40k in CC debt, considering Bankruptcy...Please help!!

[Anonymous]

Hey everyone. I just want to thank you in advance for your help. For months I've been debating what to do about bankruptcy. I have about 40k in credit card debt/personal loans through banks. I also have a car I am paying off which I want to keep, and 35k in student loans (which I know can't be charged off). I'm a newly single mom and trying to get myself on my feet. I had paid all of my bils on time up until 2 months ago. My credit score dropped to 470 this month because of my debt and late payments. Before that it was around 590 because of my debt, even though I paid it on time each month.

My question is, is bankruptcy worth it for me? I am able to start paying my debt again, but only the minimum payment each month. It doesn't seem that paying on time is helping my score at all, and I really could use the extra money to start a life for my son and I. If I pay my minimum debt payments each month, I barely have any extra at the end of the month. Payments right now are about $1200 a month if I only pay the minimum payment.

I'm really looking for a chance to start fresh, but I also don't know what in the long run will be better for me. I appreciate all advice.

[sarge12]

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@Anonymous wrote:

Hey everyone. I just want to thank you in advance for your help. For months I've been debating what to do about bankruptcy. I have about 40k in credit card debt/personal loans through banks. I also have a car I am paying off which I want to keep, and 35k in student loans (which I know can't be charged off). I'm a newly single mom and trying to get myself on my feet. I had paid all of my bils on time up until 2 months ago. My credit score dropped to 470 this month because of my debt and late payments. Before that it was around 590 because of my debt, even though I paid it on time each month.

My question is, is bankruptcy worth it for me? I am able to start paying my debt again, but only the minimum payment each month. It doesn't seem that paying on time is helping my score at all, and I really could use the extra money to start a life for my son and I. If I pay my minimum debt payments each month, I barely have any extra at the end of the month. Payments right now are about $1200 a month if I only pay the minimum payment.

I'm really looking for a chance to start fresh, but I also don't know what in the long run will be better for me. I appreciate all advice.

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Sounds like a classic case of being way overextended. Your number 1 priority should be providing for your son, and paying only the minimum monthly payment on all this debt is a long road to nowhere as the balance will never come down. You will just be paying interest to kick the can down the road. Where is the babies father? He needs to be held responsible for his son. I would suggest you consult a BK attorney, but you also do not need to allow the father of your son shirk his responsibility. You are usually able to keep your car in a bankruptcy by continuing to make the payments.

[Anonymous]

That's exactly how I feel, overextended. My son's father does help but that just covers cost of daycare.

[Anonymous]

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@Anonymous wrote:

Hey everyone. I just want to thank you in advance for your help. For months I've been debating what to do about bankruptcy. I have about 40k in credit card debt/personal loans through banks. I also have a car I am paying off which I want to keep, and 35k in student loans (which I know can't be charged off). I'm a newly single mom and trying to get myself on my feet. I had paid all of my bils on time up until 2 months ago. My credit score dropped to 470 this month because of my debt and late payments. Before that it was around 590 because of my debt, even though I paid it on time each month.

My question is, is bankruptcy worth it for me? I am able to start paying my debt again, but only the minimum payment each month. It doesn't seem that paying on time is helping my score at all, and I really could use the extra money to start a life for my son and I. If I pay my minimum debt payments each month, I barely have any extra at the end of the month. Payments right now are about $1200 a month if I only pay the minimum payment.

I'm really looking for a chance to start fresh, but I also don't know what in the long run will be better for me. I appreciate all advice.

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Laura,

We've all been there. Sounds like BK might be worth speaking with an attorney about and getting their take on it.

To me, I think it would suit you to file. Your scores are very low and as the other poster stated, just paying the minimum due each month is only prolonging the debt.

If you have a car that you want to reaffirm that is cool but the loans and CC debt I personally would get rid of it and get a fresh start.

[Anonymous]

Thank you, that's what I keep thinking but I wanted more prespective before I make sure a huge decision. I just want to do what would be best for my son and I long-term.

[sarge12]

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@Anonymous wrote:

Thank you, that's what I keep thinking but I wanted more prespective before I make sure a huge decision. I just want to do what would be best for my son and I long-term.

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In your case, making minimum payments may just be a delaying action at best. In spite of what some would have you believe, there is life after bankruptcy. It is not easy, and admittedly embarassing. Many here, including myself, have been there and done that. Talk to a good BK attorney, and the sooner the better. If you file, consider it a second chance and handle your credit very responsibly in the future. My scores have been around 800 and higher for years, so that proves your credit score can recover from BK!

[Anonymous]

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@Anonymous wrote:

Thank you, that's what I keep thinking but I wanted more prespective before I make sure a huge decision. I just want to do what would be best for my son and I long-term.

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I know the feeling.

Before I filed I was on the road to marriage, 2 kids of my own (2 from her also) and just wanted to get life back on track as best possible.

It wasnt easy to make the decision but after finding this forum it made me open my eyes to ALOT!!!! Stay here, ask questions throughout your process, read old posts and you will gain so much more knowledge about credit.

I am a week in since my discharge and yea its pretty rough right now BUT I have started a few things that within 3 months will help me build credit and get me on the right path.

Find a good attorney (not all are good) and see if it works for you

[Anonymous]

My husband and I in July filed on about 80k of debt. We were in the same situation as you where we got back on our feet enough to pay the minimum or pay a little more on one card and the min on the others. We figured it would take us at least 10 years to pay everything off, at the current balances not counting interest. It was SUCH a relief to  file, and to start over. My credit has increased over 100 points, my husband's almost 60 since we filed. Think of your family and what's best for you. BK is there for people who need it, not people who will abuse it like they did before the reform. Don't feel bad about filing, it is really a big relief.

[Anonymous]

Hi Laura! I'm a single mother of three; my moment of clarity was the realization that my oldest would be starting college in four years and due to my credit, I would be in no position to help her, other than what I saved for the kids' college educations! My situation came about from divorcing a financially and emotionally abusive narcissist; lots of lessons learned here for sure...

My point is that I struggled with the decision to file; I was so ashamed of where my had choices led me! BUT for me taking control of the situation was so empowering and I wish I had done it sooner.

My BK isn't discharged yet (should be next week) but I've been working on cleaning up my report. I started with the following: EQ 505/TU 497/EX 480. I'm now at EQ 641 (nope, not a typo) TU 560/EX 589!

See Soulmasters BK to 700 thread for guidance. It seems to work!

Be well and good luck--youve got this Momma!

[Anonymous]

Wow thank you! This gives me hope. My husband most definitely was a financial mess. Spending hundreds a week on stuff I don't even want to say...forcing us to use credit cards (in my name) to make up for it.