No. of Recommendations: 1
By legal help do you mean bankruptcy? Yes, he can file. And it appears that he will be eligible for Chapter 7, which wipes out unsecured debts.

However, before he can file, he'll need to save up some money to pay the lawyer and he'll have to undergo credit counseling. (Lawyers refuse to put their charges on a credit card if someone is filing; they want immediate payment).

Here's a link to a national group of credit counselors.

http://www.nfcc.org/

And here's list of approved credit counselors.

http://www.justice.gov/ust/eo/bapcpa/ccde/cc_approved.htm

As Gingko said, the creditors can't touch his 401(k) and his home, but they can file a lien against his home which will make for difficulties if he needs to sell it. A lawyer can explain all the risks he might face. (Bankruptcy, while filed in Federal court, has different rules in different states, so your nephew will really need to talk to a lawyer about what exactly might happen).

My greatest concern is if your nephew has stopped the spending spree. Has he changed his habits and his way of living, or is he likely to start spending again once the debt is gone? There are plenty of people who wipe out their debt, and once it's gone charge up the cards again. They'll never get out of that way of thinking.

Hope this helps.

Nancy
Print the post  

Announcements

UGC Disclosure Notice Regarding Credit Card Posts
Community board discussions about credit cards are not provided or commissioned by banks who may have advertising relationships with The Motley Fool. Responses have not been reviewed, approved or otherwise endorsed by the bank advertiser. It is not the bank advertiser's responsibility to ensure all posts and/or questions are answered.
TMF Credit Center
The Motley Fool Credit Center arms you with real tools and simple messages, that will help you in every credit situation.
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Community Home
Speak Your Mind, Start Your Blog, Rate Your Stocks

Community Team Fools - who are those TMF's?
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.
Advertisement