My friend has gotten in some credit card debt. She tried to get her home refinanced, and was able to get her mortgage payments lowered, but wasn’t able to get the other debt paid off, so she went to a debt reduction service. Now, the cards are being paid off, but they are charging her such a big chunk of money that now she is behind in her mortgage. Now she is forced to choose between her household bills credit debt. She wants to pay both, but can’t. Any suggestions? And please, no nasty comments, as that will not help.

My advice would be for your friend to consider a chapter 13 bankruptcy. She will be able to keep her home and get her credit card debt repayment plan pared down to a reasonable amount.

If she files Chapter 7, which she may or may not qualify for depending on her income, she can have the credit card debts discharged and reaffirm her mortgage to keep her house if the equity in it doesn’t exceed state maximum.

A first consult with a bankruptcy lawyer is free in most cases. Her credit is already damaged if she is in a debt repayment plan, but it’s doing her no good and has the potential to get worse if the plan is making it impossible to pay for her home.

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