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ADillon, Attorney
Category: Bankruptcy Law
Satisfied Customers: 441
Experience:  Experience with bankruptcy and other areas of law.
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I have some equity in my residence,my credit card debt is very

Customer Question

I have some equity in my residence,my credit card debt is very high,my income right now is very low, how can I get some relief from payments, until I can sell my property, without taking out bankruptcy?
Submitted: 8 years ago.
Category: Bankruptcy Law
Expert:  ADillon replied 8 years ago.


I will try to help you with this.

I gather that you are trying to sell this property, right? Are you selling this to obtain money to pay debts, or for other reasons? Are you current on your credit card payments?

Have you tried contacting the credit card companies? Or consulting with e.g. a credit counselor?

Customer: replied 8 years ago.
Yes I am current with all my credit card payments and with the mortagage, but this will change soon as all of our savings are used up. My wife has a new business that has not shown any return yet, we planned to sell the property to pay everything off and help fund the new business.
Expert:  ADillon replied 8 years ago.

Thanks for that additional information.

Your options are probably limited. As a strict legal matter, there is nothing you can do other than filing bankruptcy to reduce your debts (or to otherwise alter your payment schedule). If you go into default, the burden will be on your credit card companies to sue you. They will normally try to collect the balance themselves, and ultimately they may sell the debt to another company, and then ultimately they may file suit against you. One of the bigger problems with this is that the will charge a lot of late fees, penalties, interest, and possibly even their legal fees; so, if you go into default on your payments, then ultimately your total exposure is going to be greater than if you paid the bills on time.

Some people consult with credit counselors. In Montana, this industry is regulated, and you can find a list of licensed companies in your state at this site:

I am not necessarily recommending this course, as some people are dissatisfied with such services, but they may have some useful plans and thoughts.

The primary approach here is to contact the credit card company and see if they are willing to work out a different payment plan with you. They really do not want you to go into default, in which case they have to undertake a lot of work to chase their money. And they certainly don't want you to file bankruptcy, in which case they will probably only see pennies on the dollar for their loan to you. Of course, you don't really want to file bankruptcy either, due to the fees, inconvenience, and of course this will be on your credit rating for 7 years.

Another option that some people have is to use the equity in their residence to obtain a loan, which of course is typically at a lower interest rate, and they can make payments over a longer period of time. In your situation, however, this may not be a good option, in part because you are trying to sell the house. (And of course, in this housing market and with the problems in the mortgage industry, you may not be able to obtain such a loan.)

I really do not have any other options for you.

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