Bankruptcy and keeping your house
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Bankruptcy and keeping your house
| Fri, 10-21-2011 - 11:25am |
My DH and I have gone through a financial nightmare the last five years.
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As for contracts such as cell phones and satellite TV, I don't have any experience with those, you would want to consult an attorney for an answer on those. Its best to get a consultation with a few different attorneys to feel out what their answers are and what you are most comfortable with. You will need to go through some debt counseling as part of the BK process and yes, usually that is one of the first things they say is to turn off and get rid of any unnecessary expenses, but as you said, you have to way the price of the ongoing service or the early termination fees and how the bankrutpcy would treat those contracts. Hugs to you and your DH. If you have any other questions, feel free to ask!
Hi BJ,
Norma
"Patience is the best remedy for every trouble"- Plautus
Just to clarify, whether or not you can keep your car also depends on the value of the car & whether or not you use the federal or state exemptions.
Hi,
Don't file bankruptcy, especially if you're able to make your minimum payments. It just not worth the 10 years you'll trash your credit. THINK. It takes an average of 18-24 months to become CC debt free if you are willing to not panic, work hard, and sacrifice for the short term.
Plus, bankruptcy will not teach you a darn thing about handling your money better. A full 30% of those who file once are back filing a SECOND TIME within 10 years. That's just STUPID.
Here's my two cents:
How much do you owe on the cars? My advice: sell them both, pay off your notes and get a good "junker" to drive to work, car pool, take the bus. The inconvenience will pay for itself in a couple of years. Take the money you were paying on two newer cars and lay it on your credit cards.
On the credit cards: are you able to keep up with your minimum payments? If so, you need to do the above, and then reduce your other bills, such as cut down on the cable package to the minimum, if you can't cancel without paying a penalty, then cancel the service as soon as you can cancel without a penalty.
P.S.
About "settling" on credit cards. BE CAREFUL. If you settle for less than the balance owed, that's great, HOWEVER, you will pay income tax on the amount you did not pay. For example, if you owe $10K on a card and the CC company agrees to take $2K you will pay income tax on the $8K. It's considered "income" in the eyes of the IRS. So, if you can't afford to pay income taxes on it, don't "settle." Pay off the cards.
Also, you mentioned cancellation fees for services like cable and cell phones. If its a couple hundred bucks to cut the services it's worth paying. You'll save alot more money in the long term by not having the bills in the first place. If you can't afford to cut everything off in the same month due to cut off fees, then stagger them - cut cable one month, cell phones the next. If you ever go back to these services be very smart about it. Don't put yourself back in that position again.
Good luck. You can do this if you put your mind to it.
I think part of your advise is good, but I do think I have learned
Norma
"Patience is the best remedy for every trouble"- Plautus
Norma
"Patience is the best remedy for every trouble"- Plautus
Like Norma, I agree with a lot of the advice you put into your post, but I have to disagree your second paragraph as a blanket stereotype.
Hello wisdomtooth2020,
Want to jump in here and put another perspective on your post:
You wrote, "How much do you owe on the cars? My advice: sell them both, pay off your notes and get a good "junker" to drive to work, car pool, take the bus. The inconvenience will pay for itself in a couple of years. Take the money you were paying on two newer cars and lay it on your credit cards".
Hi bj0322174.
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