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I had a heart attack about 60 days ago and can no longer work. My credit is very good but I see my credit cards won’t hold up for ever. It looks like I will loose my home in about 6 months at the rate I am going through my savings. I am attempting to get a loan modification but from what my investigation has reveled is that is a long shot. My mortgage is at 4 3/4 % and another point will save me only $ 45.00 a month. So I am in Bankruptcy planing at this time. If I start using my credit cards that’s really just kicking the can down the road I have 5 good credit cards that are either paid off or close to being paid off and all are current. My Social Security just won’t hack it.
Will they credit card companies cancel my cards if I go BK? Or should I max um out on my utilities, grocery’s and day to day expenses using credit cards. I’m 72 and don’t have any job prospects due to my heart attack. I do have a small savings account. So what goes first?…… the credit cards or do I just keep dipping into my cash. I am current on my home but the bank says I have to be behind on my payments before I can attempt a modification. This sounds crazy…….. I am in a world of hurt……..Catch 22? I don’t know if maxing out my cards is legal. I have about 6 months to set myself up……….. I think it’s called Bankruptcy planning…….. 🙂
Ed
I baught my home 8 years ago and it is underwater about $ 44,000. I have free health as I am a Vietnam vet

3 Thoughts on Bankruptcy is creaping up on me?
  1. Reply
    M W
    October 20, 2012 at 6:10 pm

    You should start selling your stuff to get rid of unused items. That will generate some cash. Have your kids or grandchildren help you with that.

    Get your house ready to sell. Sell it and take out the equity in cash. Get yourself situated into a low income/senior housing place. Once you exhaust your savings and spend down the cash from the sale of the house, then you will be eligible for Medicaid with is free health insurance.

    If you max out your credit cards, do it with cash withdrawals and put the cash in a safe deposit box for future use. The interest charged by the card will be higher, but you won’t be paying it anyway. At 72, bankruptcy should not be an option.

    You will have no assets except your social security check so tell the credit card companies you are sorry, but you cannot pay.

    Too bad this is what the world has come to, but many of us are going to face the same set of circumstances you are in.

  2. Reply
    ?
    October 20, 2012 at 6:15 pm

    Hi Ed

    What is the loan amount of your home? Have you considered a reverse mortgage? I have done some reading online and with a low interest rate like that i am assuming you have great credit. Because of your medical history it looks to be a good fit for you. here is some info about it. Good luck to you, stay positive:

    . What is a reverse mortgage?

    A reverse mortgage is a special type of home loan that lets you convert a portion of the equity in your home into cash. The equity that you built up over years of making mortgage payments can be paid to you. However, unlike a traditional home equity loan or second mortgage, HECM borrowers do not have to repay the HECM loan until the borrowers no longer use the home as their principal residence or fail to meet the obligations of the mortgage. You can also use a HECM to purchase a primary residence if you are able to use cash on hand to pay the difference between the HECM proceeds and the sales price plus closing costs for the property you are purchasing.

  3. Reply
    Kibble Bits
    October 20, 2012 at 6:28 pm

    It’s time for you to have a family meeting with your kids and grandkids and wife if you have one. This is not a time for you to “go it alone”.

    Let your family know what your financial condition is, they will probably have some ideas that will work for you. They won’t let anything bad happen to you.

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