loan secured with household furniture and going bankrupt?
loan is secured with household affects. Will my friends lose their belongings because she is going bankrupt? Due to the fact that she lost her job, and her husband is the sole provider ($600 every two weeks), and they have two children. What might the payments be in the bankruptcy? (They are about $30,000 in debt). Any information would be appreciated. Thank you.
The wife lost her job in December, up until then she was making $1000 every two weeks, so in fact the family income was $3200 before she lost her job. At that point they were able to pay their bills.
If the holder of the loan elects to do so, they can take the household affects. That is why they asked for collateral in the first place, so they would have something to sell if the loan was defaulted.
Anyone who makes $600/week and is $30,000 in debt have been living above their means for a long, long time.
It’s sad to say, but these people need to get real on what they can afford and stop this excessive spending. This is going to be a painful lesson to learn.
The bankruptcy court will set the payments; it will be close to impossible to determine what that will be now.
Bankruptcy stays on their credit report for 7 years — no more easy credit, no home loans, and probably no credit cards. They need to start now spending on a cash basis. Part of each paycheck needs to be earmarked for rent and utilities; part for gasoline and car upkeep; and, part for food. Forget entertainment for a while – play cards or board games at home, and visit friends. No eating out and no pizza delivery (too expensive). Make old clothes do for a while, or buy from garage/consignment sales. Serious belt tightening needs to happen.
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