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  1. #1
    Join Date
    Feb 2012
    Posts
    4

    Smile Should We File Bankruptcy

    My question involves bankruptcy in the state of: Missouri

    My husband and I have had a lot of financial issues the last few years. It started in 2009. We purchased a home and took on a mortgage of $133,000. At the time we were both working full time and I was also making $30,000 extra a year in freelancing. Since then, life has changed dramatically in numerous ways. I am not longer bringing in the freelance income. My husband and I both still have our full time jobs, but have not had any increases in salary.

    We are doing everything we can to stay afloat, but it seems to be impossible. Last year, we decided to do a voluntary foreclosure on our home. We are now renting an apartment. We also down-graded both our vehicles and now only have one auto loan. What is killing us is my students loans. I have over $70,000 worth of student loans... and my husband has about $3,000 or so. I realize we probably do not have any recourse with those as they are protected from bankruptcy proceedings. However, we also have over $6,000 worth of medical bills (my son broke his hip this year). We also have a credit card debt of around $5,000. My auto loan is about $11,000.

    We have fallen behind on everything except the auto loan. Would it be in our best interest to file for bankruptcy? And if so what type? Or what would the best solution be to get back in control of our debt nightmare? Any reasonable suggestions. BTW, our credit rating is already horrible due to the foreclosure, so that is not really a concern at this point.

    Thanks for the help!

  2. #2
    Join Date
    Sep 2005
    Location
    Behind a Desk
    Posts
    98,846

    Default Re: Should We File Bankruptcy

    We don't know how much, if any, equity you own in your home or vehicle. It's not clear that you have a significant amount of dischargeable debt. You should consult a bankruptcy lawyer with the details of your situation - the consultation will typically be free - to see if it's a viable option.

  3. #3
    Join Date
    Jan 2010
    Location
    New Jersey
    Posts
    3,666

    Default Re: Should We File Bankruptcy

    I would say "no". realistically you would only be filing for $6,000 in medical bills and $5,000 of revolving credit - for a total of $11,000. You could add the $11,000 auto loan for a total of $22,000, but then you would have to give the vehicle back to the lender. And even if you added the vehicle, I would still say "no".

    $22,000 isn't a very large debt. Try to pick up a part-time job and apply that income to the credit card until that balance is zero. Once the credit card is paid off, apply the income from the part-time job to pay the vehicle loan off. And then move on to paying the hospital and doctor bills off.

    Bankruptcy is a disaster on a credit report. You may think that your credit is ruined, and it may be, but late payments on a credit report look better then a bankruptcy. When a lender looks at a credit report and there is a bankruptcy there, they see another lender has lost money and they won't want to take a chance with you. When a lender sees late payments, they know that a lender has made money off you because the lender attached late payment fees and a higher interest rate to your account.

    Remember, the bank is a business, they want to make money, not lose it.

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