I have about $45,000 in credit card debt. I would like to negotiate with my creditors to take smaller payments, but one card is garnishing nearly $600 a month so I have nothing to offer the other creditors that are calling and calling. What should I do?
Bankruptcy is an option and I did see a lawyer, but my wife is on a couple of these debts with me and she has excellent credit. Those are the ones that we are stil currently paying on. He suggested that we would both have to file bankruptcy. I do not want to include my wife. Her name is on our house loan, but we are both on the car, so the lawyer wants to include the car and my wife’s debts. I do not want her to lose the car.
The problem here is the joint debts. If you go bankrupt on the debts the creditors will go after your wife. Her credit will still be impacted since the accounts will appear on her credit report as being included in bankruptcy.
The fact your wife has excellent credit is a bit of a falsehood. The reality sounds like you can’t afford these debts and the only reason you are current on some is because you are behind on others.
Ultimately the car lender does not want the car back, they want the payments. In a Chapter 13 bankruptcy she’d keep the car and you’d make the car payments, you’d enter a payment plan based on what you could actually afford for the rest of the debt and it will stop the garnishment. The downside is that it will hurt her credit, yours is already trashed.
But bad credit can easily be rebuilt and repaired so nothing here is terminal.
My suggestion, go meet with a second bankruptcy attorney and get a second opinion. It will make you feel more confident in your decision. But make sure your wife goes to meet the lawyer with you so you can both get all your questions answered and hear the same information.