I have $56K in credit card debt between my wife and I. My debt is just over $22k and hers is just over $34k. I earn around $50k a yr and she only earns about $7k a yr. We have 8 kids living at home and an upside down mortgage that we owe about $200k on w/$1300 a mo payment. My CC debt equals about $1340 a mo.
Should I look into bankruptcy or debt management?
Personally I think you should look into both bankruptcy and debt management. I think you should look into everything possible and then, and only then, make a decision about what path is right for you.
Getting out of debt is really 10% technical but 90% emotional. It makes no sense for me to force you into any solution that isn’t going to be both appropriate for you to achieve your goal or that you are not prepared to face.
Let’s take bankruptcy for example, I don’t want you to go bankrupt if you don’t feel it is an appropriate solution for you. And at the same time I don’t want you to discount bankruptcy for fear of how you think you will feel being a bankrupt.
My advice and guidance is always based first on my memories of living through horrible debt and bankruptcy and years and years of helping people in the same situation.
Just based on what you shared with me I am skeptical that debt management is going to be a realistic way out since you only win with debt management if you dig yourself all the way out of debt and that will take 5+ years to do. With eight kids at home the chances of having some unexpected expenses that will through your budget out of wack are pretty high. If that happens it could scuttle your debt management plan and you are essentially back to square one.
The key to your success is to understand how you got in this situation to begin with, and not repeat those actions again. Bankruptcy is a legal option for you and you should schedule a free bankruptcy consultation with a local bankruptcy attorney and go talk about what bankruptcy would mean for you.
What I am most worried about for you Justin is that with either a debt management or bankruptcy approach, your credit cards will be closed and not available to you. If those balances of yours have been used to help make ends meet, you won’t have that tool anymore and you will have to live within your income.
Keep me posted via Twitter at @GetOutOfDebtGuy on how things go for you or post updates in the comments section to this question.