Should we file for Chapter 7?

[TOWLAM]

My husband and I are 59 and 71. His only income is S.S. of $1550 and my disability $1450 (total permanent). His prospects of finding employment is not good. We have been living off our IRA's basically to pay bills the past several years.

$55K in credit card debt
We own a home worth $700 - we owe $340K with a 2nd on it (used to pay of bills and live off of) $100K.
We have a second home worth $284 - we owe $214 (the value has depreciated sustantially in the last two years). We purchased it for $365K.

We don't know what to do? Our IRA has schrinked to $40K.

Any information or advice is appreciated. Thanks.

[nc73]

You could but they'd probably sell your home and use the proceeds to pay the creditors...Why not just sell the second home?? You can't keep both and do a chapter 7. What you should really do is move into the cheaper home and sell the other.

[SMinGA]

I don't like answering 'should we file' questions with a clear yes or no, since there is no way I can truly be in your shoes. But if the question were rephrased to 'should we consider all options, with bankruptcy as an option' I would say yes. There is so much more than goes into actually deciding to file, but reviewing all options is reasonable I think.

Which home are you living in? What is your intent regarding the other home? Would getting rid of credit cards & unsecured debt payments allow you to manage basic living expenses?

If you have $260k equity in one home, why not sell that one and use the funds to pay off your debt and have more to live with? Perhaps even paying down considerably the $214k balance if you can live in that home.

[avmarathe3]

What are your monthly living expenses and do you have positive cash flow from second home and how much your monthly minimum CC payments are. From your statements I take it that you have equity in both homes. If this is the situation your case becomes an Assets case, therefore CH.7 may be converted to CH. 13 which means you will be paying for 3-5 years through a payment plan. Lets discuss this further.

[momofthree]

If you have $260k equity in one home, why not sell that one and use the funds to pay off your debt and have more to live with? Perhaps even paying down considerably the $214k balance if you can live in that home.

*nodding in agreement*