Legal Question in Bankruptcy in Virginia

Bankruptcy, Foreclosure, or both?

Facing a crisis of too expensive mortgage, car sales employment, and excessive consumer debt. Don't know which avenue to pursue. Owe 587000 on 1st mortgage, 35000 on 2nd. Home worth 750 to 800000. Have a 3800 monthly mortgage which is interest only for another 8 years. Owe 70000 in credit card/line debt. Income is fluctuating but is about 110000. Can't pay it all. Have about 6-7 30 day lates on consumer debt, no 30 day lates on mortgages. What should we do?


Asked on 8/20/08, 11:27 am

1 Answer from Attorneys
Daniel Press Chung & Press, P.C.

Re: Bankruptcy, Foreclosure, or both?

If the home is truly worth $750K and the mortgages are $622K, you should be able to sell the house and maybe even have some money left over to pay the credit cards. If that does not work, and the house is not worth what you say, then you may want to consider bankruptcy. Given your income, it may make sense to file bankruptcy before a foreclosure: as an above-median income debtor, you would have to pass a means test to qualify for Chapter 7, and the secured debt will be a deduction that may make the difference in whether you pass. See a bankruptcy lawyer now to go over your options while you still have them.

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Answered on 8/20/08, 12:27 pm


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