Advice Please!

[JohnCampbell]

Hello all, I have researched a bit on this forum as well as others. Lots of good information, but have a few questions and would like opinions. I am in NV.

It all started out with a huge drop of income. I am in sales, and for almost a year, my income has progressively gotten worse, to now which is about 75% less than what I made a year ago. This is the reason things have gotten bad.

The house is at least 150k+ upside down and has already started the foreclosure process with me receiving the NOD 5/15/09....so the house should sell about 3mo after that. I do not want to save the house. I will rent the next home under someone else's name.

I have 2 car loans that were recently purchased (1yr ago and about 7mo ago) so both cars will be upside down as well. I do not believe I want to save either car. I have no problem buying/driving cheap cars again.

My wife has student loans, both federal and private, to a total of about 50-60k I believe. I understand that the federal portions cannot be included in the BK correct? Hopefully we can write off the "private" student loans. How do we go by "repaying" the federal loans?

I do not have a ton of CC debt, about 5-6k. Yes, I know it probably is not a good idea to BK with such "little" debt, but if I am including the house and cars, I tend to not think of that part of it so much.



I know I would qualify for ch7. But is it worth it?

Should I just foreclose and voluntary surrender both cars, and stay afloat? Not file BK?

Or should I just start fresh and file BK and include everything?

Thank you for your advice.




Cliffnotes :

Will qualify for ch7 but should I?
House is foreclosing
Will probably vol repo both cars
Take down private student loans?
How do federal student loans get repayed?
Only about 5-6k CC debt
Any advice or opinions?

[biotechsolution]

your private school loans won't be discharged either. new 2005 bankruptcy laws make any school loan non-dischargeable

[tkharvey]

I don't know that I"d file BK over 5-6 K in cc debt. You'll still have student loan debt anyway. If you are letting the house and cars go, you may not want to file bk but that's just my opinion. We have over 100K in cc debt so it is well worth it to us (my husband too, was in sales, now making 75 percent less than he was used to making so I know how you feel). We just voluntary gave back one of our cars.....the bank wanted us to sign something saying that we would repay the deficiency of whatever was left when it was sold. Now I do know that bk wipes out that obligation, so that might be something you should consider, too. Good luck whatever you decide.

[OregonMom]

My parents were told that they needed to file bankruptcy to walk away from their foreclosed home free and clear. If they didn't they would possibly be responsible for the difference that the bank couldn't sell if for at auction or some other issues that might come up with taxes and such.

[JohnCampbell]

That is what I am worried about. In NV, we can possibly be sued for the difference, same thing with both cars. It would be stupid for me to pay a portion of 150k+ for a house I don't live in, or 5-10k+ for two cars I wouldn't own anymore.

So yes, I know 5-6k of CC debt is not much compared to most people, but its the 150-175k from the cars and house that I am more worried about.

[JohnCampbell]

Any other ideas or insight?

[dingdong]

What about a loan mod for the house? Check out www.loansafe.org

You could probably get the CC to settle for 20% maybe less.


Check out the William Ford Consolidation loan program with the Income COntingent Repayment Plan to lower the SL payment.

See if you can get a hardship forebearance on the private SL until your income improves.

Might get you out of the weeds for a bit until your income is better.

The cars, don't really know.

BK will definitely wipe out any deficiencies with the cars and the house and discharge the CC debt.

The SL are with ya though, I have a crap load too, so I understand the frustration.

[cwilliams]

I also have private student loans and was told I could get a forbearance for a total of one year, six months at a time. After that one year I had to start making payments. They do have an option, though, of paying 1/2 the payment for a while and then slowly going up to the full payment. I am almost done with my first 6 month forbearance and I plan to ask for one more. By then we should be settled down and ready to start paying them back. Hopefully if you let your house and cars go then you will be able to afford the student loan payments after that.

[car67]

same boat here 75 percent drop in sales versus last year
i am in a 13 seeing attorney this week to switch to 7

u dont want the house or car i understand your view
buy cheap rebuild....... heck yea i would file 7
and this cleans up all liabilities you deserve a fresh start

[aces67]

If you don't file BK and let your cars and home go back they can and may sue you and get a judgement against you for the deficiency. My lawyer said that judgement will follow you for YEARS to come.