Bankruptcy & Keep My Credit Cards?

My house was recently foreclosed on and went to sale where the lender bought it back.  I tried to work with the loss mitigation department but all they wanted to do was increase my payment, which was the problem to begin with. Now they are taking the house back but the second mortgage company says I still have to pay that loan.  I spoke with a lawyer and he said that bankruptcy is the best way for me to go.  That I cannot save my house and I will indeed have to pay off the second mortgage for a house I do not own?  The part that really bothers me is that the two credit cards that I have will have to be included and I am completely current and never missed a payment. I don’t have a problem giving up the cards, but I feel bad anyway.  Do you have any other solution? I have only 3 weeks before I have to be out of my house and I am not sure if I should go ahead with the bankruptcy?  Thanks for your help.

Ann

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Hi Ann,

Your attorney has given good advice.  There may be an option to reaffirm the cards, which means you could waive your legal right to discharge that debt, although this is not normally recommended.  As crazy as it sounds, you will be receiving new credit card offers in the mail shortly after discharge. 

Ann, don’t despair.  The fresh start that bankruptcy provides can counter many of life’s events and successfully change the road a debtor’s traveling.  As to the subject of foreclosure for anyone else reading this post, the Broken Credit Blog has a free thirty minute seminar titled: How To Avoid Foreclosure

Thanks for the questions and hope this helps. 

Paul

This author is not an attorney and this information should not be considered legal advice.  Please consult an attorney for legal advice.