obviously I will consult with a lawyer when the time comes but to gain some knowledge..throwaway for reasons
so basically my son is severely disabled. there has been an insurance mix up and they have recalled 3 years of payments to his medical services. for context, a month of his services is about 30k. i am still fighting it but preparing for the worst
I make about 140k a year, have about 40k equity in my house( as of now), and less than 60k savings
this is all very devastating, I am blue collar and my blood sweat and tears have gone into building a decent life for my family. with the total being somewhere around a million dollars, I can't imagine I would be able to pay that back in 5 years. what are some things (if any) that I can do NOW To minimize the damage? To save my house? To protect my savings?
my credit score is around 820 and this medical debt is the only thing hanging over me, if that matters
How to prepare for possible bankruptcy?
byu/Brilliant_Trash_6773 inpersonalfinance
Posted by Brilliant_Trash_6773
1 Comment
I’m not a lawyer. And it’s been 20+ years since I’ve looked at the BK laws.
But I do remember this advice. Finance yourself a new/newish car.
I am serious. I know it sounds counter-intuitive.
You are allowed to have a car coming out of BK. You just can’t have a lot of equity tied up in one. Since you aren’t going to be able to finance a car after BK for a long time, finance it now. Just make sure you have as little equity in it as possible.
Don’t ever miss a payment. Take care of the car. Perform the maintenance as required.
What you don’t want when you get your fresh start is to be driving a paid off piece of crap with 200k miles on it and a motor that is about to blow. You need that car to get to work. To earn income. You need reliable transportation. If you have a junker, and it starts failing, you are going to be in an even worse position than you are now.
If you have a newer car, with litte to equity, then that should serve you well for a few years while you recover and get back on your feet. Eventually you will pay it off. You may be able to save enough to buy its replacement for cash ideally.
Now if this advice still holds true today, I don’t know. Perhaps someone can pipe in and say so.