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Home > Reader Questions > Should I Just File Bankruptcy and Quit Paying My Credit Card Debt? – Kim

Should I Just File Bankruptcy and Quit Paying My Credit Card Debt? – Kim

Unemployed sales rep, back in school for RN. 25K in cc debt and trying to decide if I should file Ch 7. I will be in school for another 2.5 years.

Should I file or just quit paying the 25K in cc debt. I have been told by friends to just stop paying them and change my phone number. Also, that if the sue me they will usually not show up to court. I recently lost my job, but even then with steady income I could not make my minimums. Is it better just to go a head and rebuild my credit and how hard it that?

Thank you

Kim

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  • Strmynyte

    Hey Kim,

    It sounds like CA and FL have very similar laws. We went thru Chap 7 also w/a great attorney who handled EVERYTHING and was even at the Creditor’s Meeting; which we found out was a great asset for us as we watched other’s who’s attorney did not go.

    I have to say, for us, the bankruptcy lifted an enormous burden for us. We were doing fine until the cc companies started lowering limits and raising minimums. I never thought I’d be in the situation to file, but after we reduced everything to the bear minimum – yes you CAN live without cable and texting – and sold what we could, we still came up short all the time. We tried working w/our mortgage company and the cc companies, but the mortgage company would do nothing and even when 4 of the 5 cc companies allow hardship plans, it still wasn’t going to get us out of debt.

    The hardest part will be to not get into the same spending styles, and I have to say, it’s really not that hard. The best part is that now that we’re moving forward, we have more in savings than we ever have had before! And believe me, that really cute pair of shoes will be just as cute on someone else!

    Good luck and I’d also suggest getting thru it sooner than later.

    Missie

  • Strmynyte

    Hey Kim,

    It sounds like CA and FL have very similar laws. We went thru Chap 7 also w/a great attorney who handled EVERYTHING and was even at the Creditor’s Meeting; which we found out was a great asset for us as we watched other’s who’s attorney did not go.

    I have to say, for us, the bankruptcy lifted an enormous burden for us. We were doing fine until the cc companies started lowering limits and raising minimums. I never thought I’d be in the situation to file, but after we reduced everything to the bear minimum – yes you CAN live without cable and texting – and sold what we could, we still came up short all the time. We tried working w/our mortgage company and the cc companies, but the mortgage company would do nothing and even when 4 of the 5 cc companies allow hardship plans, it still wasn’t going to get us out of debt.

    The hardest part will be to not get into the same spending styles, and I have to say, it’s really not that hard. The best part is that now that we’re moving forward, we have more in savings than we ever have had before! And believe me, that really cute pair of shoes will be just as cute on someone else!

    Good luck and I’d also suggest getting thru it sooner than later.

    Missie

  • LB

    Hi Kim,

    You don’t say what state you are in and BK laws vary by state, but here’s my experience. We filed Ch. 7 earlier this year in CA. In CA, Ch. 7 eligibility is determined by means testing, i.e., to qualify you need to be below a certain threshold in terms of income and assets. If you qualify, all unescured debt (credit card) is eliminated. Debt not eliminated by Ch. 7 includes IRS debt, student loans and court judgments (if you injured someone driving under the influence and they obtained a judgment against you).

    If your income and assets are too high to qualify for Ch. 7, you may qualify for Ch. 13, which requires you to pay back a portion based on your ability to pay, which is ascertained by a court.

    Personally, I would not ignore the problem by changing your phone number. You could get sued, have future wages garnished, etc. You should be able to get a free consultation with a local BK attorney. We interviewed 3 before deciding on one. Also, check out the attorney with your state bar association (you can easily Google it).

    As far as our experience, we paid a total of $2000 to our attorney. He handled everything perfectly and we received the final resolution of our Ch. 7 in July of this year. It was a great relief to be out from under our massive, unpayable debt. 2 weeks after we received the notice that our Ch. 7 had been completed, I received a credit card solicitation announcing that I “had successfully moved beyond bankruptcy”. HA! They won’t hook me again so easily. But I mention it in as an answer to your question about rebuilding your credit. As long as you have an income, you will be able to get credit – not at great rates at first, of course, but you can get credit.

    Best of luck to you in your debt resolution journey and in your new career!

    Lisa

  • LB

    Hi Kim,

    You don’t say what state you are in and BK laws vary by state, but here’s my experience. We filed Ch. 7 earlier this year in CA. In CA, Ch. 7 eligibility is determined by means testing, i.e., to qualify you need to be below a certain threshold in terms of income and assets. If you qualify, all unescured debt (credit card) is eliminated. Debt not eliminated by Ch. 7 includes IRS debt, student loans and court judgments (if you injured someone driving under the influence and they obtained a judgment against you).

    If your income and assets are too high to qualify for Ch. 7, you may qualify for Ch. 13, which requires you to pay back a portion based on your ability to pay, which is ascertained by a court.

    Personally, I would not ignore the problem by changing your phone number. You could get sued, have future wages garnished, etc. You should be able to get a free consultation with a local BK attorney. We interviewed 3 before deciding on one. Also, check out the attorney with your state bar association (you can easily Google it).

    As far as our experience, we paid a total of $2000 to our attorney. He handled everything perfectly and we received the final resolution of our Ch. 7 in July of this year. It was a great relief to be out from under our massive, unpayable debt. 2 weeks after we received the notice that our Ch. 7 had been completed, I received a credit card solicitation announcing that I “had successfully moved beyond bankruptcy”. HA! They won’t hook me again so easily. But I mention it in as an answer to your question about rebuilding your credit. As long as you have an income, you will be able to get credit – not at great rates at first, of course, but you can get credit.

    Best of luck to you in your debt resolution journey and in your new career!

    Lisa

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