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  1. #1

    Default Debt Consolidation vs. Bankruptcy

    My question involves bankruptcy in the state of:
    Ok first of all thank u in advance and im glad to find this site.
    My question is not for myself but i will be involve with this coz we wil both gonna do it.
    I have this friend of mine. A very nice lady! BUt has a lot of debts HEHehe
    Well she owes 24k total to her credit card. and paying 400 bucks for her. she earns about 36k a year. But that money goes to pay rent, car, and health insurance and utilities plus miscellanous ( not sure how to spell it it) She gives about 1200 just to pay the interest. to her credit card then rest goes to bills and car payment. Well she mostly dont have anything left for her. and her house is a mobile house and its old model too so she cant use that as a collateral to get a loan to pay her credit card. and she wants to keep 1 card atleast..
    Question if we file chapter 7 can we put the mobile home she owns (and live) and keep her car.
    she needs that house coz thats all she have, she needs her car coz she needs to work and shes willing to pay the car. she just want to get rid off her 24k. My solution suggested is to try for consolidation. i called some places but they only offer 7k without assurance only after they run her credit score.
    Is there anyway we can ask for consolidation atleast, rather than Bk? if bk is the last resort, can she keep her car and continue paying it and keep her mobile home? any help wil be appreciated.

    thanks!

  2. #2
    Join Date
    Apr 2007
    Location
    Southeastern Michigan
    Posts
    1,226

    Default Re: Debt Consolidation vs. Bankruptcy

    Debt consolidation depends on many factors. Nowadays, what she would do is contact a bankruptcy attorney. Part of a pre-bankruptcy qualification would be for her to contact a debt management firm (recommened by the attorney based on their qualifications) and take a debt assesstment intake interview (usually over the phone for a cost of around $50 or so.)

    If they could not assist, the attorney would recommend either Chapter 13 (creditor repayment) or Chapter 7 (liquidation). In either case, the filing depends on income. If she has an income and meets the standards of a means test (my assumption), she must file 13. If she does not meet the minimal requirements or has no income, then it's 7.

    IMHO: If there is that much debt, this is the best path to take - consult with a bankruptcy attorney and go from there.

  3. #3
    Join Date
    Dec 2007
    Location
    Ohio
    Posts
    2,006

    Default Re: Debt Consolidation vs. Bankruptcy

    I agree with Mikey. I don't see any alternative but Ch 7 as I don't think she'll make it with a 13.
    You are able to keep lots of things (like your house and car). Also, most consults with a bk attny are free. She doesn't have too much to lose at this point.

  4. #4
    Join Date
    Apr 2007
    Location
    Southeastern Michigan
    Posts
    1,226

    Default Re: Debt Consolidation vs. Bankruptcy

    Thanks gigirle! And I agree with you. After looking at what she owes, her income (minus taxes) and what little disposable income she's left with, if any, even in the best situation chances are she couldn't make the 5-year payoff with Ch. 13.

  5. #5

    Default Re: Debt Consolidation vs. Bankruptcy

    Thanks to all of you people!
    Well shes going to meet the lawyer next week, base on the information of my friend. she should be able to file Chapter 7. But she is coming by the office to take the means test. I hope she can make it to chapter 7 so she can totally get rid off those credit card.
    Well i will type clearly coz my typing sucks.
    these are the information i got from her. and the lawyer got from her
    she earns 36k a year plus bonus.
    she pays 400 buck a month for the car.
    she pays 1200 flat to pay the credit cards just the interest.
    she has to pay her rent space ( mobile home) 500 in total including utilities.
    Im not so sure if celfone and cable and internet and home fone are included.
    plus food, gas, etc
    She owns the house an old model 70's model.
    I think her house is even under the name of her, and husband, and one of her daughter.
    her objection is to get rid off the 24k debts so she can just continue the car and keep the rest to pay her house and enough to have a simply living support the necessity.,
    not to mention she has medical, and other insurance and owe property taxes
    Im thinking that she will be able to get rid off the credit cards with so much high interest ( 24k) and all maxed out. and keep her mobile home that she lives at, and her car that shes willing to pay and need to go to work.

  6. #6
    Join Date
    Apr 2009
    Posts
    1

    Post Re: Debt Consolidation vs. Bankruptcy

    I am not sure on the original question, but I do know of a reputable source OF debt consolidation. It is a fantastic resource and they say a few thousand people have already used it. I am sure that anybody looking for a way to solve their debt crisis can find help there. Check out the link in my signature for the information, and I hope this helps you out.

    Mark - Debt Consolidation Union

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