I am going to be garnished for my son's car loan soon. How do I survive garnishment? Chapter 7 or 13?

Question

I just bought my home a year ago, and tried to sue the sellers and couldn't because I don't have $10,000 down. My house has some flaws, like the kitchen floods in the winter, there is no heat in the kitchen or laundry areas and the furnace barely works. I've been working 2 jobs to try to survive until home values go up again (I have $40,000 negative equity already), and now my son's car was repossessed.

If they take 1/4 of my income for his debt, I will lose my house after working 2 jobs to survive until the market gets better so I can fix my house and sell it. Would I be better off letting my house go to countrywide, or filing chapter 13 or 7?

If I file 13, then I still have to pay my son's debt, and I would really love for them to go after him. He needs to learn a lesson. But if I file 7, then I can not keep the house. I have many animals, and have a very hard time finding homes to rent.

If I file 13, will I be able to refinance (I have 100% loan right now) eventually to get rid of my mortgage insurance and finally fix the house up?

I have credit card balances at $9000 and $5000, and owe my physical therapist $1500, and about $20000 on my car, which I would keep.

Answer 1

You never mentioned, where in the world is your deadbeat son in all of this?

Answer 2

Since you are upside down in your home you can not lose it and they can not take your car if you file chapter 7.

What you would need to do is sign reaffirmation agreements on both loans this simply says that you agree to be responsible for those loans and continue to pay the same monthly amount at the same interest rate.

Be sure and contact both lenders and make sure that they continue to report to the credit bureaus this will give you a heads up in reestablishing your credit after your BK discharges.

Answer 3

Sharlie...Spifiman is absolutely correct in his post per your question. You do need to consult with a bankruptcy attorney. Now you didn't state when you filed the chapter 7 before. It needs to be 8 years from the first discharge before you can file for a chapter 7 again. If you qualify and can file chapter 7 again, you can keep the house as Spifiman posted, and re-affirm the loan. The chapter 7 will discharge the debts for the credit cards and the physical therapy bills. This will help give you the money to fix the home up. Now...can you sell the vehicle outright? 20K is a lot to re-affirm on the debt, and maybe find yourself something cheaper to at least get you around. Just thinking of some options to give you some more money back in your pocket and get the house fixed. The chapter 13 is really tight to save money and you pay a payment plan for 3 to 5 years, depending on your income and if you can afford to do the plan. Contact a local bk attorney, they will usually see you free the first time. Bring with you....last 6 months of paystubs, assets, list of your debts and last 4 years of taxes and they will tell you what you can qualify for. If you filed before...bring that paperwork too, they will want to see that is was in fact discharged and what date it discharge...it will be important to see if you can file again. If you have any questions, feel free to email me....Good Luck!!

Answer 4

File 13