Currently, my husband and I are down to 1 income after I was laid off 3 years ago. We live in Southern california…where cost of living is high. Our annual salary is approx $45K.
Due to my lack of work, and some bad spending choices over the years, we have accrued 50K in unsecured credit card debt.
We at this point, can only afford minimum payments, which add up to about $1100 a month, and over $400 of it is going to interest.
Until I land another job…we can’t afford to chip away at our debt. Should we file bankruptcy?
The reason we are considering Bankruptcy is because we soon won’t have enough funds to pay our mortgage or car. We need both of those items just to live.
Also, I want to know if we stop paying our credit card bills…do we have a chance of being sued? I don’t want to continue to make payments if I don’t need to …if we do decide to do the bankruptcy route.
Thanks in advance for all your advice.
The reality is that bankruptcy does seem like a logical solution based on what you shared. But bankruptcy is not all bad news. If you are able to file for a Chapter 7 bankruptcy your debt will be discharged in a few months and you can behind rebuilding your credit.
Bankruptcy is not a financial death sentence.
Let’s start with the basics.
I’d suggest you first read How to Get Out of Debt. The Honest and Unvarnished Truth and The Truth About The Success Rates, Failure Rates and Completion Rates of Credit Counseling, Debt Settlement, and Bankruptcy. They will give you a great overview of what we need to deal with to get you moving in the right direction.
Then use the free How to Get Out of Debt Calculator to review your options.
You may also want to click here to find a local bankruptcy attorney and talk to them as well.
After that, come back here and comment about what seems to make the most sense and let’s discuss that.