Give Up House and Car

[mommyto3+1]

Has anyone done this with a chapter 7?

I am a SAHM of 4 kids.

We plan to file mainly to rid the credit card debt totaling 50K.

The house we owe 266K plus 32K equity line. We pay 1600 plus 300 for the house. The first mortgage is an interest only loan. The equity I have a low interest rate. If we keep the house and car I can have the equity line and car loan paid off within 4 years then work on paying down the mortgage.
The car we owe 27K and I have a 0% interest loan. 512 a month payment.

I wonder if we got rid of both...we the heck would we live??? Our credit would be destroyed so I wouldn't be able to get us into anything good.
And I would have to drive a beater

The taxes in the city I live in are about 7K a year also.

I really don't want to move out of my home since the schools here are really good and to be without a car...
My husband works really long hours so to get by with one car is not an option.

With the economy being what it is, I am scared something may happen to my husbands job (he is self employed, owns his own company) then we would have NO income and at that point what if we already finished everything with the chapter 7. WHat would we do then?

Thoughts??

[AngelinaCatHub]

Wow, you have a mortgage payment and car payment big time. I would dump both and as far as credit, whatever you do, bk will kill your rating for some time. At this time, while deciding, why not see what you could pick up in a lesser house on “Contract for Deed” and a good used car. Even online you could do this. Find out what used cars are worth as well as your current car at Kelly Blue Book kbb.com. If hubby is making enough money to pay for both now, he is making good money. Who knows what the future holds about his business, or anyone’s job. It is a strange time in our World today. ‘Hub

[BassBoy]

Finding a place to live and getting another car after Bk is not as difficult as one may think. If you look through the Buying a Car After BK section of the forum, you'll read that many of our members have been approved for auto loans shortly after discharge. One piece of advice though......shop around and find the best deal.

Renting may or may not be tricky. Some places won't talk to you with a BK and others will require a higher deposit. Private homeowners are good to work with. What you need to do is call around to apatments, condos and private owners and ask the criteria for someone in your position.

With regards to your husbands income after BK........try to make your budget work as if he was on unemployment or you having to work if his income is lost. That way you'll know you could survive and make it through.

Best of luck.
Keep us posted.

[AngelinaCatHub]

Extremely good advice Bassboy. Also, you will get those junk "pre approved" credit cards. PLEASE go cash only, that is a trap that got most of us in this mess. Do not Mortgage tomorrow for junk things you think you need right away. They become valueless but the payments go on and on.

It is easier to get caught in a credit deal, but remember, you cannot bk again for 8 years. It used to me 7 but I think it is 8 now. THEN they can get a Judgement and get whatever you have. BE careful. 'Hub

[mommyto3+1]

Yikes.

Thanks

[Cali]

Great advice BB.