To Pay or Not to Pay? Reinstate mortgage or File Chapter 7 or 13?
I am 25, married, and own a small home. Due to very slow payment (I pay mortgage with student loan monies when they arrive), my house is going into foreclosure. I also have a lot of debt from medical expenses, and hubby has major debt (car, credit cards) from his teen years.
I have enough money to reinstate my mortgage without filing some type of bankruptcy. However, that would leave me with no lump sum of safety money. I do work, so I could feed myself – but I never seem to have enough income to pay for regular expenses AND my mortgage. So, if I don’t file bankruptcy and I catch up/reinstate my mortgage…I know I’m going to fall right back into the "non-payment" category again.
Is catching up my mortgage better than filing bankruptcy? What about the other debts that I have? How is credit affected?
(I’m going to grad school, so I have many years of being a poor college student left. I just need to know what I should do about my house and other bills in collections)
SideNote to a response on student loans: Student Loan money can be used for any of the following reasons, not limited to: tuition, educational supplies, food, housing, clothing, misc. necessities / personal items, technology purchases (hardware & software), etc. My lenders are VERY aware of the fact that I am investing in my future by paying for current expenses with loans. Hence, the reason that most lenders always mention "housing or room & board expenses" and are very inclusive on those types of expenses.
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Forget to add: Hubby is also college student (not a bum in case you’re wondering).
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Again, mostly just wanting to find out which Bankruptcy would be beneficial considering my other debt.
If I pay up the mortgage/reinstate – how long will it take of on-time payments to have good standing / good credit again?