[mcriman]

I am recently divorced and got ownership of our home - equity in the home is about $10,000. I have about $50,000 in personal loans and credit card debt - amassed within the last couple years. I have a paid-for car worth about $5,000. I cannot make my house note with all these bills. If I file for bankruptcy, would I be forced to sell my home or car?

[DoulaLC]

House... no, car... depends. You have some other options you can look into to see if they might be a better choice at this time. You can contact our creditors, explain the situation and see if they will work with you... some will, some won't, but that would be the first step. There is also the option of working with the lender for your mortgage... many will want to help you out to avoid foreclosure... maybe lower your payments for a time, reduce your interest, etc.. There is also the option of a short sale where you would sell the house at a reduced cost to move it quickly and the bank will take that as what you owe (better for them than being stuck with a foreclosure and you get out of the loan). With bankruptcy you would have a clean slate... either right away or after a few years depending on what you would qualify for. Downside is that you will have a bankruptcy on your credit report for approx. 10 years. Many people assume you won't be able to get any credit after bankruptcy, but that is not the case. You will, but it may not be as easy and you will be looking at higher interest rates. Some credit card companies would be more than happy to help you build back up your debt so beware if you go the bankruptcy route. It is easy to fall back into old habits and find yourself in immense debt all over again. Bankruptcy may also play a role in some career moves, insurance rates, etc..