Will filing for bankruptcy give us a fresh start? We are extremely stressed over our financial situation.?

Question

When the company I worked for closed operations, we used our credit cards (carefully and all out of necessity) to supplement our lost income. Despite help from family, we still incurred over $30,000 in credit card debt. I also have student loans that I have to pay back ($35,000). We have fallen behind on all our credit card payments (some are already in collections) because our combined income is not enough to make ends meet. The very little income that we currently make is barely enough to pay our rent, utilities, and the expenses to care for our three children. We recently consulted with a bankruptcy lawyer and he advised that we file for bankruptcy. In his exact words - Companies don't care. You're just another number. They just want to settle any amount you can afford. Even if your situation gets better and you were able to repay your debts, it would take years and the bad credit score would still be on our record for the next 7 years.

We really don't want to file! Need advice.

Answer 1

Try to avoid doing this at all cost. It's a stigma that will haunt you for 7-10 years, and with the new bankruptcy laws, you'll still be paying. If your situation gets better, and you do pay things back, it'll look better than if you just tried to wipe out your debt. Here is some good reading before you take this drastic step.

8 steps to take before bankruptcy:
http://articles.moneycentral.msn.com/Banking/BankruptcyGuide/8stepsToTakeBeforeBankruptcy.aspx

12 myths about bankruptcy:
http://articles.moneycentral.msn.com/Banking/BankruptcyGuide/12MythsAboutBankruptcy.aspx

Before you file for bankruptcy, seek help getting your finances back on track. For example, the Consumer Credit Counseling Services is a national nonprofit group that offers debt-repayment plans and advice at little or no cost.

http://www.suzeorman.com/igsbase/igstemplate.cfm?SRC=MD012&SRCN=aoedetails&GnavID=20&SnavID=20&TnavID=&AreasofExpertiseID=5

Try everything you can to avoid filing. It may look bleak now, but you can come back. Sometimes all it takes is someone else looking at what you have to show you how to do it.

Answer 2

your student loan is exempt your attorney is right keeping stressed out on a daily basis will ultimately destroy boTh you and your marriage the bankruptcy will stay on your credit file for 10 yrs however you can start re establishing your credit immediately after has been discharged its not an Honorable thing to do reading your fact one must always think a few years ahead companies have no loyalties anymore give yourself and wife break file and start fresh again th other solution is to really cut back on non essential things move to a lower rent or mortgage payment get in touch with a credit counseling comp your bad credit will still be there but you will pay off your debt off in 5 to 7 yrs

Answer 3

You really need to do what's going to fit you, I believe you will have to pay off your student loans no matter what but getting rid of the credit card debt would be a great idea since they are already in collections your credit is ruined. If you think about it, thats going to be on your credit for 7 yrs. Would take you years to clean it up and the bankruptcy would only be there 10 yrs. I've been debt free for 2 yrs now, we cashed outta the big house and bought something we could pay cash for, it's not the castle I always lived in but you know what? we can live on one income if it comes down to it!

Answer 4

This is a very interesting question. My (common-law) husband recently filed for bankruptcy so that we wouldn't lose our house. You know, the house we need to shelter the kids that the Christian god supposedly gave us. Most everything is becoming more expensive by the day in Bushworld, and we've had a hell of a time just barely hanging on. I'm surprised that this question isn't getting more answers. Edit to Granny: Good stewards, my @ss. My husband busts his *** 7 days a week, and trust me, the bankruptcy court trustee is seeing to it that we pay everything we 'rightfully owe' - including the mortgage company's exorbitant attorney fees and outrageous additional interest. You obviously have never had to choose between paying the mortgage or keeping your utilities on. Only in Christian America.... Disgusting. Edit 2: Section hand: How do you explain the fact that the only habit in my house that costs us money is buying groceries??!! Why would you assume that we're gamblers, drug users, etc.?

Answer 5

i too was in a financial rut after a bitter divorce. i lived from payday to payday for about five years, just getting by. i would get paid and find i had only around $25 till next payday, then gas for the car. i was in a world of hurt. i listened to the commercials where they say to call your creditors and try to work something out but they didn't want to hear it, they wanted money. i know people will read this and say what a dumbass i am for getting in that situation, but things happen. i too didn't want to file, i felt an obligation to pay my debt, but when i couldn't get the help i asked for i decided to file for bankruptcy. it's been three years now and i think it was the best move i made. i didn't feel good about doing it but life goes on. today i get offers from credit card companies and car dealers which i ingore. today i am able to save some and i pay cash. i did get an offer for a credit card for 7500 at 9% intrest after i filed and i got that one for emergencies. i don't carry it with me, it stays in my dresser. bankruptcy is not as bad as they make it out to be. you will survive. take care and good luck

Answer 6

Sounds like you got good advice.

Google it. Ask.com Look at all available sources of info.

Type: Critical Credit Assistance into any search engine.

Answer 7

No big deal you're just reaping the harvest for people voting for Republicans. Most of us are in the same shape as always when Republicans rule. One of these days you'll learn. Until then you'll just have to suffer.

Answer 8

Companies don't care. You're just another number.