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  1. #1
    Join Date
    Oct 2009
    Posts
    2

    Default Best Option (7 or 13)

    My question involves bankruptcy in the state of: nj

    Hi there,

    I really appreciate if you can provide me response for the following situation.

    I have credit card debt of $45,000 (6 credit cards). I have enrolled Debt settlement program with Law firm. I am paying $500 every month. They said it will take 5 years to settle with all credit cards.

    And also i have two rental properties (Arizona) which went on foreclosure (not sure whether sold or not), out of which on one house i have second mortgage of $95,000.

    First house Loan 1 # $150, 000
    First house Loan 2 # $95, 000

    (First house worth - $85,000)

    Second house Loan 1 # $195, 000

    (Second house worth - $150,000)

    And also i have primary house (currently living) has two loans, First loan ($350, 000) i got modification (thru Obama MHAP) because of hardship. where as second loan of $49,000 which i am not paying since January.

    House worth of $350, 000

    I am barely meeting my payments for mortgage and all expenses every month.

    Can you please let me know,
    1. If any of the above banks (credit cards or Mortgage) file suit against me, what is the best approach to go for Bankruptancy (Chapter 7 or 13)?

    2. OR i can file Bankruptancy before any of the banks file suit?


    Please let me know, if i confuse you or any clarifications to the following email address.

    Thank you in advance,

  2. #2
    Join Date
    Mar 2005
    Location
    Michigan
    Posts
    28,906

    Default Re: Best Option (7 or 13)

    You can get a sense of both types of bankruptcy here; but do you even meet the means test for Chapter 7? That is, is your income is greater than the median income for your state of residence and family size and, if so, can you nonetheless qualify for Chapter 7 based upon qualifying expenses as defined by the Bankruptcy Code and other deductions, including regular charitable donations (up to 15% of your income), school expenses, payments on 401(k)/IRA loans, and health Insurance?

  3. #3
    Join Date
    Aug 2008
    Posts
    19

    Default Re: Best Option (7 or 13)

    I know sometimes on here the standard answer is consult an attorney, but in your situation I would have to agree. I filed Chapter 13 and have made 8 payments so far out of a 60 month plan. I had 60k in debt, and I am paying back 10% of the total debt through the trustee of the Bankruptcy court.

    Going to a Bankruptcy lawyer is your best bet...most have free consultations for your first visit, to give you an idea of your options. My humble advice is...find a lawyer who has an established practice, and if you know anyone who can recommend one, so much the better. I was referred to mine from a friend, and he was excellent.

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