Should We Just See A Lawyer About Bankruptcy Before This Gets Worse? – Susan

“Dear Steve,

Dear Steve,

My husband’s work in construction ended last year so he made $900 and is trying to get started in a sales position that is costing some money to get started. My overtime has been cut drastically and I am now making about $61,000 a year. To keep up with bills and payments we have used credit cards and we now have about $80,000 of credit card debt and a car payment of $420. We rent our house in So. Cal for $1350/mo which is cheap around here. We have been renting this place for 12 years. Should we just see a lawyer about bankruptcy before this gets worse?

All of our interest rates have gone over 22% even though we have not missed a credit card or car payment in over 5 years. A late payment has been rare. But the last of our savings is just about gone. I am afraid the bill collectors will be relentless if we start missing payments and we barely have enough money to get by on now. If they garnish my wages we will be out on the streets.

Susan”

I asked my friend Susan Nilon to answer your question for you. I wanted to make sure you got an answer as quickly as possible as I’m a bit backed up at the moment. I’ll be watching the comments on this question and be around to help if you need me.

Sincerly,
Steve

You are not alone. I'm here to help. There is no need to suffer in silence. We can get through this. Tomorrow can be better than today. Don't give up.

Dear Susan,

It seems that your financial world is starting to spiral out of control, but you are taking the right steps to help stop the sting. Yes, I do think you need to see an attorney. A bankruptcy attorney would be able to help you understand what you need to do to get handle on your finances.

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But let’s talk about your other issues. It is not uncommon for the interest rates to go up without the justification of missed or late payments these days. Creditor’s will often run a report on you an make that determination, even if you have done nothing to provoke it. But what really concerns me is the amount of debt you owe. $80,000 is an incredible amount of debt. What concerns me is what caused you to acquire the debt? Did this all occur after your husband lost his job? Even before you husband lost is job, it would still seem that something was wrong with your budget. Your rent does not seem unreasonable, and you car payment – while it could be less, is also not uncommon. The question I have for you is if you were to file for bankruptcy, could you then handle the management of your finances?

In addition to talking with an attorney, my suggestion to you would be to seek some help on learning how to work a budget that will not leave you in so much debt. Seeking the advice of a credit counselor is a way to be proactive. And if you do end up filing for bankruptcy, it will be a requirement of your settlement.

My last suggestion to you is to start on your own by taking a hard look at your bills and seeing if there is a way you can reduce your expenses. Things that seem insignificant in cost can add up over a period of time. When you begin to track what you spend, those items may not seem as important when you realize how much you are spending on an annual basis.

Another resource you can check out is the eBook: “Reduce Debt Reduce Stress- Real life solutions for solving your credit crisis.”, by Gerri Detweiler. It’s a easy beginning to understand what can happen when you find yourself in a world of financial upheaval.

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Hang in there. You are taking control and being proactive. If there is anything else that I can help you with, please let me know.

Sincerely,

Susan

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