In substantial debt and considering best option to get out of it.
My wife and I have $104K in unsecured debt, owe $510K on our home that is now worth $230K, and we have seen a 30% reduction in our income this year which is the straw that broke the camel’s back. Our expenses now exceed our income. We have a child who will be ready for college in 3 years and want to be able to help him with college when the times comes. What is our best route to get out of this debt?
Here are my options as I see them:
1. Short Sale of home and rent, along with debt settlement to get rid of unsecured debt.
2. Chapter 13 BK that would allow us to stay in our home and get rid of the debt in 5 years.
Any advice is greatly appreciated.
Both options you mentioned are possible. The Chapter 13 bankruptcy could strip down part of the mortgage if you have a second mortgage.
Your should definitely go and talk to a local bankruptcy attorney you like, face-to-face about your situation. Ask questions, get informed about what bankruptcy would mean for you.
Another option worth considering is to realize that you have been dealt an unexpected hand. Rather than try to bargain your way into keeping what you have, why not consider a true fresh start.
By giving up your house and renting something else local you can afford, followed with bankruptcy, it is the fastest way for you to reboot your life, get in shape to afford to pay for school and get back on track. It is a huge change in your life but it is also one way to get everything readjusted to where it needs to be.
If you go the Chapter 13 approach you are not going to be able to have enough extra cash to save each month to prepare for your future responsibilities? Doubtful. All I ask you to consider is that maybe the time has come for more drastic action, like a Chapter 7 bankruptcy, in order to achieve a more drastic, and beneficial result.