Debt Relief Service Did Not Mention Bankruptcy to Me But Debt Settlement Lawyer Did. – Patti

“Dear Lewis,

Have spoke with a local reliable debt relief service. They sent me papers on all my credit, debt/income ratio. Even though it’s grim, they did not say bankruptcy, but left it up to me. My credit score is 750, but my income does not outway the credit card debt, $24,000. Many medical bills & drug co-pays even with ins. Am not behind on anything, but have started to use up my credit cards for food, gas & other obligations. Am on S.S. Disability & receive a pension, but I am going backward. The balloon for my mort. is due 1st of the yr. The bank said they would give me options, as they don’t want the house. But they don’t know the debt/income ratio yet.

I saw a free consult lawyer to help with debt settlement & he said bankruptcy is the way to go. He wants me to stop paying all credit cards & mortgage. I am 64, have never been in anything like this. It started 3 yrs ago…even though he said credit score would be restored in 1 to 2 yrs, I am so scared of bankruptcy. I can’t imagine that word. Lawyer said I can talk with them further, but don’t mention I talked to a lawyer or bankruptcy. I said, why can’t I just do bankruptcy on the credit cards, but save my house. Then he said, then keep paying on the mort. I’m on anti-depressants & tranquilizers, cry all the time, please help.


Dear Patti,

I probably agree with the bankruptcy attorney. If you are using credit cards for necessary items, then you are not in a position to use debt settlement to pay your debts.

But the larger problem is that even if you file bankruptcy to get rid of the unsecured debts, you will no longer have credit cards to buy your necessary items.

How much are you paying on the home mortgage? That might be the bigger issue. Are you trying to save something that is far upside down and with a payment that is larger than your means to pay it?

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I am also very concerned with the fact that it is a balloon due in a year.

In order to save the house through bankruptcy, you would need to pay the mortgage under the current terms. What happens if the mortgage company decides it does not want to enter into a new mortgage?

Unfortunately, I think I have asked more questions that I was able to answer. That is why sitting down with an attorney in your area is the best advice I can give.

Good luck!

My name is Lewis Roberts and I’m an attorney licensed in Florida and Georgia. My practice focus is consumer bankruptcy, real estate issues/closings, and mortgages. I also have Florida real estate broker and mortgage broker licenses. I am a proud member of the National Association of Consumer Bankruptcy Attorneys (NACBA), National Association of Consumer Attorneys (NACA), and a graduate of Max Gardner’s Bankruptcy Boot Camp. I enjoy helping people with decisions that impact their financial well-being.

Legal Disclaimer: This is for educational purposes only. It is not to be relied upon as legal advice. It also does not create an attorney-client relationship. No such relationship is formed with attorney without a written agreement.

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