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Now, I had a question about whether you can still file chapter 7 if you sell your house.

A chapter 7 bankruptcy gives you a full discharge of all your unsecured debts. Typically that means that all credit card debts and medical bills will be gone. You do have to include them in your bankruptcy filing papers, of course. Don't forget to include them all.

Unsecured loans are discharged in a chapter 7. But secured loans are not. A secured loan includes your mortgage and your car loan. These loans give the lender a security interest in your house or vehicle. And a bankruptcy filing will temporarily delay collection on these loans but won't do anything longterm to alter these loans.

You can do a chapter 7 or chapter 13 bankruptcy filing whether you still have your house or not. Of course, always consult a lawyer about legal issues and don't listen to me. I'm just a guy on the Internet. But what I would do is this. I would avoid filing bankruptcy.

I would instead use methods that let you settle your bills with your creditors and have them report favorably to credit bureaus. It does not always work with all creditors, but it does work with a lot of them. You can lower your bills without bankruptcy. Keep bankruptcy open as a future option, improve your credit, and lower your payments. What could be better?

Click here to find out a little more about your mortgage and bankruptcy here.