Should we go bankrupt?

by Kristen
(CA, United States)

Should my husband and I do a bankruptcy? Should we short sale our condo or foreclose?

My husband and I are in over our head and we don't know what to do. We are truly embarrassed and don't know a way out and what is the safest way to get out without damaging our future.

Problem #1:

We have been married seven years and have two small children. We currently own a two bedroom townhome that we purchased for $418k and we refinanced 20,000 about 7 months after we moved in because it needed a lot of work done to it. Our home as of right now is only worth about $250k. Our house payment after a recent loan modification is $2960 after association dues and taxes.

We are not attached to the condo I would not mind having to move and rent until we can get back on track. It is very small and we could use a little extra space. But again I don't know if doing a short sale with a first mortgage to wells fargo and a second of $100,000 to bank of america if we would owe a remaining balance how this would benefit us to go and rent?

Problem #2:

We have a lot of credit card debt. Including a personal loan that we used to pay off some old car debt and debt from our previous property we owned. Our total unsecured debt is around $50,000. The total monthly minimums on all of our bills are $1300.00. This is before even beginning to pay them down.

We also have 2 car payments that we have tried to get out of and cannot. Which total 680.00 a month, car insurance, cell phones, toll roads misc. house bill gas, trash, water etc. That total about $1000.00 a month

We make combined take home $6400.00 a month. This total comes out to about $6000.00 a month before gas and food. We are falling short and do not know what to do anymore. We have a wonderful family and I don't want to see finances get in the way.

If we do a bankruptcy most of the debt as for the credit cards are in my husband's name. But the house is in both of our names. I just don't know what to do or who to turn to we just need help. If you could give me any advice I would cherish it or if you know who we could go and talk to about our situation.

Thank you kindly