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I've been in debt for awhile now due to a combination of poor money
management and some family expenses that were beyond my control. I'm
in Arizona and have appx. $16,000 worth of unsecured debt...mostly
credit card + appx. $11,000 owed on my car (presently worth
$9500-10,000). Altogether around $27,000 total debt. I pay roughly
$340 a month on my car and have kept up on payments for the 2 years or
so that I've owned it. On the remaining debt I entered a credit
counseling program and pay a lump amount of $450 a month to pay it
down. I've kept that up for the past year that I've participated. I'm
not presently behind on any payments, but have been living paycheck to
paycheck for quite awhile now with no clear end in sight. My credit
score could be worse, but it's not good due to my high debt to income
ratio and a bankruptcy filed 9 years ago.
I would like to avoid another bankruptcy, especially since my
understanding is that my previous one will drop off my record next
year sometime (10 year mark)? On the flip side though next year I'm
going to need to help a family member with some house payments and at
that point I'm concerned I may not keep up at all. Plus of course
living paycheck to paycheck is carrying it's own risks.
Even if I were to declare another bankruptcy I would need to keep my
car and I assume I cannot do so unless I re-affirm that debt? If
that's the case I'd only be discharging around $16K in debt and would
be leaving myself with my car payment and another big ding in my
credit rating. Ideally I'd like to discharge it all and keep the car,
but I assume that's not possible. And if I do let the car go I'd
probably have to turn around and get something used from a used
dealership that I'm guessing would tack on an extremely high interest
rate...and then I risk starting this cycle again. Sorry if this is
pretty confusing, but it's a pretty confusing situation. Any thoughts
or advice would be greatly appreciated.
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In article <f4gf10lks6j22r09r66jra2m4ubnhf0943@4ax.com>, Mr. H
<timantheos@yahoo.com> wrote:
I've been in debt for awhile now due to a combination of poor money
management and some family expenses that were beyond my control. I'm
in Arizona and have appx. $16,000 worth of unsecured debt...mostly
credit card + appx. $11,000 owed on my car (presently worth
$9500-10,000). Altogether around $27,000 total debt. I pay roughly
$340 a month on my car and have kept up on payments for the 2 years or
so that I've owned it.
You really are not that deep in debt, it just seems that way due
to poor money management. The biggest issue is that you have a car
that you cannot afford. If you sell the car, and buy something in
the $1500 range, you will eliminate 40% of your debt in one swoop.
That will free up another $340 a month to pay off credit cards.
If you take the $340 from the car and the $450 that you are paying
to the credit agency, that gives your $790 a month to pay off
debts. That $16K will be paid off in under 2 years at that rate.
I would like to avoid another bankruptcy, especially since my
understanding is that my previous one will drop off my record next
year sometime (10 year mark)?
Actually, bankruptcy stays with your forever. It is a court
judgement. It might drop off of some credit reports after 10 years,
but credit granting agencies still can ask you (and do ask) if you
have EVER filed for bankruptcy, and they can use that information
in the credit decision.
On the flip side though next year I'm
going to need to help a family member with some house payments and at
that point I'm concerned I may not keep up at all.
You also cannot afford to do this. If your family member cannot
keep up with their house payments, that is a big red flag that
says that they have too much house. It would be far better to
help them get their house ready to sell, and help them move into
a more affordable house. That might be a harder message to deliver,
but it is far easier than you both destroying your future yet again.
Even if I were to declare another bankruptcy I would need to keep my
car and I assume I cannot do so unless I re-affirm that debt?
Again, the car is your key problem. Fix that, and you don't need to
do a 2nd bankruptcy. Bankruptcy is a tool that you use to solve a
problem. In your case, your problem is that you spend too much for
your level of income. Bankruptcy is not going to solve that. All
it will do is put off the cashflow problem until the next time your
excessive spending gets you into debt problem. You need to solve the
spending problem. If you do that, everything else will fall into place.
BTW, a 2nd bankruptcy is going to be like dropping a nuclear bomb
on your credit report.
-john-
--
====================================================================
John A. Weeks III 952-432-2708 john@johnweeks.com
Newave Communications http://www.johnweeks.com
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Subject: Need Advice - Considering Chapter 7
From: timantheos@yahoo.com (Mr. H)
Date: 1/28/2004 6:02 AM Pacific Standard Time
Message-id: <f4gf10lks6j22r09r66jra2m4ubnhf0943@4ax.com>
I've been in debt for awhile now due to a combination of poor money
management and some family expenses that were beyond my control. I'm
in Arizona and have appx. $16,000 worth of unsecured debt...mostly
credit card + appx. $11,000 owed on my car (presently worth
$9500-10,000). Altogether around $27,000 total debt. I pay roughly
$340 a month on my car and have kept up on payments for the 2 years or
so that I've owned it.
I am not here to advise you as to whether you should file for bankruptcy or
not. In Arizona, you can use either the state or federal exemptions.
According to the federal exemptions, you can keep a motor vehicle with $2,400.
equity. The state motor vehicle exemption looks rather odd.
It says you can keep a car with "$1,500-$4,000--if disabled". I suggest you
consult a bankruptcy attorney. Personally, I doubt that you are going to be
able to keep your car, a secured debt, while still owing $11,000. on it. They
will repo.
Disclaimer: I am not an attorney. This is for discussion purposes only and
should not be construed as legal advice. For legal advice, it is best to
consult an attorney.
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