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Terry L.
Terry L., Attorney
Category: Bankruptcy Law
Satisfied Customers: 2900
Experience:  Better Business Bureau. 18yrs bankruptcy experience. Chicago Bar Assoc. American Bankruptcy Institute member.
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I am thinking of filing for Bankruptcy Chapter 7. I live in

Resolved Question:

I am thinking of filing for Bankruptcy Chapter 7. I live in California. I have never applied before. Presently I am 10 months behind in mortgage payments at about $2100 per month. I owe approximately $30,000 in credit card bills. My only source of income is Social Security of about $1600 per month. I own a 12-year-old car which is paid for. Do you think I am a good candidate for bankruptcy Ch. 7?

Also, I live alone and get no financial support from anyone, including relaties.
Submitted: 8 years ago.
Category: Bankruptcy Law
Expert:  Terry L. replied 8 years ago.
Chapter 7 will not help you with the mortgage, they will continue to foreclose shortly after you file and they get permission to continue. Ch7 can only help you with the credit cards. If you wish to surrender the home, you can in chapter 7. Chapter 13 is a debt consolidation whereby you cure the mortgage arrears and pay back a percentage of the consumer debts, based on your monthly disposable income.
Customer: replied 8 years ago.
Isn't there also a Chapter 11? What is meant by curing the mortgage arrears?
Expert:  Terry L. replied 8 years ago.
Chapter 11 is mainly for corporations, or for individuals with too much debt to qualify for ch13.

Arrears = the 10 months you are behind on mortgage payments.
Customer: replied 8 years ago.
Also, the only monthly income I have is $1600 Social Security which lets me eat, pay medical expenses and feed my cats.

As for mortgage arrears, please tell me how Chap. 13 would help.

I live in California.
Expert:  Terry L. replied 8 years ago.
Chapter 13 can cure the arrears over a 3-5 year repayment plan. However, you must show enough income to pay your monthly living expenses, your mortgage, and extra to afford the repayment plan. It could be tough with that low of income.
Customer: replied 8 years ago.
It would be impossible unless I got a loan and who would give me a loan with my credit rating now. Besides, that would give me more debt! I guess the Bankruptcy laws can help only with my credit card bills. I can't leave this house! I've been here for 12 years and it's my home!
Expert:  Terry L. replied 8 years ago.
You can discharge the credit cards in chapter 7, and you should look into a refinance or loan modification to help with the mortgage, unless you would rather walk away from the home in ch7, which is your choice too. Good Luck to you.
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