Looking for some Advice

[Anonymous]

Hi all, 

New to the forum and have been reading a ton of threads about BK/debt relief programs and wanted some input from people that may have more knowledge then me. 

I am 25 years old and currently make 55k a year (about 3,400/mo after taxes). From my own mistakes I have racked up about 36k in credit card debt over the last 3 years spread over 7 credit cards (Chase Sapphire, Chase Freedom, Discover IT, Capital 1 Quicksilver, Amex Blue Cash, Amex Silver Everyday, Citi Diamond). I am recently married and starting to think long term, hoping to buy a house and be finanically sound so we can start a family. I find myself paying typically the minimums every month (toal about $1,000) of that about $650 goes straight to interest leaving only about $300 towards principal (spread out between the 7 various cards). I have never missed a payment, I currently am on a strict budget and in a way living paycheck to paycheck with minimal breathing room. I have a second part time job that gets me anywhere from $200-$400 extra a month. I am trying to get ahead but am putting all I can towards these CC payments and feel like I'm getting no-where.

Given my current situation and my age, I am really torn as to what to do. Is BK an option - possibly Chapter 13? Should I do some debt relief program? I have tried to get personal loans but I've gotten denied from everyone (score is too low around 550-600). I am just hoping to hear some opinions/advice as to what my next steps could be. Apartment rent is $1200/mo and car payment is $500. 

Thanks in advance for any responses. 

[Anonymous]

What I would do is reall look at your budget and see if you can make it work. From what it looks like, you should have money available to pay your debts. If you decide to file bankruptcy, you will probably qualify for a Chapter 7, but you'll have to run the means test for your own circumstances. 

As far as your budget goes, if my estimates below are accurate and you take home $3600 after taxes, it looks like you have a balanced budget (not accounting for entertainment, savings emergencies, etc.).

Rent	$1,200
Car	$500
CCs	$1,000
Gas	$150
Food	$400
Utilities	$150
Personal	$100
Insurance	$100
TOTAL	$3,600

What you may want to consider doing is working with a credit couseling agency. They will negotiate lower rates on your credit cards (around 7%) and handle the payment for you. So it's like getting a loan, in that you make one payment to them. The downside with this is that all the cards will be closed, and the accounts on your credit report will be notated as "managed by credit counseling agency" which may prevent you from getting additional credit. Under this plan you'd be making roughly $715 in payments vs. $1,000 and your debts would be paid off in 5 years.

If you file bankruptcy, you will not be able to get a mortgage for at least 2 years. If you don't file bankruptcy, you may not be able to afford a mortgage until your credit cards are paid off. That's my two cents.