Posted on May 28, 2009 at 3:12 pm I have no clue but i am thinking about it. More specifically, do you know when to file bankruptcy if you have credit card debt? I am starting to fall behind on my mortgage too it is a complete mess. This is the best bet right?

Posted on May 28, 2009 at 3:42 pm Usually bankruptcy should be used as a last resort. For example, if you have loads of credit card debt and you are having trouble making your mortgage payments, you may want to consider it as an option, as secured debts are non-negotiable and can't be restructured through a credit counseling or debt settlement program. With that being said many people have been in that situation before and dug themselves out without having to file. If your debt problems can be reigned in under control (specifically, your mortgage payments), then I think you can avoid it. I would do everything you can to catch up on the mortgage first. Then worry about your credit card payments. For now those can take a back seat as there is no collateral attached to the debt. How many mortgage payments have you missed? How much credit card debt do you have? That may be the deciding factor as to whether or not you are in a situation that only bankruptcy can solve.    

Posted on May 28, 2009 at 4:55 pm Yes, I agree with Tito, it may not be entirely necessary for you to file BK just yet. For example, if you are only one mortgage payment behind- there are strategies you can employ to catch back up. For example, you can miss a credit card payment or two to make sure you have the money. While your interest rates will shoot up, it is less of a hit than having a BK on your credit for the next 7 or 10 years. Plus, you could potentially negotiate the unsecured debts later on down the line. Do people agree? You think that is a good way to handle that situation? I don't know, but for me, BK is the last thing I would do!

Posted on May 29, 2009 at 12:00 am It does sound a bit overwhelming to have 2 different kinds of debts but I agree with the comments above. Bankruptcy should not be an option just yet, and between your secured and unsecured debt, you really should tackle your secured debt first: your mortgage payment. Your first goal is to bring it current again.As for your unsecured debt: your credit card bills, I once again agree with the comments above, they could be dealt with on a later period. Unsecured debts are negotiable and usually, the creditors are going to be the ones who would want to negotiate with you. So take your time.Regarding your secured debt, what you can do is talk to with your mortgage lender and tell him/her about your financial situation. What the lender can and may do for you is cut down your monthly mortgage and/or interest payment, he/she may even agree to increase the term of your mortgage, or let you pay just the interest for the time being. Just don't let it get to a point in which your lender would feel as if you have no intention of ever paying. The consequence of which is for him/her to seek possession of your home through the courts.

Posted on June 1, 2009 at 3:00 pm Mr. Daniels, I am sorry to hear about your situation and certainly encourage you to fill out a form on DestroyDebt.Com to see if you can get some help without filing bankruptcy. Also, keep in mind that while each state has different foreclosure laws, in most states all you have to miss is 3 payments before the mortgage lender reserves the right to take action. I am not sure how far behind you are but I don't think people realize how quickly that could potentially happen!

Posted on June 1, 2009 at 10:25 pm Hi t.daniels,I'm sorry to hear about your situation. The good news is, you still have quite a number of options to save your financial situation. I agree with the above statements, it's very advisable for you to take care of your mortgage payment first. Try to do a payment arrangement with your lender, explaining your current status. Who knows, they may choose to set up a plan with you and be able to bring it back in good shape again.You have many ways to take care of your unsecured debts. Hiring the services of a credit counseling firm is one of them; they can give you helpful tips and create a specific budget plan for you that you can follow in the long run. You may also opt for debt settlement, where a negotiator can speak with your creditor and cut as much as 70% off of your current balance.With whichever option you choose, make sure that it would be the best one for you and your situation. I really do believe that bankruptcy should be your last resort. Good luck on your endeavors!

Posted on June 15, 2009 at 2:34 pm Ok, I will hold off then talking to a bankruptcy attorney. But what if my credit card accounts have been sent to collections? Will I still have a chance to settle? Sorry I don't know too much about this option.

Posted on June 16, 2009 at 4:42 pm Absolutely. In fact, some accounts can be settled for much less once they are sent to collections. At that point, the account is farther past due and the debt is less of an asset to the original creditor's books. Also, the longer you go without making monthly payments, the longer the creditor goes without seeing one penny of interest. So it ultimately becomes a "something is better than nothing" situation that you should take advantage of. And, if your accounts have actually been sold, the debt buyer has purchased you account for pennies on the dollar and therefore even if they settle with you for a very small percentage they are bound to make a huge profit. Who are your creditors? Settlement percentages will definitely depend on who you got the credit card from.

Posted on June 24, 2009 at 2:55 pm What types of percentages do you think Capital One would settle for? They still have the account and I owe them a couple grand- my hours just got cut and I am worried I won't be able to keep up my monthly payments.

Posted on June 24, 2009 at 3:01 pm If you are current on the account right now you should not expect Capital One to settle the debt. If you end up falling behind, you may want to try and settle the account between 120-180 days past due. At that time they may negotiate with you, and you should try to prevent the account from charging off. From what I understand, Capital One occassionally settles for 50% of the balance if you work with them directly. Percentages are usually better if the account is in collections. Beware- Capital One is more aggressive than a lot of creditors- meaning they send more accounts to attorneys' offices for collection.