Expert: Mark J. Markus- California Bankruptcy Attorney - 10/3/2005

Question
Mark,

Thank you for volunteering your time.  I'm writing to you on behalf of my girlfriend.  She is a 5th grade school teacher and has been divorced for about 4 years now.  She literally went from having never been on a checking account to having a mortgage, utilities, etc..  She's done a wonderful job providing for her kids and living a modest yet comfortable life.  That said, she has hit a wall.  Her credit card debt is killing her.  That combined with incidentals and mortgage/utilities has become a big problem.  She has a fixed salary (about $1,900 net) plus about $260/mo in child support.  Her mortgage is about $850/mo.  Her credit cards total about $450 per month making the minimums.  After she pays utilities, food, incidentals, etc.. she is unable to make it. I've been exploring other options with lenders but her credit score is awful (sub 500).  As a result, even though her mortgage is in good standing she has been unable to find a lender to this point who will help her.  Ideally she would get a refi to interest only loan, roll in the cc debt and start with some breathing room.  As this is not looking good she keeps talking about filing for bankruptcy.  I hate to see this route takin for all of the negative reprecussions for years to come but she is feeling squeezed.  Any suggestions based on your background?  Your help is greatly appreciated!

Harrison  

Answer
Well, you don't say how much debt she owes, but bankruptcy is certainly one alternative.  If she wants to do it, she would likely be better off doing it before the new laws go into effect on October 17.  I advise she speak to a bankruptcy attorney in her area immediately.