Q. My husband and I would like to buy a home in the next year or so. My credit is in pretty bad shape, so we’ve decided to work on getting his credit in better shape in order to qualify for a mortgage loan. I have $104,000 in debt, and $92,000 of that is in student loans. He has $13,000 in debt, with $7,000 of that a repossession on a car for which he was a co-signer. Can I file bankruptcy on my debts only?
A. You can’t file bankruptcy on certain, specific items. By the way, student loans are not bankruptable. Even if you filed, you would still have all that debt hanging around your neck.
I want you to own a home, but I don’t want your home to own you. Neither one of you have done very well with money so far, and at this point I’m afraid a house would be a curse instead of a blessing in your lives. I would encourage you to build a stronger financial foundation before you buy a house. In short, this means you need to get out of debt, save money, and start living on a budget.
Buying a house when you’re broke and deeply in debt is never a good idea. I’m not trying to be mean, but I really think you’re asking the wrong question. I don’t want you to try and use bankruptcy as some kind of escape from this situation. Right now, I want you to change your behavior with money and get things cleaned up with a good, organized financial plan in your lives.