Bankruptcy?
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Join Date: Mar 2008
Posts: 1,287
Bankruptcy?
This is a question that keeps coming up between my RAH and myself. I've always been firm against it, but lately, I've been feeling overwhelmed with financial obligations and feeling like maybe my husband is right and they will never get better.
A short history for those who may not know me: RAH has been clean almost 18 months. We've made good progress in our relationship (not perfect) and in our own respective recoveries. He goes to NA; I go to Al-Anon. We share things and communicate more effectively than we have in a long time. But this issue keeps coming up - we just can't agree on it.
So, here's the deal - because of his relapses and because of my co-signing his stuff, so to speak, we've been behind financially for a while. A lot of it IS a direct result of his poor choices while using. Some is, admittedly, my own doing in trying to make things work during that time. I'm normally very frugal, but in trying to make things work, I "robbed Peter to pay Paul".
We don't have a lot of credit card debt, thankfully. However, we're behind on our mortgage and have a sizable HELOC. My RAH doesn't think we'll be able to crawl out of it. I think we might be able to. Our credit sucks so we can't refinance and we didn't qualify for a home loan modification. We can catch up on our mortgage but the HELOC is another story. At our interest rate, we may be in trouble in the future.
Now, here's the part we really disagree - I feel that we should NOT take the easy way out and file bankruptcy. I feel that it would be asking the government to pay for our mistakes - it might be hard, we may have to pay for a long time, but I'm willing to do that to feel right with the world. He thinks bankruptcy is there for those who need it.
I know people who have filed and have taken advantage of it and also those who have really needed it. Guess I don't feel we really need it yet; we both have decent paying jobs.
I know I need to learn more about the process and how it works, but in the meantime.....any thoughts from my ever-wise SR friends?
A short history for those who may not know me: RAH has been clean almost 18 months. We've made good progress in our relationship (not perfect) and in our own respective recoveries. He goes to NA; I go to Al-Anon. We share things and communicate more effectively than we have in a long time. But this issue keeps coming up - we just can't agree on it.
So, here's the deal - because of his relapses and because of my co-signing his stuff, so to speak, we've been behind financially for a while. A lot of it IS a direct result of his poor choices while using. Some is, admittedly, my own doing in trying to make things work during that time. I'm normally very frugal, but in trying to make things work, I "robbed Peter to pay Paul".
We don't have a lot of credit card debt, thankfully. However, we're behind on our mortgage and have a sizable HELOC. My RAH doesn't think we'll be able to crawl out of it. I think we might be able to. Our credit sucks so we can't refinance and we didn't qualify for a home loan modification. We can catch up on our mortgage but the HELOC is another story. At our interest rate, we may be in trouble in the future.
Now, here's the part we really disagree - I feel that we should NOT take the easy way out and file bankruptcy. I feel that it would be asking the government to pay for our mistakes - it might be hard, we may have to pay for a long time, but I'm willing to do that to feel right with the world. He thinks bankruptcy is there for those who need it.
I know people who have filed and have taken advantage of it and also those who have really needed it. Guess I don't feel we really need it yet; we both have decent paying jobs.
I know I need to learn more about the process and how it works, but in the meantime.....any thoughts from my ever-wise SR friends?
I'm no angel!
Join Date: May 2005
Location: tampa, fl
Posts: 6,728
Well, you can file Chapter 7, complete liquidation, or, you can file Chapter 13 reorganization. The bankruptcy will stay on your credit for 7 years. Not to mention that many companies will not hire anyone who has filed bankruptcy, they figure if you cannot manage your money, how can you manage your job.
Read up on the above, talk to an attorney and make your decision from there.
Read up on the above, talk to an attorney and make your decision from there.
Member
Join Date: Sep 2010
Posts: 12
You can sit down for a free consultation with a bankruptcy attorney. A good one will steer you in the right direction for you. It costs about 1100 to 2200 depending on which route you go. how much is your mortgage compared to rent etc? You have your house. If your house is valued considerably less than what you owe then it may be a good option, but look at the rentals out there. the costs are high and what is out there is not that great.
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Originally Posted by dollydo 
Well, you can file Chapter 7, complete liquidation, or, you can file Chapter 13 reorganization. The bankruptcy will stay on your credit for 7 years. Not to mention that many companies will not hire anyone who has filed bankruptcy, they figure if you cannot manage your money, how can you manage your job.
Read up on the above, talk to an attorney and make your decision from there.
Read up on the above, talk to an attorney and make your decision from there.
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Join Date: Mar 2008
Posts: 1,287
Originally Posted by WHATTODO2
You can sit down for a free consultation with a bankruptcy attorney. A good one will steer you in the right direction for you. It costs about 1100 to 2200 depending on which route you go. how much is your mortgage compared to rent etc? You have your house. If your house is valued considerably less than what you owe then it may be a good option, but look at the rentals out there. the costs are high and what is out there is not that great.
Thank you!
Nature Girl
Join Date: Mar 2002
Location: By The Lake
Posts: 60,328
I agree, talk to a bankruptcy specialist (in Canada they are called Trustees in Bankruptcy) who may charge you nothing for the first consultation.
Find out your rights and how it would work for you. If your credit is already shot, it may be the way to go. However, of you have the ability to repay (by having good incomes) it may not be allowed.
Laws differ from state to state and country to country, but getting the information first will help you make the right decision.
Hugs
Find out your rights and how it would work for you. If your credit is already shot, it may be the way to go. However, of you have the ability to repay (by having good incomes) it may not be allowed.
Laws differ from state to state and country to country, but getting the information first will help you make the right decision.
Hugs
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Join Date: Sep 2010
Posts: 12
I had to declare bankruptcy because of my AH. There was no point in saving my house...the value, the bills and not able to pay the mortgage on my own. again, call around to different attorneys. you should get a free 20 minute consultation. go to a few attorneys...you will gain a lot of knowledge which will allow you to make the right decision for you and your family. it's hard to get your credit back, save for a new home etc. especially now it is very hard to get a mortgage compared to a few years ago. if you own and can stay put that is what i would do especially if your mortgage is less or the same as current rent
I'm no angel!
Join Date: May 2005
Location: tampa, fl
Posts: 6,728
I can understand your reluctancy to filing bankruptcy, I would feel the same way.
Where I work, they will not hire anyone who has filed bankruptcy in the last 7 years, and, we will not rent to anyone who has filed bankruptcy, had an eviction or a forclosure in the last 3years, so, it is becomming even more difficult to even rent an apartment.
Since you are not upside down on your mortgage, I sure would not consider forclosure.
Maybe there are more ways to cut your expenses, like no cable, eating out and ?...don't know, just some food for thought.
Where I work, they will not hire anyone who has filed bankruptcy in the last 7 years, and, we will not rent to anyone who has filed bankruptcy, had an eviction or a forclosure in the last 3years, so, it is becomming even more difficult to even rent an apartment.
Since you are not upside down on your mortgage, I sure would not consider forclosure.
Maybe there are more ways to cut your expenses, like no cable, eating out and ?...don't know, just some food for thought.
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Originally Posted by dollydo
Maybe there are more ways to cut your expenses, like no cable, eating out and ?...don't know, just some food for thought.
But, I can see now more reasons (other than my own pride & sense of obligation) to not do it - so thank you all. I'll still find out more about it, but for now it seems prudent to do what we can now, repair our credit as much as possible and maybe refi in a couple years. If we sold/foreclosed/filed now, we'd likely not be able to buy again for a long time, if ever, here in California.
Belgian Sheepdog Adictee
Join Date: Apr 2004
Location: In Today
Posts: 6,101
I have known A's that at a year to 2 years have filed bankruptcy and I just could not do it. I felt I had made these debts and I had to clear them up.
When I found recovery I was over $100,000 in debt. Like Cynical I worked my butt off. First I contacted those I owed, told them the truth, and made NEW payment arrangements with them, and in some instances they actually, lowered or stopped the interest and every month I paid what I said I would.
It took me almost 10 years, but I cleaned everything up, paid everything off. And, while doing this, actually bought a house in California on Land Contract, (owner carried the paperwork, and actually reported to the Credit Companies my perfect record).
Within 3 years of recovery my credit was looking better.
With all that being said, there is a BUT ........................... with our economy the way it is today, and the 'busted housing bubble' many who thought they had equity in their homes, now actually owe more than their house is worth and are looking into bankruptcy.
I agree that you need to talk to several attorneys that do bankruptcy and get that free consultation to better inform yourself before a final decision is made.
Is there any way that the HELOC payment might be 'lowered' for a period of time, by discussing your situation with those that hold the paperm, which would show you are still paying, but would help in getting your head above water?
J M H O
Love and hugs,
When I found recovery I was over $100,000 in debt. Like Cynical I worked my butt off. First I contacted those I owed, told them the truth, and made NEW payment arrangements with them, and in some instances they actually, lowered or stopped the interest and every month I paid what I said I would.
It took me almost 10 years, but I cleaned everything up, paid everything off. And, while doing this, actually bought a house in California on Land Contract, (owner carried the paperwork, and actually reported to the Credit Companies my perfect record).
Within 3 years of recovery my credit was looking better.
With all that being said, there is a BUT ........................... with our economy the way it is today, and the 'busted housing bubble' many who thought they had equity in their homes, now actually owe more than their house is worth and are looking into bankruptcy.
I agree that you need to talk to several attorneys that do bankruptcy and get that free consultation to better inform yourself before a final decision is made.
Is there any way that the HELOC payment might be 'lowered' for a period of time, by discussing your situation with those that hold the paperm, which would show you are still paying, but would help in getting your head above water?
J M H O
Love and hugs,
Member
Join Date: Feb 2008
Location: Chicago area
Posts: 4,269
Originally Posted by itisatruth
Our mortgage is close to or lower than rents in the area and we are not "upside down" meaning, the equity we have is more than what we owe, even including the HELOC. Thanks for your input, I see than I need to learn lots more before I can even seriously consider it.
Thank you!
Thank you!
If you indeed have equity in your home ( as opposed to believing your house is worth more than you owe) it makes no absolutely no sense to consider foreclosure/bankruptcy. Sell your home and pay off the mortgage, preserve your credit and move on.
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