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JoeLawyer, Attorney
Category: Bankruptcy Law
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Experience:  Attorney in the practice of Bankruptcy Law since 1996
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I have an ARM on a home in Bakersfield that was

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I have an ARM on a home in Bakersfield that was financed on a negative amortization plan with an attached $30-K equity second that matures in 5 years. Due to unemployment, I also have about $60K in credit card debt. My wife and I are on social security. I have a min. wage job that is not going to afford any relevant increase in income. With current economic picture, I am going backwards. I have filed but not paid any taxes in 6 years. My wife''s health is suffering from stress. I had a heart attack in 2006. Nothing is helping. We haven''t a hope in hades of being able to pay off the second and the neg. amortization on time. We have worked very hard to get and keep a credit score of 685 and I hate to loose it after such effort. The bucket is going empty fast, and no one seems to realize how much worse the economy is going to get very soon. We have old property, not worth much, and no savings or investments.

What to do?

Thanks and regards,

Barry Morris


I am sorry to hear that. It sounds like you may not have a lot of options since your income is insufficient to carry your debt load and the income is unlikely to increase. However, I can only give you information, not advice, since it is illegal for an attorney to give advice to someone who resides in a state in which the attorney is not licensed to practice law (and a host of other rules of professional responsibility I won't bore you with).

So, I cannot answer "What to do?", but I can tell you some thoughts. First, generally speaking if one's income is insufficient to carry his or her debt load and will not increase soon, something has to happen: the person either has to find a way to pay the debts, consolidate them in a credit counseling program (not effective for secured debts like mortgages though), settle the debts (again only effective for unsecured debt, and only if the person has settlement funds on hand), file bankruptcy, or let the creditors foreclosure/sue and then deal with the lawsuits as they arise. There are of course other options and hybrid options, but those are the basics. Some people choose to simply walk away and let the creditors foreclose and sue if the person is "judgment proof," meaning their only source of income is not garnishable (such as social security) and they have no assets that can be seized to satisfy a judgment (such as real estate). Other people choose bankruptcy, and then either file Chapter 7 and start over, or file Chapter 13 and try to keep their assets to the extent possible.

Making the determination of whether to file bankruptcy, and if so, which Chapter, is something that only an attorney in your jurisdiction can do after a consultation. I am a bankruptcy attorney and I spend a considerable amount of time meeting with clients, reviewing documents, etc. before rendering such advice, so this is not really something that can be done online since (1) I do not have access to enough information, and (2) even if I did, I cannot give advice online (as mentioned above).

However, I would be happy to provide you with any information I have about any of the options I mentioned or try to expound on any other follow up questions you have.


LEGAL NOTICE: I am only licensed to practice law in certain state(s) and I cannot give legal advice to someone who does not reside in a state in which I am licensed, nor shall anything I say in the above answer or elsewhere on this site be deemed legal advice, even to someone who resides in a state in which I am licensed. Fees I receive for answering questions are paid for information, not for legal advice. This forum is designed to provide general information only, and information herein is not warranted to be correct or applicable in any way since laws may have been misinterpreted herein, since laws change from time to time, and since the impact of those laws on any particular situation varies. The information presented in this site shall not be construed to be formal legal advice nor the formation of an attorney-client relationship. Persons accessing this response are encouraged to seek independent legal counsel in their jurisdiction for guidance regarding their individual circumstances. Do not take any action or inaction based on information presented herein since it is informational and may not be accurate or applicable to you; it merely attempts to give you a basis of knowledge to help you formulate questions to ask a legal or other professional in a face-to-face meeting in your jurisdiction. Joseph Ross does not hold himself out to be a specialist or expert in any area, regardless of assertions made by any third party, and any implication of being an expert or specialist herein is made in error. I hope the information presented above is useful to you. Answer above is (c) Joseph Ross. All rights reserved.

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