Is Bankruptcy the right option?

bkdummy · #1 (**permalink**) 07-02-2010, 04:13 AM

Hello, This is my first post and I really need some help resolving my finances. Any advice would be greatly appreciated. Sorry for the loooong post...

I am currently carrying about $50K (us$) in credit card debt, and $35K (us$) in auto loan debt. I'm married, but all of this debt is in my name. I wracked up this debt about 4 years ago when my husband and I were not working. I have always had excellent credit, 750+. To this day I have never had a late payment, and am doing all I can to pay down my debt. 6 months ago I got the cc debt down to $35K, but my husband, who makes most of the $, lost his job and we had to live off of credit cards for a few months and the total went back up to $50K

For the past few years, every $ has gone to trying to pay this debt down, and if it weren't for the dang high interest rates, I would have paid my debt off by now. I tried to get the cc companies to lower my interest rates, but they won't, and all are 20-30%!

I'm sick and tired of every dollar going towards debt, having no savings account, and having to live like a pauper. I've even moved in with my parents in order to pay this debt down. I feel as if I've followed the rules, but my situation is not improving. My husband now make enough to cover a little more than the min, but I just can't keep handing his entire check over to Chase, Citi, and Discover. I am currently not working :/

I've considered trying to get a $50K loan from a bank, pay off the cc, and then work to pay the bank back in 3-5 years. But, I want to buy my own home soon, and do I really want to take out a loan to pay back the cc companies who won't work with me?

Now I am considering debt settlement or bankruptcy, but don't even know where to begin. As I mentioned earlier, I am current with all payments and still retain a decent credit score of 700. What is the right option for me? I've always been proud of my good credit, but I just can't live like this anymore. My debt is spread across 8 cc with 5 lenders. What are some good debt settlement companies? Is the loan the best option? Would I even qualify for such a huge loan? I don't have any assets other than my vehicle and household goods? If filing bankruptcy, would they come and take away things like the TV?

My husband has no credit, so if i filed we would have to do something to build his credit as quickly as possible.

Thank you to anyone who can give me some advise. I'm desperate to get out of this situation but have no idea how.

DavidBibby · #2 (**permalink**) 07-03-2010, 06:04 PM

If you are looking to buy a home anytime in the future.. then you definitely don't want to declare bankruptcy.

The best advice I can give you is to read Dave Ramseys "Total Money Makeover". You might not think that the answer can be found in reading a book.. (or listen to the audio book if you don't want to read it). But there is a clear path to clearing out your debt.

As of right now.. you are current in your payments. This is a good thing. To declare bankruptcy now would be a big mistake.

You have choices... while bankruptcy or debt settlement might seem like an easy choice.. it has long term consequences that you won't be prepared to deal with.
It WILL hurt you in the long run.

If I may inquire.. what is the breakdown of your debt? I don't need to know the names of your cards.. but just a listing of the type of debt, balance, minimum payment, and interest rate.

Something like this...
Credit Card 1 - $8000 - $125 per month - 20 percent apr
Credit Card 2 - $2000 - $45 per month - 19 percent apr
Credit Card 3 - $500 - $20 per month - 16 percent apr
Credit Card 4 - $6000 - $100 per month - 23 percent apr
Auto Loan 1 - $22000 - $450 per month - 6 percent apr

Basically... with that information I and the people on this forum can better help you determine how and where to get started.

Feel free to send me a private message

Jamwock · #3 (**permalink**) 07-13-2010, 05:33 PM

To be current on your payments is a GIFT! Don't throw it away! Now, listen, you used the money, didn't you...don't bite the hand that fed you! Keep your intentions pure and you will get the assistance you need in good time.

To begin with, I suggest you do as DAVIDBIBBY said, and have the forum experts work out a plan for you. If you can get a lower rate from the bank, I would go for the loan...after all, you would have cleared major pressure off your back..unfortunately, the bank will likely require some kind of paycheck..that's the downside.

If you want to send me a private message, we can talk further on options available. Good luck.

PrimeDebtServices · #4 (**permalink**) 07-13-2010, 07:42 PM

DAVIDBIBBY is right on point. Right now it just sounds like your sick and tired of paying these debts. If you are still on time on your payments then try to get it done yourself. As any Debt Relief program/Settlement/Consolidation/Consumer Credit Counseling will affect your credit. Settlement programs are mainly designed for people that are falling behind on their debts or people that are just about to fall behind.

DAVIDBIBBY is probably going to refer you to a Debt Payoff calculator which is what you should use. That is why he needs the information he is asking. You can also look them up yourself on google and they are very easy to use. I would recomend the one CNN made. If you need help post it on here rather then just sending people PM's as they may try and sway you to a company that way for their financial purposes. Plus this will also help other people in the same situation.

Jamwock · #5 (**permalink**) 07-15-2010, 11:44 PM

Have you tried disposing of SOMETHING that you have? Take a good look at what you are hanging on to and get rid of it. Who knows, you might be able to knock a few thousand off. Then, that auto loan..is it for the vehicle you are currrently using? IF you don't have a job to go to you might want to either dispose of it, or if possible turn it in.
As for purchasing a house...Why? A house is no longer a guarantee of stability and often comes with collateral expenses that you could never believe. Access to what you need is the new definition of wealth, not ownership.

Ownership means insurance, risk. Let the landlord take the risk. Save your mortgage money and take trips every year.

Rachel59 · #6 (**permalink**) 07-20-2010, 05:13 PM

You may or may not consider my advice but bankruptcy is not a action you should consider so quickly, there are other routes you can take.

jacobbon · #7 (**permalink**) 08-11-2010, 05:54 AM

Well bankruptcy is not the only option you can have . It must be like the last option you have but you must try some alternate paths before actually filing bankruptcy. This is my personal opinion & you can have your opinion always

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