$47500 in credit card debt, $1000 monthy mortgage, $1000 monthly vehicle payments, then of course insurances, utilities, and general living expenses
Squeezing by we are making it month to month, paycheck to paycheck, still occassionally using the credit cards when things come up – no savings outside of retirement. Unsucessfully searched for more gainful employment over the past year but as you are aware the economy sucks and we are really just thankful to both have jobs. One vehicle will be paid off Jan. 2010 freeing $500 a month and youngest will be out of childcare in May 2010 freeing another $353 a month. As this happens we will be able to pay more towards debt but I still figure on about 5-6 years
Would it be better to file bankruptcy now or continue to tread water and inch gradually toward shore (debt free ground)?
This kind of ranks up there with the question, “How long is a piece of string?”
There is no universal right answer for this situation. My frugal friends would suggest that you should work hard to reduce your expenses further to free up money to save.
On the other hand, an argument could be made that bankruptcy could reduce your monthly obligations and allow you to potentially start building an emergency fund of cash, something you don’t have right now. That’s why stuff winds up on the cards again and marches the balances back up.
Bankruptcy may also cramdown your vehicle loans to current values and again free up some cash.
Bottom line, it certainly does not hurt for you to call a couple of bankruptcy lawyers in your area and find a lawyer that you like. Make an appointment to go in and talk to them about your situation, listen to what they have to say, and then go home and digest the information.
Let me know what you decide to do, and why.