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Should I Quit My Job Before I File Bankruptcy? – Jim

“Dear Steve,

Married 15yrs raising 13 year old. My wife and I have been struggling with credit card debt for quite some time (10-12yrs). All this time, everytime we used credit I had in the back of my head that this is not the right thing to do. We have now decided something has to be done.

We both have good jobs average pay she work 40hour weeks and I work 53 hour weeks. Have been for 14 years, same job, same desk, same two people in here with me. Don’t even have a window to look out of. Anyway, Its a good stable job.

Our debt has been rising about 2K per year, Its now around 25K. Plus my wife is going to school part time, so we had the idea to take out student loans to pay our high interest debt. Which did work to a certain extent, but now we have about 14K in student loans that will have to start paying on preaty soon. We’ve been able to keep up so far.

We have a house payment and one car payment, which are not that big of deal.

My seemingly long hours and stress of making our payments on time along with the insults of these CC companies. (Namely Chase). Has just about gotten the best of us.

We are at the point now where we are ready to close all our accounts, give up the whole credit card thing and get out of debt. I just don’t know now If I will be able to work as hard just to pay this back.

My wife and I, we both work very hard at what we do. I feel like we are in that working class bracket where you make too much to qualify for help, but not enough pay our bills.

Don’t get me wrong, I would like to pay my debts. Its just to what sacrifice I’m willing to go thru. I would have no guilt in filing a chapter as our accounts have been maxed out for several years and I’m sure they have made there principal back. I feel like we’re there best customers…

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A: Should I file a chapter and let the court set our payment high and continue working hard just to pay it out and be broke.

B: Quit my job because of stress, liquidate my assets and file chapter 7. And be broke.

Jim”

Dear Jim,

I definitely don’t think you should quit your job. A positive part of bankruptcy is that if you enter a bankruptcy repayment Chapter 13 plan then your monthly payment will be based on what you can afford.

The best plan would be to approach this in stages. The first step would be to click here to find a local bankruptcy attorney you like. Go and meet with that attorney and get all your questions answered.

After you meet with the attorney you will better understand the protections and benefits bankruptcy will offer you. Those protections from creditors will help to reduce your stress and depression you are feeling now and make life more tolerable.

Once you get the protection of the court with bankruptcy then you can start to look forward to rebuilding your financial life and letting you enjoy a fresh start.

Please update me on your progress by posting updates here in the comments section of your question. I’m very interested in how this works out for you.

morehelp1

P.S. Be sure to read ‘The Secret of Surviving Through Difficult Economic Times. What I Learned On My Journey‘.

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Steve Rhode

Steve Rhode is the Get Out of Debt Guy and has been helping good people with bad debt problems since 1994. You can learn more about Steve, here.

6 Comments

  • Jim,

    What is going to prvent you from going into debt again if the court clears your debts? How would filing bankruptcy change your life? Do you have an agreed to budget with your wife that says how you plan to spend every dollar that comes into your hand? My wife and I use a zero based budget. Doing so has actually allowed us to stop taking on further debt for the last 4 months and made our monthly income go much further than it ever has. I like Dave Ramsey’s book “The Total Money Make Over”.

    What type of lesson would you be teaching your 13 year if you become a dead beat?

    Best of luck.

  • I’m just tring to weight all my options and get my ducks in a row, so to speak. My goal is to be debt free. To me that means nothing revolving and nothing over 10% intrest. Basiclly no credit card bills.
    What I’m asking you is why would’nt it be better to be a deadbeat for about a year, file chapter 7 due to lack of income? Have all my debts forgiven and go about my life. As opposed to keep working as hard as i am, and have to pay the court 30-40% of my wages for five years.
    I don’t want to pay these people no more than I have to.

    These guys set around a board meeting table and think up ways to make money, but what they are inevitably doing is preying on people they know are not as educated to understand all thier rules, in fine print I might add.

    Thanks..

    • Jim,

      That seems fairly dramatic and potentially problematic. You should go and meet with a local bankruptcy attorney and discuss your intended plan and not make any assumptions. You might even qualify for a Chapter 7 right now.

      Steve

    • You certainly recognize the fact that Chapter 13 is legal slavery. The banks got together prior to 2005 and said “we’ve loaned out too much money, juiced the system, and convinced consumers they’d be able to pay it back over time when home prices and wages went up. But we don’t want wages to go up, so home prices can’t keep going up. How do we get paid back”?

      And lo, the answer came in a change in the law, literally destroying the plans of millions of people by saying “surprise! you have too much debt, wages aren’t going to go up, and NOW YOU CAN’T FILE BANKRUPTCY!”

      But when a consumer says “wait a minute the system is rigged. Why work at all if the government and big corporations are going to conspire to take all my future money above basic living expenses?” the banks and government say “waaaaait … that’s bankruptcy planning. And that’s fraud.”

      As if the 2005 law wasn’t EXACTLY the same thing, except in reverse — in favor of the banks.

  • “I definitely don’t think you should quit your job.”
    Why not? Maybe a min. wage job 40 hours a week?

    “A positive part of bankruptcy is that if you enter a bankruptcy repayment Chapter 13 plan then your monthly payment will be based on what you can afford.”
    Yeah but how much can my health afford? I work above average hours in a stressfull job.

    “Once you get the protection of the court with bankruptcy then you can start to look forward to rebuilding your financial life and letting you enjoy a fresh start.”
    I would only see a fresh start when I’m debt free.

    I just feel like we’re in a really bad situation as we are both responsible people. Sometimes I feel like we would be happier just living in a van down by the river. No joke.

    Thank you for your quick response..

    • Jim,

      I assumed when you said you had the same good job for 14 years that you enjoyed the work but with the stress from the debt on top it was making life generally stressful.

      We are never debt free. Even if we don’t have obligations to banks and credit card companies we will always have obligations to others. You might enjoy reading “The Only Thing I Want Now is to Become Debt Free. What’s It Like? – Ray.”

      Do you feel bad about going bankrupt? If you do, there is nothing that prevents you from paying back the amount forgiven latter as you can. But if you opted for the protections of bankruptcy is that something you would consider doing?

      Steve

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