I work a salary based job at 35 k yr my wife is a stay at home mom with two children we are tied into a lease to own on our house that we are supposed to find financing for in about a year from now.
I’m 25 k in medical debt do i file chapter 7 or ride it out my credit score is around 470 due to a nasty previous divorce my current wifes is around 600 due to only one loan ever in her name we have two medical judgements against us and the credit agency is not happy with the payments we can afford they have levied our account once and we continue to pay them about 200 dollars a month but we cant afford much more than that
From what you are telling me, it doesn’t seem very likely that you will be able to purchase the house about a year from now. With outstanding judgments and a credit score below 500, that is just not an option for you.
So you have two issues, the housing and getting rid of the debt.
First the debt. I would immediately meet with a bankruptcy attorney and look into a chapter 7 bankruptcy. With two judgments that are actively going after you and possibly some additional debts, it sounds like it might be time to get a fresh start. Especially if things are so tight that you can barely afford 200 a month.
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.
As far as the house is concerned, you are not going to be able to secure a loan in your current situation. With a chapter 7, you may have a chance to purchase a home in as little as 2 to 3 years. Without the bankruptcy it would likely be even longer given how long those judgments would be hanging around.
So you need to determine if you want to stay in this lease to own deal or not. Typically you are paying more for a LTO than you would be on a straight rental agreement. If it is going to be at least 2 or 3 years before you could potentially qualify you need to have a conversation with the owners. If you want to keep the house, they need to be willing to carry the note for several more years. If not, you need to start planning on different living arraignments. Better to plan ahead than to wait until you are supposed to close on the house and spring it on the owners at that time. Plus if you are paying above market rent in order to cover the option, you don’t want to stay in that deal any longer than you have to if it doesn’t look like the owners are willing to carry the note for several more years.
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