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Ellen, Attorney
Category: Bankruptcy Law
Satisfied Customers: 36714
Experience:  Bankruptcy Lawyer. Experienced.
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I visisted an online debt consilidation co. who suggested bankruptcy,

Resolved Question:

I visisted an online debt consilidation co. who suggested bankruptcy, due to my debt/incime ratio. My current credit score used by the bank is 732. I need both extra money and less debt. I have always felt the obligation to pay my creditors and show no missed/late pymts on my credit reports. If I were to borrow less than than my credit debt, but, enough to get me by for the time being, is allowed to get an equity loan and the go bankrupt on the high interest credit cards I owe on? I have no idea even what cost is expected on a question of this type. Also, so you have the original outline of my question of Home Equity vs. Bankruptcy? Thank you, Diane
Submitted: 6 years ago.
Category: Bankruptcy Law
Expert:  Ellen replied 6 years ago.

You may want to consider a chapter 7 bankruptcy. I will explain.

As an individual, there are two types of bankruptcy available. A Chapter 7 and a Chapter 13. There are distinct differences in between a Chapter 7 and a Chapter 13 bankruptcy.

A Chapter 7 bankruptcy could discharge (erase) all of your unsecured debt such as credit cards, judgments and personal loans. It would be an opportunity for a fresh financial start. However, you may have to surrender assets, if any, that exceed your exemption.

A Chapter 13 bankruptcy is a repayment plan for an individual. It may require that you repay some of your unsecured credit card debt over a 3 -5 year period. However, you may retain assets that exceed your exemption.

Here are the exemptions for Texas:

Best wishes for a successful outcome. If you have additional questions, please do not hesitate to submit them to me directly.

Thank you,
Customer: replied 6 years ago.
<p>I wanted to add that all of my debts are on unsecurred credit cards. I unsure on your response to whether or not I can I borrow from my credit union thur the Home Equity Loan to cover upcoming medical needs, home and car upkeep today. AND, then sometime in the future, (maybe 6 months to year down the road) file for Chapter 7 bankruptcy on the unsecured credit card debt I still have not paid off? Can I be denied Chapter 7 bankruptcy, it I have the possibility to get another loan thru home equity?</p><p>I apologize for bothering you again, it is just that, I may need to get the home equity to pay for an upcoming surgery, that requires I pay in advance, then later, I may need to follow thru with the recommedation of Chapter 7 for credit card debt, not related to medical and is unsecured. I hope my questions make sense. Once again, thank you for your time and expertise. Diane</p>
Expert:  Ellen replied 6 years ago.

You can borrow on your home equity loan to pay your upcoming medical bills and then file for chapter 7 bankruptcy to discharge the unsecured credit card debt.
Ellen and other Bankruptcy Law Specialists are ready to help you