What to do when you have no money to repay credit card debts?

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What to do when you have no money to repay credit card debts?

Last year my wife became to ill to work and sold her business. We attempted to settle as many debts as possible including credit card to no avail. Discover card would not settle the debt demanding full payment. Now they have turned over the debt to an attorney threatening civil court action if we do not pay. We have used all the business sales money for basic living and now are living on my disability of $800 a month. We have no money to pay the debt or make monthly payments. Our home is our only asset with 2 mortgages that we are trying to keep. What can we do ?

Asked on March 23, 2011 under Bankruptcy Law, North Carolina

Answers:

S.L,. Member, California Bar / FreeAdvice Contributing Attorney

Answered 11 years ago | Contributor

You and your wife might want to consider filing bankruptcy.  If you are eligible for Chapter 7, you could get rid of the credit card debt.  An alternative would be Chapter 13 which would be a payment plan to pay creditors.  You will need to list all creditors on your bankruptcy whether you file Chapter 7 or Chapter 13.  Under Chapter 7 which is liquidation, you can reaffirm debts you intend to continue paying.  If some of your debts are small balances, you might want to pay those prior to filing bankruptcy; however, that is not necessary if you choose not to do that.  It would be advisable to speak with a bankruptcy attorney.  Your County Bar Association may have a lawyer referral service which can provide you with the names of bankruptcy attorneys in your area.


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