I’m Afraid of Bankruptcy But Struggling Each Month

“Dear Steve,

Single mother, income 1600 after deductions, credit card debt 27,000.

I have a house and I’ve been making payments for two years of 928 monthly. I have an equity of 26,000. No paymentys behind.

You advised me about filing chapter 7 bankruptcy, and even though I don’t want to do it, at this moment I am sure It is the best option for me. I live in North Carolina.

Am I risking my home? What about the equity on that. What are the worst consecuences after bankruptcy besides credit report.


Dear Esperanza,

If you have that much equity then yes, it would be a problem with a chapter 7 bankruptcy. In order to protect the home and keep it but eliminate your debt you’d have to look at a chapter 13 bankruptcy. But no decisions should be made without discussing your situation with a local bankruptcy attorney.

You can click here to find a local bankruptcy attorney and talk to them for free about your specific situation. Get the facts and then you can make an informed and educated decision if bankruptcy is right for you.

adding upIf the problem is your month-to-month expenses are too much, then we have to find a way to reduce those expenses. It might just be the home is too expensive for you based on your current income. Just the mortgage payment and credit card payment appear to clean you out.

If you’ve been putting expenses on the credit card and not able to pay them off, then the path you are on is not sustainable and you need to change it before the situation gets worse.

Sadly, it might be that you would need to sell the house and lower your living expenses by renting. This would also free up money to use to repay or settle the credit card debt.

The goal is to get you in a position where you can live within your income and start building an emergency fund or savings account.

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The cost of homeownership goes far beyond just the mortgage payment and when you factor in taxes and property upkeep the cost to own a property rather than rent in your area, might be significantly more.

In general there is no reason to be afraid of bankruptcy. See the links below for more information.

Please post your responses and follow-up messages to me on this in the comments section below.


You are not alone. I'm here to help. There is no need to suffer in silence. We can get through this. Tomorrow can be better than today. Don't give up.
Damon Day - Pro Debt Coach

Steve Rhode

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