Q: Own and home outright in TN, Can I keep it in a Chapter 7 bankruptcy?
I am 64 years old, live in TN, I'm in very poor health. I do own my home but nothing else of value. I owe around $35,000 in credit card debt. I receive $835 per month in SSDI. Will I lose my home in a Chapter 7 bankruptcy? I have seen that TN only allows $12,500 in equity on a home. Plus the wildcard. If I lost my home, I don't know what I would do. So far I have managed to make the payments each month but now am unable to do so. Should I file or try to keep making payments that are very hard on me? My home is worth at most $140,000, maybe not that much, and needs a lot of work. Please help by answering my question.
A: You Would probably do best by applying for a home equity loan, paying off the credit card, and repaying the home equity loan at a much lower interest rate and payment. Credit card interest rates are astronomical and you will likely never pay it off but a home equity loan would probably make it manageable. It does not appear you are a good candidate for bankruptcy, although a Chapter 13 might give you some relief if you cannot obtain a loan.
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