To Bankruptcy or To Struggle? That is the question.

[princessminor]

So the huband and I are in deep, way deep!  It's primarily my fault and so I feel guilty (confessions of a shop-a-holic).  I have been able by the Grace of God to pay all our bills, but it's getting harder and harder.  After all is paid (more than 20 cards), we have to use the cards for the cell phones, directv and liberty mutual, so we're not catching up, but getting deeper.  Hubby just recently hit with a summons for unpaid personal loan that we couldn't keep up with.  Afraid of wage garnishing next or bank freezing.  Is Chapter 7 the only option for us.  My oldest card is from 1997 and I've never missed a beat on any of the credit cards payment.  They are all current and we just got increases without even asking.  Should I apply for hardship and see if that gives us an edge?  Should we both file or just one of us?  If only one files, we'll have an addition $220.00 after all paid monthly. Can we close some cards and pay less than the min?  Is that another option?  Do you need an attorney to help file for the big B?  Is the process painful much?   Any and all help is greatly appreciated!!  You guys rock!! Thanks in advance.

[Anonymous]

Hard to say without listing out your income, living expenses and all of your debts & credit limits. Do that and you will get some good advice from folks here.

[princessminor]

Thanks SteelerNYC

Mthly income is: $5,223.00

Living expenses: $2,675.00

$6,405$862.83 and $355.64$1,008.24$3,138.36$1,194.49 and $3,132.52$1,253.33 and $671.74$2,520.76 and $4,153.48$2,088.56 and $2,195.25$250.03$2,263.71$4,573.95$4,031.42$3,867.65 and $2,282.14$4,308.62$6,987.76 and $2,320.51$2,560.85 and $2,422.11$6,010.98$1,461.10$1,141.51 and $996.23$2,942.20, $2,248.95, $6,182.74, $920.55, $1,786.34$236.14$3,475.92$2,976.60$6,405.56

utilization is at 80% on most of them.

[Anonymous]

so basically $100k of CC debt on $63k/year in income if I'm reading that right

what is the breakdown of the $2675 month/living expenses? any room to save in here?

I will say that if you choose to file that both of you may as well pull the trigger and make it a totally fresh start. I think the eradication of the debt is more important than one of you not having a BK on your report (and still tons of debt on it.)

I am in a waaaaay better space a few years after discharge and honestly have all of the credit I need. You have to be ready for the lifestyle change, though, and not repeat the same patterns like getting into new debt right away. If you decide to file, start saving for some cheap cash cars when you stop paying your bills, if you don't already own yours (or your current loans aren't upside down and have good rates and you decide to keep them.)

I live way more frugally , didn't jump back into any new debt like financed cars or any of that junk. I save about 30% of my income now with plans to increase that as time goes on. There are some limitations and annoyances with a BK on your reports, of course, but you can largely work around them.

Short of being able to really reduce that $2675/month in living expenses (like, really reduce it, by moving in with family for a few years, etc.) I think BK may be right for you.

[princessminor]

Hi SteelerNYC.  Thanks for responding.  We decided to go only one of us since DH is the one with judgement.  Then use the extra income to pay down mine.  We're reaching a certain age and we want to be able to buy a house of our own (renting now in LI) so having BK on both wouldn't be great.  We both have cars and they're both old Lexus 01 and Nissan 05, but they still run like new so no new cars yet.  If no headway in three years, then I'll pull the trigger.  What say you?  In terms of lowering living expenses,  not a possibility. Born and raised in BK and the prices got so insane moved to LI for some grass and driveway.  Family are in BK renting and moving in not a possiblilty.  Living in NY is expensive so just gotta roll with it.  Thanks again in advance.

[Anonymous]

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@princessminor wrote:

Hi SteelerNYC.  Thanks for responding.  We decided to go only one of us since DH is the one with judgement.  Then use the extra income to pay down mine.  We're reaching a certain age and we want to be able to buy a house of our own (renting now in LI) so having BK on both wouldn't be great.  We both have cars and they're both old Lexus 01 and Nissan 05, but they still run like new so no new cars yet.  If no headway in three years, then I'll pull the trigger.  What say you?  In terms of lowering living expenses,  not a possibility. Born and raised in BK and the prices got so insane moved to LI for some grass and driveway.  Family are in BK renting and moving in not a possiblilty.  Living in NY is expensive so just gotta roll with it.  Thanks again in advance.

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ohhhhh now I know that you live on LI, I see your living expenses are quite reasonable I left Chelsea for Suffolk County recently. 

I would still still file too if I were you. You can buy a house two years post BK with a proper rebuild. TONS of folks here have done it and you can find the success stories. You could throw all sorts of cash in the bank for a downpayment in that two years. I think your path to homeownership would be far faster when you start saving now vs. needing to pay those debts off before you can start saving. With housing prices around here, you will need the biggest downpayment you can get  

Do it and start moving forward NOW.

[nursepower]

My vote is both BK, but Im going through it right now myself so I'm no expert on money obviously. 

[Anonymous]

I’m on Long Island. Ownership is real expensive and will get worse under new tax law with SALT cap.  It might be cheaper for you to rent 

[princessminor]

Thanks SteelerNYC.  We're goin to see an Attorney either this Monday or next.  Just gotta find a good one.  I will certainly take your response into consideration.  I think I'm two things, afraid and to be honest attached to these cards.  Don't ask me why because it just makes no sense!  The thought of not having them scares me.  This is just crazy!!  We would save a lot if we both did it, but I think fear is holding me back.  I will keep you guys updated.  Thanks again for your input, I REALLY appreciate it!!  

[princessminor]

nursepower, just because your're going through it now, doesn't mean your input isn't valuable.  Things happen to everyone, nobody is perfect!!  Thank you!!