SavingsTalk.com

$_get_money · 10-31-2007, 02:07 PM

My daughter bought a house with her fiance in 05' (in California) they have a first and a second. The second is fixed but the first is a variable and the interest rate is doubling. They put no money down and the first was an interest only loan, therefore there is no equity and the house has declined significantly in value due to the market. Also, she has $15,000 in credit card debt. I am thinking they just might be better off if she files for bankruptcy at this point (yes she has learned her lesson) and perhaps in the future they can purchase another home maybe even sooner since he has pretty good credit, housing prices are a lot lower and he could qualify for a loan.<br />

chicago_bull · 10-31-2007, 02:07 PM

consult with a bankruptcy lawyer because the laws have
changed.

BOB+ · 10-31-2007, 02:07 PM

A short sale / deed in lieu of foreclosure on the house should be less damaging to the credit score .

For the CC debt , she should get a 2nd job waiting tables , make big tips that all goes to the CC debt .
Otherwise , you may find her getting dumb with CC again , Getting all that merchandise free by bailing out sends a bad bad message .
Spending junkies will just do it again .

>

einstein · 10-31-2007, 02:07 PM

It sounds like a no-brainer but I'd concur with the first guy, there are bankruptcy trustees out there who can advise you much better than we can.

And once it is all sorted they should engage a Financial advisor to come up with a plan. Really they were mis-sold the variable mortgage if there was no plan to raise income to a level within 2 years to start to pay down principal. That should have been something that a trainee Dr would undertake in the last year or two of studies, knowing that they would get a huge rise upon qualifying.

I hope that they have learned their lesson and I'm sorry that it's been so hard on them.

BigInvestor · 10-31-2007, 02:07 PM

Just make sure she gets a bankruptcy attorney....lots of the laws have changed....I just knew a couple that filed and the lawyer
filed the wrong type....note: he was not a bankrupty attorney.

DDT · 10-31-2007, 02:07 PM

No.

10-31-2007, 02:07 PM	#1
$_get_money Greenhorn Join Date: Jul 2006 Posts: 12 Rep Power: 0	Would you file for bankruptcy if this were your situation? My daughter bought a house with her fiance in 05' (in California) they have a first and a second. The second is fixed but the first is a variable and the interest rate is doubling. They put no money down and the first was an interest only loan, therefore there is no equity and the house has declined significantly in value due to the market. Also, she has $15,000 in credit card debt. I am thinking they just might be better off if she files for bankruptcy at this point (yes she has learned her lesson) and perhaps in the future they can purchase another home maybe even sooner since he has pretty good credit, housing prices are a lot lower and he could qualify for a loan.<br />

10-31-2007, 02:07 PM	#2
chicago_bull Piggy Bank Join Date: Jul 2006 Posts: 60 Rep Power: 6	Would you file for bankruptcy if this were your situation? consult with a bankruptcy lawyer because the laws have changed.

10-31-2007, 02:07 PM	#3
BOB+ Piggy Bank Join Date: Jul 2006 Posts: 96 Rep Power: 6	Would you file for bankruptcy if this were your situation? A short sale / deed in lieu of foreclosure on the house should be less damaging to the credit score . For the CC debt , she should get a 2nd job waiting tables , make big tips that all goes to the CC debt . Otherwise , you may find her getting dumb with CC again , Getting all that merchandise free by bailing out sends a bad bad message . Spending junkies will just do it again . >

10-31-2007, 02:07 PM	#4
einstein Greenhorn Join Date: Oct 2007 Posts: 13 Rep Power: 0	Would you file for bankruptcy if this were your situation? It sounds like a no-brainer but I'd concur with the first guy, there are bankruptcy trustees out there who can advise you much better than we can. And once it is all sorted they should engage a Financial advisor to come up with a plan. Really they were mis-sold the variable mortgage if there was no plan to raise income to a level within 2 years to start to pay down principal. That should have been something that a trainee Dr would undertake in the last year or two of studies, knowing that they would get a huge rise upon qualifying. I hope that they have learned their lesson and I'm sorry that it's been so hard on them.

10-31-2007, 02:07 PM	#5
BigInvestor Greenhorn Join Date: Jul 2006 Posts: 15 Rep Power: 0	Would you file for bankruptcy if this were your situation? Just make sure she gets a bankruptcy attorney....lots of the laws have changed....I just knew a couple that filed and the lawyer filed the wrong type....note: he was not a bankrupty attorney.

10-31-2007, 02:07 PM	#6
DDT Greenhorn Join Date: Jul 2006 Posts: 15 Rep Power: 0	Would you file for bankruptcy if this were your situation? No.

SavingsTalk.com

Your guide to saving money and making smart investments!