Over my head.....is BK right for me?

[simi_go]

So I have been considering BK, just thought I would put it all out here and get some advice.

Current dept

CC Debt - $ 9k

Personal loan - $15k

Auto loans - $30k

I bought a 2008 335i in July of last year when I could afford it.  But situations have changed.  And now on top of the fact that I can not afford it anymore, I have a $7k repair that needs to be done. 

My income has taken about a $15k hit, and just keeping up with this is now something that I can no longer handle.  So is BK right for me?  Or is there something else that I can do?  BTW Navy Federal holds almost all of my debt.  Hate to have to burn that bridge but I don't see any other way.  Any advice would be appreciated.

[0REDSOX7]

Only a licensed BK attorney would be able to tell you that a BK is right for you - as well as if you qualify for it.  Without knowing your actual income, it would be hard to say if it was a straight qualification, or a qualification trhough the means test - which again, a BK attorney would be able to do for you.

Most reputable ones will allow for a free consulation - might want to take them up on it and see what they say.

Should you proceed with a BK or any other alternative, we are all here to support.  We have been in your shoes and have tips to get out once it's over.

Hope that helps!

[simi_go]

My income is only about 33K now and I definately pass the means test.

[0REDSOX7]

I am not going to say that yes, you should def. do a BK, but that is not my place.  But for me and my family, it was the best decision we made (financially).  Yes, it was stressful, but, am well on my way to rebuilding now.

[SoulMaster]

Simi - 

Here's an old post I wrote about avoiding bankruptcy... if you can, avoid it.

http://ficoforums.myfico.com/t5/Bankruptcy/Bankruptcy-amp-Credit-Scores/m-p/1259627#M8730

The last 3 paragraphs in-particular are what are really important to your situation.  The math here is that you've actually got about $34K in debt that will settle for around $10K.  Would you file BK for 10K?   (Note:  The 30K for your car is probably only 10K, you're only liable for the difference between what you owe (30) and what it sells for @ auction (guessing 20)... the 10 can be settled for 3).

You're in a nasty rough patch, to be sure... but if you can avoid the BK it really is the best thing to do.  Might want to grab yourself a copy of Total Money Makeover by Dave Ramsey and give it a read.  Even if you settle your debt, rather than follow the snowball, it's got some really good advice in it.

Good luck,

-SM

[0REDSOX7]

I seriously wish I read that article before I filed. Holy moly. Granted I had the lawsuits and garnishments coming, but, wow.

[SoulMaster]

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@0REDSOX7 wrote:
I seriously wish I read that article before I filed. Holy moly. Granted I had the lawsuits and garnishments coming, but, wow.

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You have no idea.  I've seen worse since I wrote that.

-SM