93195 t1_j2dqxj1 wrote on December 31, 2022 at 2:35 PM

You can’t pay off debt without money. If you’re at the point where you’re never going to be able to climb out of it, it may be time to consult a bankruptcy attorney, but bankruptcy isn’t a decision to make lightly.

why-rooftop OP t1_j2dthhl wrote on December 31, 2022 at 2:55 PM

How does that process work? My credit is already bad from missing some payments and a high percent of credit used.

Also, would we have to give up our house if we do file?

GlowGreen1835 t1_j2dv8kz wrote on December 31, 2022 at 3:09 PM

Bankruptcy is designed to keep you homed and employed, so you would almost certainly get to keep your home, and if you use your car to commute probably that as well. I can't be certain because I don't know enough about your specific situation and I'm no bankruptcy lawyer, just letting you know it's definitely worth talking to one about.

Your credit would be hit hard, but does it matter? Credit only matters if you intend to apply for more loans or credit cards, which are probably a good idea to stay away from till you get back on your feet regardless.

why-rooftop OP t1_j2dyeda wrote on December 31, 2022 at 3:32 PM

I may reach out to a bankruptcy lawyer to get advice. I have been thinking about it for about a month now but that is a really big step to take and scares me to be honest.

CafecitoHippo t1_j2fea6o wrote on December 31, 2022 at 9:35 PM

I can shed some light on going through it. I was in an almost exact same situation. My wife lost her job about a year after we bought our house due to medical issues and went from 2 incomes down to my one which at that time was about $55k. We missed a bunch of mortgage payments and went into foreclosure. I was the only one on the loan/deed and ended up declaring bankruptcy. I'm in year 5 of it right now and almost done with trustee payments. It's not been great but it was a necessary evil. We're current on everything these days and I look forward to not having to pay the bankruptcy trustee. Luckily my wife didn't need to be in the case with me and for any debts, my mom has been willing to cosign so we aren't fucked on interest rates and I work for a credit union in commercial lending.

If you have a good network around you, it can help lessen the negative side effects. It doesn't get you out of them all together though. I was terrified going into it but if it's what you need to do to keep a roof over your head, it can be beneficial. Talking to an attorney that helped walk me through the options went a long way towards my peace of mind so I would recommend doing that. They have no emotional interest in it and will look at the facts and tell you what your best route is. I wish you the best and have been in your shoes. It's not fun but you WILL get through it. Feel free to shoot me any questions you have as well and I'll answer them as best I can.

Edit: Also to answer your question, you do not have to give up the house to file bankruptcy. Our mortgage was sold to another servicer and we pay our normal mortgage and we pay $325 a month to the bankruptcy trustee that goes towards the arrears that we owed from not paying when we couldn't.