I have been a struggling single mom for over 10 years. I recently started to get child support and now my ex-husband has stopped paying half because my son turned 18 and went into the Navy.
I have been using credit cards and got a personal loan to help support the kids getting them essentials. I rent, own an old car, work a full-time job and a part-time job.
I have worked with many credit card companies to lower my minimum due payments but my personal loan and Capital One WILL NOT work with me.
Should I file for bankruptcy because I do not want to go through the calls, missing payments, potential civil claims associated with a debt management company? I would like to pay my debts but at this point, the amounts wanted are above my income.
That is a long decade of stress. Yikes.
I don’t know what state you live in but the fact the child support ended when your son was 18 is fairly typical. Since you say he stopped paying half it sounds as if there is another child involved and you are still getting support for that child.
Your work ethic is admirable. It sounds like you are doing all you can.
It seems the underlying issue here is you gravitated towards credit to help make ends meet. I understand how that can happen.
But at the end of the day, the limits of spending are dictated by the combined limits of obligations and income.
While creditors MAY work with you, they are not obligated to. Some debt relief companies know some tricks to get the creditors to agree to deals but it would be up to the deal and your individual circumstances to make any decision about if the tool used or deal struck is a smart move.
Bankruptcy is always a possible solution and it is the only remedy you have to affords you legal protection from your creditors. Bankruptcy is often the least expensive and fastest way out of problem debt.
You say you would like to pay your debts off, and you can even if you file for bankruptcy. That’s optional and something you can do even though you would have no legal obligation to do that after your debt is legally discharged.
The bigger issue is not how you plan to tackle your more stressful debt. The focus of concern would be how you are going to be able to live within your income once you to deal with the debt.
For example, let’s say you decide to enter some repayment program for your debt. If you are not saving money each month now for an emergency fund and/or retirement, that is not mathematically wise. Please look at my What Repaying Your Debt Will Cost You in Retirement – Calculator to see how much you will lose when you are old and need it most.
If the results of that math surprises you, which it should, and if bankruptcy looks more attractive and you eliminate your debt in bankruptcy in about 90-days then what?
You will need to live within your income, start building your emergency fund, rebuild your credit score, and make sure you are putting money away for retirement.
That’s the most important question. Can you live within your current income if you eliminated your debt?