questions about bankruptcy in north carolina

[wednesday]

Have some questions about our situation. We are in North Carolina and owe approximately $48K in credit card debt and medical bills. My husband was laid off from his job right after our son was born two years ago. He was never able to land another job but he has built up a business that brings in some money. With my salary we are around $40K/year. We've exhausted savings, etc. and realized we simply can not continue paying. We also had medical bills and the joy of 29% interest to make things more complicated. So we realize bankruptcy is our only option at this point and for obvious reasons Chapter 7 looks preferable to Chapter 13. The one issue is we have about $23K in equity in our home, and North Carolina's exemption is only $10K per person. Husband was told by lawyer friend that because all of our debt is in separate names, but house is titled jointly, our house is protected despite our being above the 20K exemption amount. The explanation was that my creditors can not go after my husband's equity in the house, while his creditors can not go after MY equity? Is that right? I guess we are lucky then that we never applied for credit on anything together. It just never occurred to us. Even our mortgage is in my name only because we could get a better interest rate that way.

My other question is about student loans. I understand it is rare to have them discharged. How rare are we talking about? Husband has about 48K in student loans from a graduate degree that sadly has so far done NOTHING to increase his employment or earning potential. Just wondering if there is any hope at all in that area. My own student loans are around $24K, just for undergraduate. Our monthly payment on just our student loans is over $500, and that is with stretching them out over 20 years...it really makes it hard to make ends meet.

[herekitty]

Student loans are VERY RARELY discharged. Basically, you'd have to prove that you can't work out of disability.

[wednesday]

Thanks, herekitty!

Anyone know anything about the home equity situation?

[sunshine08]

Where did you get the amount of "equity" value from?

[bezoar]

I'd just make an appointment to see a bankruptcy att'y or 3. If your equity minus exemptions is that small, chances are that costs of selling it (R.E. commissions, inspections, possible repairs, etc.) would eat that up - and probably more. A local att'y could probably tell you whether or not the court in your district would really be interested in taking it.

[wednesday]

Where did you get the amount of "equity" value from?

We bought the home recently for 138K but it appraised for 140K. Our payoff amount is 117,500K. So going by the sale amount we have 20,500 in equity or going by the bank appraisal we have 23,500 in equity.

We were advised to wait 90 days from the date of purchase of the home, which puts our filing date at October 13--so looks like we will squeak in just before the laws change.

[sunshine08]

Have a local realtor give you an appraisal. We went with Remax, paid i think $75 for this. But it was the fair market value and what you could reasonably expect to get if you put it on the market as is where is.

[sunshine08]

We, too filed in NC. That is what our lawyer suggested we do. (we had the best, in our opinion)
Good Luck. Know it seems like it won't be done, but it will and you will be greatly relieved.

[wednesday]

Thanks for the advice. It is actually a relief to be starting this. Just deciding not to pay anymore was a relief. We went to see a financial counselor who told us to stop throwing our money away trying not to default. I know they are not supposed to make recommendations as far as BK but he just about came out and said our only option was default and to go ahead and do it already, and start over fresh.

[sunshine08]

We went the credit counseling route for 2 1/2 years and we hardly saw any headway, even though we were told we would have it paid off in 5 years. Then they wouldn't return any correspondance. So we didn't have much choice, just wish we had done it sooner. Would have saved alot of money and annoying phone calls. The only time our phone rings now is because of family and friends.
again, good luck