Contemplating filing for Chapter 7, but Im Terrified!!!

[TheFeagster]

I am going to start this by saying that I have been contemplating this move for 2 years now, but I thought that I could handle it on own, but with the interest piling on me, what started as maybe 30k in CC debt has now spiraled into 60k and im DROWNING, so this feels like it is the best thing to do. I am in the midst of looking for lawyers, if anyone knows a good one in PA, I would love to take a recomendation! I think I did not file because I was being pride, I am 32 with 3 children and I am Married, and I felt like I could "handle it". I didn't want this to affect our husband, children, or our new home. I think sometimes I get really depressed and this was my coping method. My parents died within a year of each other and I started feeling really hopeless and that triggered even more spending, because it makes those dopamine levels feel "great" in the moment...... I also legit think I have always had ADHD, but I mask it with the fact that I am a high efficient performer. I am getting therapy and I have mostly gotten my spending under control, but now I have the burden of this interest and debt.

I make about 80k with my small business and income, but with the number getting higher and higher im robbing peter to pay paul literally every week. 

I am upset because I am going to burn some MAJOR players in this BK. I have three Amex Cards, Discover, 2 Navy Federal, NavyFed LOC, Cap1, Home depot with Citi, Penfed.......... When it is time to rebuild, will there ever be an opportunity to re-build effectively with any of them?

I am an Authorized User on my husbands NavyFed and his Amex cards, will that be an issue if I go itno BK with mine? I read a couple of posts that stated that it shouldn't be an issue, but i just wanted more opinions. Wish me luck, researching and contacting attorneys today 

[anniea4001]

@TheFeagster as someone who delayed filling for BK for almost 3 years, I can tell you that I wish I had filled sooner.

With that being said, filling BK will mean nothing if you cannot get your spending habits under control. This is probably the first thing you need to work on. Based on your post, I would be more concerned about this if I was you, than with what lenders you are burning or you can rebuild with. 

As far as I can tell from my research, certain lenders will never let you back in unless you pay them in full. Other lenders will not extend you credit as long as the BK is showing on your reports and others will let you back in as soon as 6-12 months after. 

You can certainly get credit again after BK, Maybe not with all the same lenders but it can be done.

[TheFeagster]

Yes, I have been doing better at budgeting and sticking to my budgets. I don't really impulse buy any more, and I have been working through my issues in therapy that I have been in for about a year. A work in progress but significantly better than I was. 

I do know rebuild is possible and honestly I wont prioritize rebuilding so that I can have large amounts of credit again, just enough to get to a respectable score and have a good financial cushion

Thank you for your response!

[anniea4001]

@TheFeagster I am glad to hear you are making progress.

I can tell you that I have more credit now that I did before BK. Which is shocking to me. Of course, I understand credit better now.

Just take the rebuilding slowly and select carefully the accounts you want to rebuild with. 

I can tell you that CapOne is one of the easiest to get back in with. Just give it a year from the time you defaulted on your previous CapOne account. For me, my CapOne accts were closed back in 2015-2016 so as soon as I was discharged from BK I was able to apply. 

Also, use the prequal links as much as you can, those are very helpful. 

As far as scores, I have seen great improvements in just these 8 months. I keep my utilization low at all times and pay before the statements closes. I never thought my scores would be this high so soon after BK. 

I say this to illustrate it is possible. 

If you budget yourself and rebuild carefully, I am sure you will be in a much better place by this time next year. 

[TheFeagster]

Thank you! I appreciate that!

[MileHigh96]

Is your only account with PenFed the $500 LOC that's listed in your sig? And if so, what do you owe on it? If you could get that paid off before you file and close the account, then you could get back in with them after BK. You can't show preference to any creditor, but so long as you don't pay any creditor more than $600 within 90 days of filing, you should be okay.

[TheFeagster]

My signature isnt updated, so I'll list my cards here:

$500 LOC PenFed

$3500 CC PenFed

$4000 Amex Delta 

$1000 Amex Hilton 

AMEX Gold NPSL

Navy Fed GoRewards $20k

NavyFed Cash Rewards $15k

NavyFed LOC $8k 

Affirm $2500

Old Navy $500

Target $500

Capital One $2k

Discover $1k 

Barclays $1k 

[TheFeagster]

Also I actually haven't been late on ANY of them yet, I have been literally paying the min amount and some of them are over limit b/c of all of the interest. 

[Guyatthebeach]

TheFeagster,

I was in the same position you are in now. All of us have.  From my point of view, you are definitely trying to make it work.   Before you throw the towel in, why don't you look into credit counceling?  They may have some options available to you.  

In the event you do decide to file bankruptcy, life will be fine and so will you.  There are other credit unions that offer the same services and have great customer service like NFCU, and there will be life after Amex.

This month marks my tenth anniversary since filing chapter 7 and I bounced back in a few years.  If I can do it, so can you.

Guyatthebeach

[Kasuito39]

I agree with most comments. Explore and exhaust all options first before applying where feasible. Amex and NFCU are among the best but there are thousands more favourable lenders out there if you put in the work that you can leverage even with BK 7 reporting. Consolidation, additional income, CLI are a few strategies that can help. 

Good Luck!