A little backstory. My husband and I have three kids. I stay at home with them and my husband works full time, but only brings home about 2400 a month.
Two years ago I worked hard to build my credit up from scratch, acquiring a lot of credit cards with great limits and using them very responsibly. My scores were near the 700s. I was helping my husbands credit as well. Well of course we hit some tough times and had to rely on the cards much more than I wanted to. The interest rates on them were high so the minimum monthly payment was high, but I kept up with the payments before paying a chunk of the debt down when we got our tax return this year. Two cards still remained maxed out and when I missed a day while my husband and I were going through the mortgage process (his loan, I'm just on the deed) the minimum payments skyrocketed to 400 bucks each. Which there was no way I could afford so I had to let those cards go to collections. It was devastating.
I've been keeping up with all other payments since but now our paid for car died on us and my husband had to finance a used car, since we don't have the money to pay cash for one. The lowest monthly payment we could get is still high for us and between that new expense plus the higher insurance, there is no way I'll be able to continue to pay my cards. I feel horrible but there are no options. We only have the one car with the three kids, so I can't work. I've researched bankruptcy and it seems I could do a chapter 7. I'm just conflicted. I'm embarrassed and feel awful it's at this point.
I won't be able to file until February when we get our next tax return, so I guess my question is, should I still set up a consultation with a bankruptcy attorney? Am I at risk for being sued in the meantime? I'm mostly judgment proof as it stands. My husband has his own bank account where his direct deposit goes, mine only receives child support. I'm on the deed to the house but it's homesteaded. The car is in his name only.
Any input is extremely appreciated. This is definitely not a situation I ever thought I'd be in.
Two years ago I worked hard to build my credit up from scratch, acquiring a lot of credit cards with great limits and using them very responsibly. My scores were near the 700s. I was helping my husbands credit as well. Well of course we hit some tough times and had to rely on the cards much more than I wanted to. The interest rates on them were high so the minimum monthly payment was high, but I kept up with the payments before paying a chunk of the debt down when we got our tax return this year. Two cards still remained maxed out and when I missed a day while my husband and I were going through the mortgage process (his loan, I'm just on the deed) the minimum payments skyrocketed to 400 bucks each. Which there was no way I could afford so I had to let those cards go to collections. It was devastating.
I've been keeping up with all other payments since but now our paid for car died on us and my husband had to finance a used car, since we don't have the money to pay cash for one. The lowest monthly payment we could get is still high for us and between that new expense plus the higher insurance, there is no way I'll be able to continue to pay my cards. I feel horrible but there are no options. We only have the one car with the three kids, so I can't work. I've researched bankruptcy and it seems I could do a chapter 7. I'm just conflicted. I'm embarrassed and feel awful it's at this point.
I won't be able to file until February when we get our next tax return, so I guess my question is, should I still set up a consultation with a bankruptcy attorney? Am I at risk for being sued in the meantime? I'm mostly judgment proof as it stands. My husband has his own bank account where his direct deposit goes, mine only receives child support. I'm on the deed to the house but it's homesteaded. The car is in his name only.
Any input is extremely appreciated. This is definitely not a situation I ever thought I'd be in.
I would definitely go talk to a bankruptcy attorney to get information. The place I went had a free consultation. I'm assuming most places do. I have always been responsible with my credit so when I had to file earlier this year, I was devastated. I was scared to death and very ashamed. It took everything in me to make the appointment to talk to a lawyer. I felt so much better when I walked out of that meeting because I got so much useful information. There are so many questions when you consider filing and the attorney answered all of mine and put my fears to rest. I was still nervous throughout the process but knowing I could call them at anytime made it better. It's nice to have someone on your side ya know? I of course thought my situation was the worst ever but they didn't blink an eye....lol I was discharged last week and I am already on the road to starting over which feels great. Now I feel silly for all the worry and sleepless nights it caused me. It can't hurt to go talk to someone. You'll feel better. Good Luck! 
@Anonymous wrote:
I would definitely go talk to a bankruptcy attorney to get information. The place I went had a free consultation. I'm assuming most places do. I have always been responsible with my credit so when I had to file earlier this year, I was devastated. I was scared to death and very ashamed. It took everything in me to make the appointment to talk to a lawyer. I felt so much better when I walked out of that meeting because I got so much useful information. There are so many questions when you consider filing and the attorney answered all of mine and put my fears to rest. I was still nervous throughout the process but knowing I could call them at anytime made it better. It's nice to have someone on your side ya know? I of course thought my situation was the worst ever but they didn't blink an eye....lol I was discharged last week and I am already on the road to starting over which feels great. Now I feel silly for all the worry and sleepless nights it caused me. It can't hurt to go talk to someone. You'll feel better. Good Luck!
Thank you so much for your input!! I'm so glad to hear you had an easy process and you're on the other side of it now! I bet it's a huge relief. It's definitely a rough spot to be in but it's great knowing you're far from the only one. I feel a little relieved already actually haha. I actually found an attorney relatively close to me who seems great so I'll be calling him when I get a chance. His website says you can start the process for 50 dollars, I'm just not sure how exactly that will work since I can't pay the rest for about five more months. I guess I'll be finding that out haha.
@Anonymous wrote:A few questions:
1. Do you live in a community property state?
2. Will your husband be filing?
3. Why do you need to wait until February to file? Do you need your tax refund to pay for the filing fee and/or your attorney?
4. When you say "mostly" judgement proof, what do you mean by that?
5. What did you do with the old car? Did you trade it in and apply negative equity to your new loan?
6. When was the last time you purchased something with your credit cards? Was it a large amount?
And now some thoughts:
You are at risk of being sued for debt that you don't pay. Usually creditors will not sue until after charge-off, which is typically after 120 days of deliquency.
In addition to the above questions, it's hard to tell if bankruptcy is your best option without having information about the debt you wish to discharge. How much do you owe in unsecured (credit card) debt? I'm guessing about $30k? Also, if you didn't trade in the old car, what do you plan on doing with it? Surrenduring it?
No problem!
1. Nope, I live in Florida.
2. No just me. All the cards are in my name, he's just an AU on a few.
3. Yes I have to wait until my tax return, unfortunately.
4. I mean as far as I know I am haha, I've done research about what makes you judgment proof but I'm still not an expert on it. I don't have an income besides child support and that's exempt, my husband has his own bank account now where his checks go (I did that recently in the event they sued me before I could file), and even though I'm on the title of the house it's protected with the homestead exemption.
5. The old car was traded in when my husband bought the new one.
6. I just had to charge over 1,000 a couple weeks ago to one for a new fridge when ours broke unexpectedly.
The debt is around 27,000 including the cards I previously let go. I need to calculate the exact amount but that's where it should be now.