Generally speaking, borrowing money to solve debt problems is a bad idea. It is very unlikely that taking on debt will solve debt problems unless you are virtually certain that extra income is on the way in the very near future.
Paying back relatives within one year of filing a bankruptcy case causes problems. In a Chapter 7 case, a trustee is likely to demand what you paid back to your relatives because it was a ‘preferential transfer.’ More simply, all of your creditors must be treated equally in bankruptcy. If grandma gets paid back in full, the bankruptcy code declares it to be unfair that the credit card companies do not get paid anything at all. So, the money you paid back to grandma gets taken by the trustee and split up evenly among all your creditors.
Try to avoid borrowing from family members or friends. If you have already done so, a bankruptcy attorney will have to examine any transfers, and take special care to disclose them properly to the court. If you live in Western North Carolina, I would happy to speak with you about this issue in a free, initial consultation.
