Bankruptcy Questions...

What is the name of your state? AZ


Is it possible to file bankruptcy without losing my home and vehicle?? I don't know whether bankruptcy or credit counseling would be a better option...I have heard good and bad things about both. I'm not sure what to do.

Anyone familiar with these?

Thanks!

It depends on how much you're talking about with your unsecured debts.

Originally posted by down&outinFL
It depends on how much you're talking about with your unsecured debts.

---------------------------------

About $25,000.

[Ladynred]

"Credit Counseling" .. CCCS, debt consolidation or settlement companies will ruin your credit faster than you can blink and cost you fees to boot. 25K isn't outrageous, but if its too much for you to manage your normal expenses and pay the bills, then its enough.

If your house and car payments are current, you can reaffirm the loans and keep them both, providing your equity is not above your States exemption limits.

Originally posted by Ladynred
"Credit Counseling" .. CCCS, debt consolidation or settlement companies will ruin your credit faster than you can blink and cost you fees to boot. 25K isn't outrageous, but if its too much for you to manage your normal expenses and pay the bills, then its enough.

If your house and car payments are current, you can reaffirm the loans and keep them both, providing your equity is not above your States exemption limits.

------------------------------

Thanks for your response, Ladynred!! I have a few more questions to ask you, as this is totally new to me.

1.) Is credit counseling worse on a credit report than bankruptcy?
2.) My house and car payments are current. I read somewhere that in my state (AZ) the limits are $100,000 house and $5,000 vehicle. What exactly does this mean? I purchased my house 5 yrs ago at $97,000 and I still owe $92,000. I also have a second mortgage and still owe $15,000. My vehicle was just purchased in May of this year at $35,000. Would I still be able to keep my house and vehicle going by the numbers I just gave you??

3.)You're right...$25,000 doesn't seem outrageous....but, my son is a newly diagnosed diabetic, we almost lost his insurance and while fighting for that, we lost wages.... In your personal opinion, what do you think my best bet would be??

Thank you so much for your time and help!

[Ladynred]

1 - Its just about as bad, yes. BK stays on your CR for 10 years, but its easier to re-establish credit after 2-4 years. If you use CCCs, debt settlement or consolidation, these companies typically allow your accounts go very delinquent and as far as charge-off to get the best 'deal'. These would stay on your CR for 7 years and it would be nearly impossible to get any credit for that 7 years. CCCS is NOT viewed as 'good' on your CR and settlements are as bad as bankruptcy.

2- Since you still have 92K owed on the first PLUS the 2nd at 15K, then you have NO equity whatsoever, you owe more than its probably worth. They don't use assessed values, they use the amount you could reasonably get if you had to sell it FAST. You can get a real estate agent to give you a 'quick sale' value.

You should still be able to keep the car as long as you reaffirm it. Here again, you're upside-down on the debt to equity ratio.

Sounds to me like you'd be a good candidate for Ch 7. If your disposable income after all your normal expenses is pretty close to zero, then CH 7 will be no problem.

Ladynred, thanks for responding once again. Do you recommend that I contact an attorney for more info on Chapter 7?

Thanks!

[Ladynred]

Definitely. BK is complicated and even though you CAN do it yourself its not always a good idea. If you make one mistake you can have the whole thing thrown out.

Call around to a few BK attorneys and get a couple of free consultations, most will do them. You want someone who does them regularly, they'll know the laws and the trustees the best.