Should I file?

[Anonymous]

Im not sure where to start here. I started getting worried about a month ago when I was served a lawsuit from a medical debt.

late last year I had a medical problem that had me out of work without pay for 2 months and I fell way behind on my credit cards. I felt like i was finally getting a grasp on things when covid hit and my income got cut by around 30-40% and now im further behind than ever. Im getting about 10-15 calls from collectors a day. My total Debts are in the range of $10,000- 15,000 I believeand my income is around $50k/yr.

All the debts are under my name nothing has my wife on it. Her credit is good 750+ while mine is in the low 500s. I only have revolving accounts while she has car and home(which we actually sold our house and are in the process of buying another which will lower our monthly costs by around $150). I was able to pay off the debt from what i was served with a chunk of what we got from the sale of our house.

Since my debt is spread out to around 10-15 different creditors Im not able to make the payments on all of them. Ive tried for a loan to consolidate but with my credit and no real collateral Ive not been able to get one. Im not worried about the impact of bk on my credit I would actually feel releived that there would be no new debt and I dont see the need for any others in the near future. I just want some peace of mind that Im not going to come home from work to see someone there waiting to serve me another suit.

Is bankruptcy a viable option here? If so is it common to have to pay an attorney upfront for filing?

[Jnbmom]

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@Anonymous wrote:

Im not sure where to start here. I started getting worried about a month ago when I was served a lawsuit from a medical debt.

late last year I had a medical problem that had me out of work without pay for 2 months and I fell way behind on my credit cards. I felt like i was finally getting a grasp on things when covid hit and my income got cut by around 30-40% and now im further behind than ever. Im getting about 10-15 calls from collectors a day. My total Debts are in the range of $10,000- 15,000 I believeand my income is around $50k/yr.

All the debts are under my name nothing has my wife on it. Her credit is good 750+ while mine is in the low 500s. I only have revolving accounts while she has car and home(which we actually sold our house and are in the process of buying another which will lower our monthly costs by around $150). I was able to pay off the debt from what i was served with a chunk of what we got from the sale of our house.

Since my debt is spread out to around 10-15 different creditors Im not able to make the payments on all of them. Ive tried for a loan to consolidate but with my credit and no real collateral Ive not been able to get one. Im not worried about the impact of bk on my credit I would actually feel releived that there would be no new debt and I dont see the need for any others in the near future. I just want some peace of mind that Im not going to come home from work to see someone there waiting to serve me another suit.

Is bankruptcy a viable option here? If so is it common to have to pay an attorney upfront for filing?

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@Anonymous 

What is the total debt you owe 10 or 15K?

I honestly wouldn't file for that amount, I would just buckle down cut my expenses get a second gig and try to pay off the debt.

[DebtStinks]

I'm leaning toward agreeing with what @Jnbmom stated, but everyone's situation is truly unique. Before I get into that, I'll answer your paying attorney upfront before filing question: Yes, if you file CH7, you'll have to pay your attorney and filing fee upfront before your case can be filed. Reason being is CH7 is considered liquidation and your attorney would then be a creditor if you owed him/her money and then your debt to them would be wiped out when the case is filed. You can, however, include attorneys fees when filing CH13. In this case, you would repay your secured creditors/priority claims with your surplus income over the next 36-60 months.

It seems like, unless you REALLY don't care about the impact of BK on your credit like you stated, that debt settlement and/or a DMP (debt management plan) might be a better option for you. You stated you used some proceeds from the sale of your home...do you still have the 10-15k in debt after that money was spent?

Best of luck!