My husband has lost his job twice in the last 2 years. The first time it only took him 1 month to find a new job, so we recouped pretty quickly. The second time (which was just in February 2010) it took him 5 months to find a job. His new job includes a $10K reduction in salary and with higher commuting costs. We went through a very difficult time and we subsequently went through all of our savings pretty quick. (which wasn’t much to begin with). Also adding that during this time, we had two very expensive vehicle repairs. When it rains it pours!!
Because of the above situation, we stopped paying on our biggest credit cards. We haven’t paid any of them in almost a year now. It came down to putting food on the table and a roof over our heads or pay them their minimum payments. We had no choice. Just recently my husband received a letter from his employer stating that they had received a wage garnishment request and that they would begin to deduct a very substantial amount from his paycheck to meet those requirements. This amounts to almost $800 a month!! Turns out that this is one of those Credit Card companies. In panic, my husband set up an appt to meet with a bankruptcy attorney. There is no way that we will be able to pay our regular bills, light, gas, phone, etc… with such a drastic reduction in salary. We were told that we didn’t qualify for chapter 7, but that we qualified for Chapter 13. Which is fine, it’s our debt and we want to pay it off. I also know that our cred it scores are rock bottom already. (Very low 400’s, It’s embarrassing.) I’m torn between taking this route (bankruptcy) or joining a Debt Consolidation program. I know that I can’t change what’s already done, but I want to prepare for the future. We are afraid of what bankruptcy will do for us as far as getting vehicle loans, new jobs, in the future. The bankruptcy attorney also stated that the monthly payment under chapter 13 must be a wage garnishment agreement, disclosing to the employer that you have filed for bankruptcy. Is this the normal procedure? What are your suggestions.
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