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Hi, I just recently went through a divorce. I got stuck paying the credit cards totaling about $33,000. On top of that $2000 in child and Spousal support. Two months after the divorce I was laid off I was able to handle my obligations until now, I am collecting unemployment which is $365 a week. with the job market being the way it is I can't find a job that pays well enough. I am really struggling, my ex got the house in order for her not to touch my 401k which is now $52000. My name is still on the mortgage and she uses the support money to pay. I did sign the deed over to her but it doesn't erase my name. All I owe are the credit cards. I have a 98 Mustang that is worth about $6000 owe nothing on that. A few stocks not worth more that $3000. I am about to fall behind on my child and spousal payments. Any help would be appreciated.

jameshogg · Posted: Thu Jan 01, 2009 9:20 pm Post subject:

Hi Rush,

You have mentioned that your ex has got the property but your name is still on the mortgage docs. Didn't she refinance the mortgage in her name?

As far as credit card debts are concerned, you do not need to file a bankruptcy for them. You can check out the options of debt consolidation or debt settlement. In a debt settlement, your payments will be reduced by 40%-60% depending on your situation. If you go for a debt consolidation, your interest rates will be reduced. You can contact any debt consolidation company and check out the options with them. I know of a debt consolidation community - "debtconsolidationcare.com". You can visit their website and contact their financial coach. The financial coach will judge your situation and assist you in taking the right steps.

Though you file bankruptcy, you will not be discharged from the liabilities of paying for the child support. However, declaring bankruptcy may put a temporary stay on child support. But remember that this will only be a temporary stay. AS far as spousal payments are concerned, I think you should speak to your spouse and inform her about your situation. May be he/she will understand your condition and you can come to an agreement related to payments.

Thanks

Samantha · Posted: Fri Jan 02, 2009 5:58 am Post subject:

Hi Rush,

Welcome to the forum.

I'd like to ask if at all you're comfortable making a monthly payment on your credit cards? If yes, only then you should go for a debt consolidation. However, if you'd like to reduce the outstanding debt balance, then settlement would be the right option for you. It depends on how much you can afford to pay. For that, you'll have to calculate the total debt amount.

You aren't receiving much through the unemployment benefits. It won't be enough to help you pay your debts. Have a looked out for a part time job? Even that can help you at this moment.

I don't think you should file bankruptcy. If you file chapter 7, there's the risk of losing your home, though there are exemptions. And, if you file chapter 13, you still need to make a monthly payment. Again everything comes to one question - will you be able to afford any payment with what you're receiving right now?

May god bless you.

Samantha

Guest

Hi Rush, my husband sort of went through the same thing in regards to child support. If you are unemployed, you may request the court to modify your payments until your situation is better. filing bankruptcy doesn't relieve you from your obligation but it does prevent garnishment of your unemployment benefits (automatic stay). The Chapter 13 if you wanted to, the credit cards would be paid only a percentage of what you owe and the rest is discharged after your payment plan. $33,000 in credit card debt would be cut down considerably and may be worth looking into as opposed to debt consolidation. Debt consolidation brings your accounts up to current status and a percentage is paid to them and the consolidators collect a fee. I was in this program and the interest rates were not cut down as they speak and there is some information on the web about how it works.

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Chapter7 or 13