I was laid-off 4 months ago and have been unable to get a job so far. I’m 63, no savings, no retirement. Before i was laid-off we had difficulty meeting our financial obligations. We had asked 2 of our credit cards for hardship help; they closed our accounts, lowered interest rate and payment. Now that I’m unemployed i’m receiving unemployment pay (CA) and my wife receives monthly SSI for disability. Unemployment and SSI only covers our basic bills for rent, housing expenses, medical premiums, a monthly tax payment and a term life ins policy. We have $120 left over for food, gas, meds. Not being paid are 4 credit cards (total balance ~$29000), Dental and medical bills (~$5500), $2100 borrowed from friend and family.
Wife wants to declare bankruptcy; I’m ashamed to do it. I want to do Debt Management but don’t think I can because of no employment. What can I do? Other options?
Your feeling of shame and embarrassment may be rooted in feeling that somehow you have cheated your creditors or not honored your word. That’s normal to feel that way. But the complexities of the feelings that make our emotions so intense and raw in these situations is difficult for many people to process and achieve clarity.
In your particular situation bankruptcy might make sense in order to terminate the collections chasing, threats of being sued and demands for payment that you simply can’t make. There is a great emotional benefit from not constantly being under barrage by others. If you want, you can click here to find a local bankruptcy attorney and talk to them about bankruptcy.
Based on what you’ve shared it does not sound like you have any assets for creditors to go after so some may say you are “judgment proof” but that’s not exactly right. People who are called “judgment proof” still get sued and have judgments issued against them, there just are no assets or income not based on benefits that creditors can go after. In order to make sure you would fall under this situation you’d need to talk to a licensed attorney in your state.
I understand you are beating yourself up about this current reality but I seriously doubt that you set off on a course to find yourself in this position. I also doubt you devised a plan to borrow money that you would not be able to repay. In a way, the blame you are casting upon yourself right now is much like that of a farmer that borrows from the bank for seed, he plants it, and it does not rain for a whole year. Is the farmer a failure or do circumstances outside of his control just make it an unfortunate event?
Many people don’t understand that just because you file bankruptcy to get the legal protections from creditors available under the law it does not mean you can’t still repay your creditors for any moral reason. In that case you receive legal protections and still honor your promises when you can. Isn’t that the best of both worlds?
Guilt and depression can paralyze you from taking some action to resolve debt. That just leaves you suffering for far longer than you need to.
In your particular situation I am more concerned about how you are going to be able to make ends meet moving forward. You are already not paying the cards and still just barely living.
If you have not done so already, you should check to see what government benefits you may be eligible for to help get through the month.
It is just my opinion but rather than feel ashamed about the debt situation you may just want to realize that it is what it is and deal with it one way or another. The bigger issue seems to me to be using all your energy to make things better moving forward and worrying less about the past. You can’t eat the past.