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Need bankruptcy advice.......

My husband and I are in a bad way and are steering toward bankruptcy, we have contacted a bankruptcy lawyer...we are $50,000 in debt. He hasn't been working as much as usual, hes a contractor. The credit card bills are piling up fast and I work m-f, 9-3, 10 months out of the year. My grandmother (God rest her soul), left me $39,000 in her will. Question is...should I go forward with the bankruptcy and lose the inheritance, ( yes, they will take it) and possibly lose my car which im still paying for..and be debt free but with bad credit for 7 years OR should I not file and when I get the inheritance pay off as much debt as I can with it but still be in debt with a much smaller amount, and keep my car?....advice is needed here. Please and thank you in advance.

Answer Question

Asked by SLC3015 at 6:13 PM on Jun. 12, 2013 in Money & Work

Level 21 (11,047 Credits)
Answers (10)
  • The latter of coarse. use all that money and put it toward the things that have the higher APR. Don't put a little towards each thing pay off a couple things with that, that way you can focus on getting the last $11,000 paid off.
    Have you talked to the credit card companies about coming up with a deal? Some places with make a deal. For example. You owe them $10,000 they may bargain with you to bring it down to lets say $7000 if you pay it all of that amount at once.

    Answer by LostSoul88 at 6:18 PM on Jun. 12, 2013

  • Before you go the bankruptcy route, see what arrangements you can make with your creditors. Many of them will take settlement offers or will work out a repayment plan with you.

    You can also try a credit counseling service for advice on what to do. Look for a non-profit one, such as

    Answer by gdiamante at 6:20 PM on Jun. 12, 2013

  • With that much money at your disposal, you may be able to negotiate with the credit card companies. They'll want the cash and they may knock off some of the interst if they get it all at once.

    Answer by Ballad at 6:27 PM on Jun. 12, 2013

  • You have the option to reaffirm on your car loan - this means you continue making the normal payment and is excluded from the bankruptcy. It is still held to the same terms - late payment can result in repossession, and by reaffirming, they would be allowed to sue you for the balance remaining after selling it at auction. However, if you think you can manage the payment, it's an option that lets you keep your vehicle.

    If you are $50k in debt, you will accrue more interest on all of those debts while you wait on the inheritance, so it sounds like either way you're "losing" it. The advantage of BK is the court and trustee decide how much is paid back. If you do it yourself, you will likely end up paying more, and still ending up in court on at least some, with attorney fees added.

    It mainly comes down to how long until you get that money. If it's not soon, trying to "save" it could do more damage.

    Answer by NotPanicking at 6:31 PM on Jun. 12, 2013

  • negotiate BEFORE paying them off btw

    Answer by LostSoul88 at 6:39 PM on Jun. 12, 2013

  • The lawyer said since one of my credit cards is also the company that gave me the car loan they may want the car too....if I pay off most of the debt I get to know I did it....didn't take the easy way out. That's a much better feeling. But I feel awful knowing my grandmas money is being used for this instead of something I'd like to have, but I have 2 kids and need to think of them.

    Comment by SLC3015 (original poster) at 6:40 PM on Jun. 12, 2013

  • The lawyer said since one of my credit cards is also the company that gave me the car loan they may want the car too....

    That's odd. If they take the car, they take a huge loss unless you have a very low interest rate on your car loan. They're already going to take a loss on the credit card debt. BK judges tend to go low on car loans (this was part of my old job, handling the bankruptcies for a loan company) - we never ever came out even on them. Usually they slashed the interest rate and the value of the vehicle on paper.

    Not saying your lawyer is wrong, it's just not the norm for a car loan.

    Answer by NotPanicking at 6:45 PM on Jun. 12, 2013

  • do you think your grandma would want you without car? Especially with two kids?

    Answer by LostSoul88 at 6:53 PM on Jun. 12, 2013

  • You only put in the bankruptcy that which you do not intend to keep. You can keep the car if you don't include it. Not sure how they would take your inheritance if they don't know about it. Bad credit for seven years is an exaggeration. Most credit can be recovered in as little as three years. Ultimately it is up to you.

    Answer by 2autisticsmom at 8:10 PM on Jun. 12, 2013

  • Not sure how they would take your inheritance if they don't know about it.

    Not revealing any asset is now a criminal offense for both the applicant and their attorney. BK attys used to encourage it, so when they revamped the BK laws about 10 years ago they added a lot of language making them liable for it so they'd stop.

    Answer by NotPanicking at 10:12 AM on Jun. 13, 2013

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