eligible for bankruptcy?

New York and Wisconsin

Debt:
-- ~14,000 in credit card bills (14-20%, 3.9%, 7.9% interest)
-- ~4,200 on a personal loan thru my credit union (12%)

Assets:
-- 1991 2-wheel-drive truck with ~135,000 miles
-- a comic book collection that probably has more value to me than anything. IF I could find buyers for each book separately, most are probably worth a buck or less, some are worth $10-30. If sold as a collection, maybe I'd get $800-1000??
-- SSI disability payment of $842/month that began in February

Problem:
-- I developed a disease over the last 3 years, that eventually resulted in my losing my job last August (and being marginally employed for a couple months before that). I have been in treatment for most of the last 7 months. I am partially better, but my job opportunities are still limited by the disease.

"Odd" debt:
-- about 4-5 years ago, my parents took out a small mortgage on their house ($29k) and gave it to me to pay off my consolidated student loans. They did this because at the 12% interest the government was charging me, I wasn't getting anywhere on the principal. Until last July, I was simply making the monthly mortgage payment "for them." I realize you can't discharge student loans thru bankruptcy, and I could handle making that payment anyway.
-- to get this medical treatment, my parents have taken out more money on that mortgage. All the money owed on that mortgage has gone to me -- either for my student loans, or for treatment, or they gave me a bit of cash (which might not have come from that account). When I started treatment, the mortgage was at about $15k -- the remainder of my student loans. When they paid for treatment, they wrote checks from the mortgage account directly to the treatment center. I was the only one receiving treatment. I have so far borrowed an additional $18k on this account for treatment.

I worked in New York and "moved" to Wisconsin for the medical treatment. I get mail in Wisconsin, but still have a NY driver's license and my truck is still registered in NY. Since moving, I have added ~$5k to my credit cards. I mostly use my credit cards for things like gas, groceries, my truck insurance, toilet paper, etc. Some small gifts for family members for birthdays and such. There are a few "questionable" items -- for example, a friend has needed plane tickets twice and doesn't have a credit card, so I got the tickets online for her, and she paid me back.

So, I am marginally employable, trying to find a job I can do in a very economically depressed area of the country (and where there is almost no work in my previous field). I have no money to relocate to where there might be jobs, and no guarantee that I could do the work even if I did move. (I could borrow more money against that mortgage to try to finish treatment, but there is no guarantee the treatment would completely work.) I am barely able to make the minimum payments on my credit cards. My parents have been making the monthly mortgage payments since last July when I was no longer able to work.

I have excellent credit; I've always paid my bills. I certainly didn't ask to get sick, though, and I didn't have any health insurance either (I was an independent contractor and couldn't afford to get it on my own).

What are my options, if any?

Thanks!

[Ladynred]

There really is no 'eligibility' for bankruptcy. The issue comes down to how much disposable income you have left each month and what assets you have. Sounds to me like a Ch 7 would work for you given that you have little income and few assets to protect.

Since you LIVE in WI, then you could file in WI, doesn't matter where your DL is really, its whether or not you have established a residence in WI.

The student loans aren't generally dischargeable, however, given your reduced capacity to work, a recent Supreme Court decision regarding the dischargability of student loans and proving hardship may help you.

I would suggest you call around and go for a couple free consultations with BK lawyers and see what they tell you. A word to the wise - if a lawyer starts talking CH 13 before he/she even LOOKS at the totality of your financial situation - walk away. That lawyer is looking for the higher fee that a CH 13 would bring.

Thank you, Lady in Red!

I guess my biggest question is -- because my medical payments (and student loans -- which I've been trying to pay off since 1994) are on a mortgage that is in my parents' names....what does that mean? Maybe I could only discharge my credit cards and the personal loan. [Of course, that would help.] But I don't want my parents to suffer any consequences of my inability to work/find work. I mean, they already suffer some consequences because they have to make a mortgage payment after their house was paid for and after retirement....but I wouldn't want to jeopardize their home ownership or something like that.

Thank you very much for the tip about a lawyer! I certainly don't have any assets to worry about saving. If the bankruptcy trustee thinks he can get something for my truck, well, good luck to him or her!

-colbey

[Ladynred]

The problem is that the mortgage that was taken out to pay your medical bills and your student loan is not YOUR debt - its all in your parents names, therefore you cannot include it in your bankruptcy. You can get relief for your own debts, but that's it. Since you have no formal contract for paying your parents mortgage, you can't list those payments as an expense either - the Trustee won't buy into that.

Go for a few consultations - see where you stand.