Recently divorced and left with about $40,000 in credit card debt due to helping my ex-husband start his now lucrative company. I’m not bitter! I am drowning here now, however.
It’s about ten credit cards with APRs spanning from 14% all the way up to 29.9%. I can only barely afford the minimum payments and realize that every month the debt grows due to the interest.
My credit limit is basically maxed out. I saw a bankruptcy attorney who informed me that I only qualify for Chapter 13 as I receive child support and alimony in the total sum of $6,000/month for the next two years therefore my income is too high – even though I can not afford to pay this debt down at all.
I attempted to secure a personal loan and as you know that is impossible. I’ve researched credit consolidation and can’t work with Lending Tree bc of my now bad credit score which is probably around 500 if not worse.
Finally, I decided to simply default on four of the worst cards. It’s been three months. These cards have high interest rates and the interest is about $78-$98/month on each one! I am attempting to negotiate with the cards myself as they call me at least three times per day.
I explain to them I will simply default if they do not work out a “hardship” program with me and they tell me I do not qualify and goodbye.
Several times I’ve been hung up on when I’m only trying to work out a deal. I assume this is because they would make more money by selling their debt. Tell me why the big banks get bail outs and I can not? I wish I had an answer.
What is the best option? Bankruptcy, a miraculous credit consolidation, simply default, or continue to pay only the minimum payments and watch my debt grow until I find a job?
Considering the fact you are already delinquent on some of the cards and it appears unlikely you are going to be able to “pay your way out” of this debt I think you should get a second opinion about the bankruptcy.
But even if the child support payments push you into a chapter 13 bankruptcy, the chapter 13 bankruptcy has some advantages. It will stop you from getting collection calls, being sued, or having your wages garnished.
Additionally, it is my understanding that while the child support payments count as income, they are not factored in to what your payment would be. So you would get 100 percent use of the child support payments for the kids and your chapter 13 payment would be based on your income alone.
So weighing the responsibilities to care for the kids, have a chance to save and create an emergency fund and prepare to do better moving forward, then I would say that even a chapter 13 would make sense to relieve the pressure and give you a chance.
Bottom line is you can intervene and alter your path or keep doing what you’ve been doing.
You can click here to find a local bankruptcy attorney and talk to them for free about your specific situation. Get the facts and then you can make an informed and educated decision if bankruptcy is right for you.
Bankruptcy Articles and Posts You Must Read
To get ready to read the information below with the right frame of mind, please first read How Do I Get Out of Debt Quickly? Change Your Mindset.
- Those That File Bankruptcy Do Better Than Those That Don’t
- How to Know if You Should File Bankruptcy
- So You Are Going to File Bankruptcy. That’s Great News. Congratulations.
- Easily Rebuild Your Credit After Bankruptcy
- The Truth About Bankruptcy Success Rates
- How to Get Out of Debt Calculator
- How Avoiding Bankruptcy Can Backfire
- How Long After Bankruptcy Can I Buy a House?
- Is Bankruptcy Sinful and Bad or Right and Moral? An Examination
- What Does the Bible Say About Bankruptcy? Is Bankruptcy Scriptural?
- How to Get Out of Debt. The Honest and Unvarnished Truth
- The Emotional Seven Stages of Debt
- Getting a Job After Bankruptcy
- Chapter 7 Bankruptcy – What is the Truth?
- Low Cost / Pro Bono Bankruptcy Resource Locator
- Bankruptcy Should Be the Last Resort Many Say. But That’s Just Not True
- The Ethical Considerations of Bankruptcy
- Is Bankruptcy Right For Me?
- 14 Reasons You Should Not Avoid Bankruptcy
- How to Really Discharge Your Student Loans in Bankruptcy. Many Can. But Never Try.
- Life After Bankruptcy: How to Quickly Have Great Credit and Dumb Mistakes to Avoid
- How to Find a Great Bankruptcy Attorney
- You Have Not Failed if You File Bankruptcy
- The Saddest Avoidable Mistake People Make When Getting Out of Debt
Life After Bankruptcy
- How Long After Bankruptcy Can I Buy a House?
- How to Rent a Lovely Home or Apartment After Bankruptcy
- Life After Bankruptcy – The Truth
- How to Easily Rebuild Your Credit and Have Good Credit Again After Bankruptcy
Filing Bankruptcy Yourself
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