40% of our monthly income.
I have offered to pay back my credit card debts in full over 60 months if the credit card companies will agree to charge me no interest or late fees. I have 7 debtors. One has agreed. Discover has refused. Waiting to hear from the rest. Do I continue to try with Discover Card? Or would it be best to just file bankrupcy?
Vivian”
Dear Vivian,
Based on the fact you’ve cleaned out your emergency funds and other assets just to stay current, I’d sure bet bankruptcy is the most logical approach to get this taken care of quickly and get you back to being able to save money again.
You can click here to find a local bankruptcy attorney and talk to them about your situation. Don’t worry, they won’t bite and they certainly won’t judge you either.
If you don’t like the first bankruptcy attorney, find a different local bankruptcy attorney. Compatibility and communication are important qualities when looking for a bankruptcy attorney.
Depending on your equity situation with the house you might want to hand the house back to the bank and include it in your bankruptcy. This would give you a legal fresh start and let you guys focus on doing better moving forward instead of trying to repair the past.
Let me know what you decide to do.
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