First and foremost - breath. You are going to get responses from people that tell you no way - do not file bk; file it - get rid of the stress; see a debt counsler; negotiate lower rates with your cc; cut back every where you can. But in the end you will need to decide what is best for you and your family as a whole.
First look at the facts:
Bk is not easy and it sticks with you forever. Your husband thinks that all this debt is just going to go away and then that money that went to the debt can go towards savings or more "stuff". News flash. You may not be able to qualify for a 7. Based on your post, the two of you make $90k a year. You may be forced into a Ch. 13 , if they count his income for anything, which forces you to pay back your debt for a period of 3-5 years. And this monthly payment isn't small by any means (and you turn over any tax refunds for the first 3 years). At the end of 2005 when the BK laws changed, they made it no so easy to just go and file bk to get rid of debt. You want/need a new van - bk will mean you probably can't qualify for financing, or depending on when you buy, you'll have a very high interest rate. You want/need more room - when you file bk you need to wait two or more years from the date of discharge to qualify for a mortgage loan (with most loan types) and then again, you'll have a high interest rate. In a 13, I believe you can begin applying for loans (with approval from your trustee) after a year of on time payments (but that may be two years as well, sorry.) Student loans are not dischargeable in bk so you will still owe those no matter what. You are going to tank your credit history. And with the credit world in the mess it is now, getting/re-establishing credit ti going to be very difficult if not impossible.
If you can cut things here and there like you mentioned in your post and work a little more and avoid bk then that's the way to go. Have you contacted your student loan servicers to see if you can get a forebearance on your sl's? If so, maybe for that year of forebearance you can use that money to work on bringing down you debt.
My husband and I, after weighing all the options at the time, did end up filing for a Ch. 13 Bk in 2004 (after my son was born. medical bills galore, and lots of missed work). It was not an easy choice by any means. But in the end it was the best choice for our family, we were always going to struggle and would never get ahead, and money would always be TIGHT. I can't tell you how much stress disappeared after that. But we really stuck to our guns after our BK and watched our finances and vowed to not get into that situation again. It doesn't sound like your husband really learned from his bk. I assume that not all of that debt you listed is only there because of you. It sounds like you've done everything right. You could at least consult with a bk atty and see if you would qualify. Good luck to you!
@Anonymous wrote:
I know the next step is to talk to an attorney, but I just worry that when I do, they are going to convinvce me that BK is the way to go, just so they can collect my attorney's fees. Does that sound cycnical?? That doesn't sound cynical at all. Just an FYI though, in bankruptcy, attorneys are much more restricted when it comes to collecting attorneys fees. You can actually thank your government for that one. And a good bk atty will not make it sound like it is your last resort and most will offer a free consult. Shop around for a bit until you've gathered some professional opinions and then maybe you'll be better able to decide what course is best for you an your family.
Either way, I am obviously stressed out! Thanks for the support!! Your most welcome! I know it's easier said than done, but don't stress so much, it's only money and your family is what matters most (but you knew that already
).
@Anonymous wrote:Depending on how cool you and your husband are under stress a very good option is to just not pay your credit cards. Let them call and squawk and hassle you but stay cool. The debt reduction companies are a farce. They offer 40-50% off your debt and that is it. By doing what i just said, credit card companie's, who are now depserate to avoid collectin zero on your debt will offer 50% off your debts by just letting them wait for 6 months.
Let them eat crow and settle for 50% or less. We made no contact and they were begging for her to settle for 50% on the dollar. Imagine if we made contact and tried for a better settlement.
That's not an incredibly bad idea, but if going that route, why wait until all the cards are in default and late fees and added interest are included? Why not call the companies up, say you are considering bk and offer a 50-60% settlement? At least that way you won't have a ton of late payment and collection notations on your credit reports. And offering 50-60% now will probably save you more money because you won't be settling the inflated amount of debt after the extra late charges and such.
