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Disabled mother of two considers chapter 13 bankruptcy to save home

A 40-year-old woman in the Midwest who suffers from Crohn's disease and Fibromyalgia has two kids to support and a mortgage. She receives disability checks from the federal government and works part-time at home as best she can to try to make ends meet.

Her modest income of less than $2,000 a month is used to keep a roof over her and her two children's head, and pay all the expenses that a single mother of two must cover-not to mention her own medical expenses associated with her disabling conditions.

She reportedly never missed a single mortgage payment-until she was in a car accident that totaled her 2000 Dodge Neon. Insurance covered the balance of the car loan, but the accident left her without transportation to get to the grocery store to provide for her family. She is now considering filing for chapter 13 bankruptcy to retain her home from a potential foreclosure.

After the car accident, the mother of two faced a hard choice to make. She has always kept current on her mortgage, but there is no public transportation where she lives, and she knew that she needed a car to provide for her kids. She found what her friends told her was a good deal on a car. The 2000 Chrysler has 153,000 miles on it and a price tag of $1,500. She decided to but the car, and make arrangements with her bank on her home loan.

She explained to her mortgage holder her situation when she bought the car, but she missed two mortgage payments late last year-in November and December. She had promised the bank that she would make up the $520 payments over time, offering to pay $600 each month until she got back on her feet. In January and again in February, she made the $600 payment as promised. But in March, the bank would not accept the $600. She then received a letter stating that she must pay $145,277 to avoid foreclosure.

She learned from a friend that chapter 13 bankruptcy may help her to stop the foreclosure and help her to retain her family home through the reorganization. She says that she is determined not lose the home.

Chapter 13, like chapter 7 bankruptcy may not be for everyone-but for many the bankruptcy code can help a financially strapped person to get back on his or her feet. Most people look at many options, but it is important to consider speaking with professionals who can explain what is available in finding meaningful debt relief in order to make an informed decision on how to move forward.

Source: St. Louis Today, "McClellan: Mom determined to hold on to house" March 18, 2012

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