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?
First off–how did you get the money to buy it in the first place? If you’re paying with studen loans, you could be brought to court. Most student loans come with an agreement that the monies will only be used for STUDENT LOANS.
It sounds like what you need is a dose of reality. Reinstate your mortgage–if you’re going to just fall back into the non-payment category, then you need to sell that house and get out of it.
Bankruptcy isn’t the solution everyone thinks it is. It will ruin your credit for 7 years and make it nearly impossible to get a loan for ANYTHING in the future.
If you can’t afford a house, then you shouldn’t be a home owner at this time. Sell the cars, sell what you can, and pray that you don’t get caught using student loans for mortgage.
August 26th, 2010 at 11:50 amif you want to keep home, pay that up,
August 26th, 2010 at 11:50 amif you want less debt from credit card or other crappy debts, I suggest find a good relief company that would help you reduce you debt up to half or something or zero interest rate ..
ur only 25 I don’t think you want a foreclosure or a bankruptcy messing up ur credit report for the next 10 years. this one is tough ’cause ur already robbin’ Peter to pay Paul.
try to find a higher paying job or do something to boost your income so ur not so broke that ur living off ramen noodles and can’t pay the light bill. don’t know if you’ve done this yet, but check on the internet for grants to help with school expenses.
August 26th, 2010 at 11:50 amYour situation is far too complicated to cover here.
I’m very concerned with your student loan liability. That is not dischargable through bankruptcy.
I don’t know how much you and hubby earn. I doubt you earn more then $45k so you may qualify for a chapter 7, but that would depend on the equity in your home and other property.
You could do a BK7 but I’m going to bet you will be in hard times a few years down the road again.
August 26th, 2010 at 11:50 amI believe the answer you’re looking for can be found on this site. They’ve got lots of info about the subject.
August 26th, 2010 at 11:50 amYou might be killing flies with a hammer declaring bankruptcy. Contact a Consumer credit Counseling service. Go through 4 of them and see what they can do first…
August 26th, 2010 at 11:50 amLook, here it is… you are young enough that you do have time to re-build your credit if you file BK. Although you can’t file on student loans, they will be there forever. What they will do is take your tax return to apply towards to monies owed.
August 26th, 2010 at 11:50 amIf you think you will qualify to file BK under the new laws then hey you know your situation, so just do it.
You should not have to pay more than 2000$ to file. Plus these days so many Americans are in financial debt they file BK, it’s not hard to get a home loan or a car loan if you file. You have to wait 2 years to get a home loan, but there are alot of Credit card companies that will give you a card right after BK…. plus you will be able to get a car loan right away. Yes your interest will be high, but oh well you have to do what you need in order to re-build. I even know of a finance company that will give you a car loan even before your BK is discharged. You will have the BK on your credit for 7-10 years… but after 7 years you can write the credit bureau to remove it. Today BK is WAYYY more accepted then it was 10-15 years ago. So again you know your situation, you know what is best…. but you also have to take a credit counseling class and they will try to have you do a consolidation loan and that’s NOT the best way to go, cause you will put all your debt in that loan, and it will open up your cards again, and then next thing you know, you have everything maxed out again. Good luck to you!! I’ve been there!
PS… if this goes to your in box, you can email me back and I can give you the name of the company that will give you an auto loan with your BK still open. again your intrest will be high, but it a way to start. If you can’t reply through email, here is my email addy cookiemom74@yahoo.com