Sale of property due to credit card debt and home mortgage

Guest

I've got about $30,000 in credit card debt after getting laid off from work and paying medical bills for a newborn. I have had a talk with credit counselors, but the payments are far beyond my ability to repay the debt. is there any other option than bankruptcy? I also have a home mortgage and I am paying for it. can the other creditors force me to sell my property?

Niicss · Posted: Sun Oct 23, 2005 7:46 am Post subject: RE:

Hi Henry,

It's sad, but you have to find a way out.

See if your credit score is good then filling a bankruptcy will going to put lots of bad impact on your credit score but if the credit score is already poor then filling bankruptcy is the best option for you.

See personally I do not recommend anybody to go for bankruptcy as getting out from its effect is bit tough for me but see if there is a will then there is a way out.

1st you should talk to your credit card company and try to explain them your financial situation, see if you can convince them to have smaller monthly payments. This will allow you to have some time to see for others option. In between if you get a good job that you will I am sure then you can easily bear this credit card cost.

The bottom line is talk to your credit card company and lender, they will understand your problem and I can see you coming out of all your problems in a big way.

One more suggestion you can also combine the two loans into one to have smaller payments.

I will definitely like to see you grow.

Niicss

Guest

Henry,

Yes what niicss has said is correct, if there is no option left then bankruptcy is the last option but before we should try all various options to the problem.

See sometimes talking can help to solve many problems. Talk to your lender and credit card company and see if something can be done.

Thanks

Jessica · Posted: Sun Oct 23, 2005 8:59 am Post subject: Re:

Hi djhenry,

I really feel sorry for you. You are indeed going through severe crisis. But anyway don't lose heart, as there are ways to overcome such situation.

What Niicss and jim23_rem have said are absolutely correct. I would suggest that you contact your creditors and see if they can allow you for some flexibility in making the payments. Do not go for bankruptcy first as it creates a negative impact on your credit report.

Another option is to take out a home equity loan and use the proceeds to pay off your debts. This will be cheaper as the interest rate on a home equity loan is likely to be lesser than what you need to pay for your credit card debts. Moreover, the interest may be tax deductible, although it depends on what the Tax Reform Panel in the US is about to decide on the mortgage interest deduction.

Whether the other creditors can sell your property depends on the laws of the state where you have taken your mortgage loan. There are many states that do not allow such creditors to sell a debtor's home. Only the mortgage company and the taxing authorities can force the sale of your property. So depending on the state laws you may not lose your property as long as you keep on making timely payments on your mortgage and home equity loan payments, pay your income and property taxes, as well as pay for any home repairs.

Hope that you will be benefited from this information.

Regards,
Jessica.

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