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I am at a loss as what to do. I am such a financial situation that i am not able to pay the debts that I owe. I owe about $20,000 on different credit cards. So, if I don't file bankruptcy can they take my house? I have heard that filing bankruptcy can eliminate all your debts. Is it true? Will bankruptcy hurt my credit score?
Help please :(
cant pay debt
Hi Rosalyn,
First pull a copy of your credit report and check the status of your accounts. If you own the house, you can take a mortgage on it and try to pay off the credit card dues. It is a better option rather than filing bankruptcy. Moreover bankruptcy cannot eliminate all your debts. It depends on the state laws on bankruptcy and how much of debt you have. Bankruptcy stays on your credit report for 7 years and hurts your credit.
You can also send hardship letters to the creditors, mentioning that you are facing a financial crisis. You will get a sample hardship letter, at http://www.creditmagic.org/letters/loan-modification.html which you can refer to. Modify it according to your own situation.
Hope this helps.
Regards,
Aaron
Aaron gives you good advice. Even if you have some equity in your home you could use that to pay off the bills. It would stretch the payment out over quite a maNY years and you may only be paying a small portion out than what you were before. We had to do this a few years ago when we were building our new home and prices skyrocketed and I lost my job. We added our truck payment into our home loan. It barley raised the house payment and was a relief to not have to send out the extra 250. sometimes you have to do things you normally would not do. Best of luck to you.
Bk stays on your report for 10 years
The Bk court will require credit counseling so why not start there? It might get you some other options.
I would request copies of your report from annual credit report dot com, and see if there are any inaccuracies.