Overwhelmed, depressed, and not sure what to do...

[GT350]

What is the name of your state (only U.S. law)? Arkansas

I'm 62 & married. I'm employed (spouse unable to work due to medical problems but turned down for disability assistance) , but confused as to what to do next. Unable to make payments on all of our credit card debts (fearing legal action from a few larger creditors. Credit score deteriorated, no savings left, ongoing family medical bills, sizeable equity in home but credit score prevents accessing it. Desperately in need of advice as to what to do. No family/friends to ask advice or help from, depressed to the point that we have been unable to even document all our debts or work out a budget. Overwhelmed in every way. Recently went to Consumer Credit Counseling, set up a plan, but only able to make the first monthly payment, so that fell through. With the equity in our home, I wonder if we can even qualify to file bankruptcy, and unable to even pay for an attorney's advice. How do we get a grasp on how to avoid being thrown out of our home with no where to go? So far we've managed to keep our mortgage & utilities current, but both our paid-for vehicles are older & in need of maintenance, so every day I pray going to & from work for no breakdowns, since without transportation, I'd lose my job, and with my age, prospects for a new job are slim to none. Any suggestions on what to do or where to turn? Thanks for any positive input...

 

[LdiJ]

What is the name of your state (only U.S. law)? Arkansas

I'm 62 & married. I'm employed (spouse unable to work due to medical problems but turned down for disability assistance) , but confused as to what to do next. Unable to make payments on all of our credit card debts (fearing legal action from a few larger creditors. Credit score deteriorated, no savings left, ongoing family medical bills, sizeable equity in home but credit score prevents accessing it. Desperately in need of advice as to what to do. No family/friends to ask advice or help from, depressed to the point that we have been unable to even document all our debts or work out a budget. Overwhelmed in every way. Recently went to Consumer Credit Counseling, set up a plan, but only able to make the first monthly payment, so that fell through. With the equity in our home, I wonder if we can even qualify to file bankruptcy, and unable to even pay for an attorney's advice. How do we get a grasp on how to avoid being thrown out of our home with no where to go? So far we've managed to keep our mortgage & utilities current, but both our paid-for vehicles are older & in need of maintenance, so every day I pray going to & from work for no breakdowns, since without transportation, I'd lose my job, and with my age, prospects for a new job are slim to none. Any suggestions on what to do or where to turn? Thanks for any positive input...

How much is your house worth?

 

[GT350]

Overwhelmed

How much is your house worth?

It appraised for $95K, and we have $48K in equity. Our debts, besides the mortgage, are approximately $25K.

 

[LdiJ]

It appraised for $95K, and we have $48K in equity. Our debts, besides the mortgage, are approximately $25K.

Then selling the house, clearing your debts, and renting for a while until your credits scores improve is likely your safest bet.

You might be able to exempt your home equity in a bankruptcy:

The Arkansas Homestead Exemption Amount

In Arkansas, homeowners must choose between two different homestead exemption options.

Under the first option, a married person or the head of a family may exempt an unlimited amount of value in his or her home or other property covered by the homestead exemption if the property is ¼ acre or less in a city, town, or village, or 80 acres or less anywhere else. If the property is between ¼ acre and 1 acre in a city, town, or village, or between 80 acres and 160 acres elsewhere, then the homestead exemption is $2,500. Further, homesteads may not be larger than 1 acre in a city, town, or village, or over 160 acres anywhere else.

Under the second option, homeowners may exempt $800 in their home or other property covered by the homestead exemption if they are single, or $1,250 if they are married.

Unless you meet the requirement for a 100% exemption, you would do better selling your house and paying off your creditors yourself. You would end up with some money to put back for a down payment on another home. If the trustee sells it in a bankruptcy it might get fire-saled or auctioned and you might not end up with anything for yourselves.

 

[GT350]

Exemption

Thank you, LdiJ. There may be a silver lining to the cloud. Thanks for taking the time to share your knowledge.