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)
Husband is college student too. Together our income is still VERY tight on making all payments on time.
Yes we have cell phone – but no cable/internet/home phones. I don’t know what else to cut. 
Unless you can bring in income, you have no choice but to cut expenses. It sounds like both of you have an unhealthy relationship with money. At a time when you should be full-time wage earners, you are both students.. That is NO way to live. You either need to strecth out grad school so you can work more hours, or one of you needs to go work PERIOD…
September 2nd, 2010 at 4:36 pmtime to downsize and save the house and keep your credit from slipping any more — sat down with your hubby and tell him this is how it is going to be — no more cell phone interent cable tv and any other expense you can do with out — i mean cut to the chase — you are in for a fight and i know you two can win this battle — if hubby is not in school –full time insist he get a part time job –i have faith in you!!!
September 2nd, 2010 at 4:36 pmIt seems there is no way to save Your house unless one of You starts immediately a job with at least US-$ 2000,- monthly net income. Better to get a flat on rent and sell it somebody with better income. Sell it before the bank takes it away from You with a court order!
September 2nd, 2010 at 4:36 pmDo whatever it takes to keep your home. If that means a Chapter 7, then do it. Your home should be your priority. Downsize your expenses wherever you can: get rid of the cell phone or land line(your choice), get a pair of rabbit ears for television, shop at discount stores such as Food 4 Less, use the car for important errands and try to do them all in one day if possible to cut down gas usage, and get rid of your credit cards. Chapter 7 will usually allow you to cut loose credit debt and other debts but allow you to keep your home.
It happens to a lot of people and does not necessarily reflect poor spending habits, even though there may be a stigma attached to a BK.
KEEP YOUR HOME!!!!!!!
September 2nd, 2010 at 4:36 pmI know you are in a rough time so… here goes.
September 2nd, 2010 at 4:36 pmFirstly you’d better check this out. When I sent my son to college (out of state), my ex hubby called me and told me, he couldn’t help me because he had filed for bankruptcy he could not get a Federally granted loan to help me…I was on my own.AGAIN….
So, if it’s true (I have never trusted my ex.husband since he cheated on me) but it makes since. If you file BK you may not be allowed to get another Student Loan to continue your education.
I would catch up on your Mortgage now.
You and your husband need to decide, "Who has to stop college for now" and go to work full time till you two are caught up. I know both careers are just as important, but you both may be out of college if you file BK. anyway.
I do not know "where you live, ie, state", but the housing market is TERRIBLE for sellers in my area, Wash.DC.
Can you rent a room out? If you were to get anywhere from $300- 500.00 per month for renting out, that would help right?
If you can’t rent out, reconsider catching up on your mortgage, one of you get a full time job and the other get a part time job, then put your home on the market and get it sold.
Even though the market is not best shape now, homes are selling faster in certain areas.
Better to keep your credit clean if you both want to graduate from college, I know you both have already "compromised by not having a home phone and cable", so now it’s time to "work hard at saving the marriage" by talking this out and being realistic.
Good luck to you both…