I am considering it, just need some advice
$65K in debt (Two loans, and one credit card)
Every month I'm going deeper in the hole. I just cannot keep up with the payments.
I am considering it, just need some advice
$65K in debt (Two loans, and one credit card)
Every month I'm going deeper in the hole. I just cannot keep up with the payments.
Do you have any costs that you can cut? Phone, rent, groceries?
What do you do for a living? I know this is all relative but the total quantum of debt you have doesn't seem that large. Can you get a second job? Bartender, dog walking, anything flexible where you can make some extra cash. There are apps like task rabbits where you literally just need a phone to get paid to do stuff. I would try to avoid chapter 11 because it will make future financing extraordinarily difficult to get.
Just a couple of things to think about regarding bankruptcy:
You listed 2 loans as part of your 65K debt. Please know that if these are student loans you can not discharge them through bankruptcy.
There are 2 types of personal bankruptcies: Chapter 7 and Chapter 13. Depending on your current financial situation and ability to repay you may be required to enter into a multi-year repayment plan (I believe it is 5 years) in which you make a monthly payment to cover some of your remaining debt. After successfully making your required payment for the length of the repayment plan the remainder of the debt is discharged. Alternatively, you may be able to discharge the entirety of the debt if it is determined that you are not in a position to repay any of the debt. You should expect that a bankruptcy filing will remain on your credit report for up to 10 years and your credit score will take a serious hit.
As another poster stated, you should carefully look at your monthly budget and cut as much as possible before deciding you need to file for bankruptcy. You should also talk to your creditors about the possibility of reducing the balance or interest rates on your current loans. They would rather receive some of that money than none of it.
I filed Chapter 7 bankruptcy in August. It was a great decision.
I had almost exactly the same amount of debt as you, but my wife and I filed jointly, so we shared the debt. We also have a house which we purchased in July 2014. The equity in the house was low enough that it was not taken by the trustee.
All of the tips so far are what you will see during credit counseling. We went down those avenues (find more income, cut expenses, etc) well before declaring bankruptcy.
We hired a lawyer, which did set us back $1800, but the process was very easy and we are in a much better place. We went from ending each month with about $400 less in our bank account, no now netting an extra $300 on average.
Stuff happens. I was laid off, I have two kids under 3, so being able to have both of us work full time and pay for childcare is very difficult. And let's be honest, we opened too many credit lines and were not responsible.
There is a reason bankruptcy is an option. Don't let any stigma attached to the word stop you from considering it. In my case it was an absolute life saver.
Truth seekerer wrote:
I filed Chapter 7 bankruptcy in August. It was a great decision.
I had almost exactly the same amount of debt as you, but my wife and I filed jointly, so we shared the debt. We also have a house which we purchased in July 2014. The equity in the house was low enough that it was not taken by the trustee.
All of the tips so far are what you will see during credit counseling. We went down those avenues (find more income, cut expenses, etc) well before declaring bankruptcy.
We hired a lawyer, which did set us back $1800, but the process was very easy and we are in a much better place. We went from ending each month with about $400 less in our bank account, no now netting an extra $300 on average.
Stuff happens. I was laid off, I have two kids under 3, so being able to have both of us work full time and pay for childcare is very difficult. And let's be honest, we opened too many credit lines and were not responsible.
There is a reason bankruptcy is an option. Don't let any stigma attached to the word stop you from considering it. In my case it was an absolute life saver.
Thanks for your input, I was wondering if you were able to get a credit card after the filing?
Truth seekerer wrote:
I filed Chapter 7 bankruptcy in August. It was a great decision.
I had almost exactly the same amount of debt as you, but my wife and I filed jointly, so we shared the debt. We also have a house which we purchased in July 2014. The equity in the house was low enough that it was not taken by the trustee.
All of the tips so far are what you will see during credit counseling. We went down those avenues (find more income, cut expenses, etc) well before declaring bankruptcy.
We hired a lawyer, which did set us back $1800, but the process was very easy and we are in a much better place. We went from ending each month with about $400 less in our bank account, no now netting an extra $300 on average.
Stuff happens. I was laid off, I have two kids under 3, so being able to have both of us work full time and pay for childcare is very difficult. And let's be honest, we opened too many credit lines and were not responsible.
There is a reason bankruptcy is an option. Don't let any stigma attached to the word stop you from considering it. In my case it was an absolute life saver.
Oh yes ,there is a stigma .
How did you get a mortgage ?
You're a bum .
Childcare - why not birth control ?
Why can't your sow take care of the kids ?
Who do do you think pays for this after all ?
Bring back debtors prisons .
bdfmbfdb wrote:
Truth seekerer wrote:I filed Chapter 7 bankruptcy in August. It was a great decision.
I had almost exactly the same amount of debt as you, but my wife and I filed jointly, so we shared the debt. We also have a house which we purchased in July 2014. The equity in the house was low enough that it was not taken by the trustee.
All of the tips so far are what you will see during credit counseling. We went down those avenues (find more income, cut expenses, etc) well before declaring bankruptcy.
We hired a lawyer, which did set us back $1800, but the process was very easy and we are in a much better place. We went from ending each month with about $400 less in our bank account, no now netting an extra $300 on average.
Stuff happens. I was laid off, I have two kids under 3, so being able to have both of us work full time and pay for childcare is very difficult. And let's be honest, we opened too many credit lines and were not responsible.
There is a reason bankruptcy is an option. Don't let any stigma attached to the word stop you from considering it. In my case it was an absolute life saver.
Thanks for your input, I was wondering if you were able to get a credit card after the filing?
You want out of your debt but you're worried about getting a credit card?
I finished professional school with nearly 200k in debt as did many of my classmates. 65k is nothing, nut up and pay your bills like everyone else.
I did chapter 13. It's humiliating and totally sucks, but I was out of options. You have to grovel before a judge and are at the mercy of your attorney who may or may not be good at it.
I should have done it years earlier, but fought it for years and felt like it was morally wrong or something. When creditors started filing stuff against me, I had no choice.
Are you joking about the credit card? Forget about that. No credit cards. You will be forced to live within your means. Technically, none of your money is yours for the next 8 years.
I kept my house but then got a new job and moved, which means I sold the house I am renting now. And there were court petitions and hearing and rulings before about the house sale before and after the sale that made things really complicated.
I don't feel guilty about it. All my creditors got back more than they loaned me, although not as much as I owed due to interest.
There's rich people bankruptcies that don't affect their lifestyles at all. And there's poor people bankruptcies that don't affect their lives much. But middle class Chapter 13 is pretty life altering.
But it's better than not being able to sleep because you owe everybody debts you cannot possibly pay and have no way out and have creditors coming after you every day.
dude, really? wrote:
bdfmbfdb wrote:Thanks for your input, I was wondering if you were able to get a credit card after the filing?
You want out of your debt but you're worried about getting a credit card?
This. Dude, you should never think about owning a credit card again.
asdfghjkl wrote:
As another poster stated, you should carefully look at your monthly budget and cut as much as possible before deciding you need to file for bankruptcy. You should also talk to your creditors about the possibility of reducing the balance or interest rates on your current loans. They would rather receive some of that money than none of it.
Never declared bankruptcy, but I believe when you strike a deal like this with the credit card companies, the IRS considers whatever you don't pay back as income, and you will then owe taxes on it
cut costs wrote:
Do you have any costs that you can cut? Phone, rent, groceries?
Good question, but in my honest opinion, I think skimping on groceries is a bad financial decision, regardless of your current status. Unless you're buying large quantities of cheap produce, cheap food usually means unhealthy food, and that will lead to a whole slew of issues down the road. Poor health = less energy, more time spent at pharmacies and doctor's offices, and more medical bills.
Dave Ramsey wrote:
You want out of your debt but you're worried about getting a credit card?
This. Dude, you should never think about owning a credit card again.[/quote]
A debit card can do almost anything a credit card can do. You face some issues with renting cars and a few other things, but read the policy before making a reservation.
There have been a few times when for certain things at work they say "put the few thousand dollars on your personal credit card and then get reimbursed" and I have to go back to them and find another way. On one of those I used my work credit card and I got scolded and it was a bit complicated, but since then I've gone back and worked it out beforehand.
If you need an expensive car repair and you don't have it, well, get your bike working. That's just the breaks under bankruptcy. I've rented a car for a hundred bucks for a long weekend trip because I didn't have $2000 it took to fix my $800 car so it could make the trip.
Think it through. You won't have a credit card as a safety net. Maybe you have rich parents or friends who will loan you a couple thousand, I didn't. I sold most of my furniture to buy groceries when a job was two months late in paying me.
childcare wrote:
Oh yes ,there is a stigma .
How did you get a mortgage ?
You're a bum .
Childcare - why not birth control ?
Why can't your sow take care of the kids ?
Who do do you think pays for this after all ?
Bring back debtors prisons .
I got the mortgage when I was working salaried making $66k after bonuses. Mortgage was $195k, 30 yr.
I'm not a bum. I received a healthy severance, and rather than taking a job that was beneath me, I filled for unemployment. My wife took a job making $15/hr, working 30 hours a week. We net about $3,400/month together at the moment.
We have two wonderful children. At the time we conceived, I did not think I would get laid off.
If my wife stopped working to take care of the kids, it would have to mean that I returned to full time employment, which of course the goal.
I assume that taxes pay for this? I don't claim to know the ins and outs, but we have a great country that is affording my family the opportunity to right the ship.
childcare wrote:
Truth seekerer wrote:I filed Chapter 7 bankruptcy in August. It was a great decision.
I had almost exactly the same amount of debt as you, but my wife and I filed jointly, so we shared the debt. We also have a house which we purchased in July 2014. The equity in the house was low enough that it was not taken by the trustee.
All of the tips so far are what you will see during credit counseling. We went down those avenues (find more income, cut expenses, etc) well before declaring bankruptcy.
We hired a lawyer, which did set us back $1800, but the process was very easy and we are in a much better place. We went from ending each month with about $400 less in our bank account, no now netting an extra $300 on average.
Stuff happens. I was laid off, I have two kids under 3, so being able to have both of us work full time and pay for childcare is very difficult. And let's be honest, we opened too many credit lines and were not responsible.
There is a reason bankruptcy is an option. Don't let any stigma attached to the word stop you from considering it. In my case it was an absolute life saver.
Oh yes ,there is a stigma .
How did you get a mortgage ?
You're a bum .
Childcare - why not birth control ?
Why can't your sow take care of the kids ?
Who do do you think pays for this after all ?
Bring back debtors prisons .
What is wrong with you? Nothing you said helpful. This is America - people take risks, sometimes they fail! There are options to not pin you down for life though and they should be applauded.
I agree with everyone about credit cards. Forget they even exist, form new habits. Read up on James Altucher too, he has some blog posts on bankruptcy not being such a big deal.
Truth Seekerer wrote:
I assume that taxes pay for this? I don't claim to know the ins and outs, but we have a great country that is affording my family the opportunity to right the ship.
You think taxes pay for this??? No, not at all. You will be stiffing your creditors, with the government's blessing to make it legal. I suppose if it's a big bad bank you won't feel bad. If it's the plumber who's bill you haven't paid, you're stiffing a neighbor. If you're Donald Trump, bankrupting your company means stiffing the working people that built your hotels.
Maybe you got laid off because enough people declared bankruptcy and stiffed your company enough that they couldn't afford to keep you on. Think about that.
Even if the government did cover it, which they don't, working people would be paying for it in taxes. Money doesn't just grow on trees. Well, it is made of paper, and the government can just print more, so maybe it does grow on trees, but it's bad for the economy to do that.
Do what you have to do. Don't kid yourself about what it means to others though.
65K and you can't make the payments? What's the problem here?
Get a second job....stop wasting your time on LR!!! Cut some expenses. Sell your car.
Seriously...declaring bankruptcy is not always the best solution. You can kiss getting another credit card good-bye think of all the things you do or purchase that require a credit card. You can also forget about getting another loan again and if you one day plan to get a mortgage....forget it.
Also some potential employers do credit checks on applicants. If you have a bankruptcy on your record you can kiss that job good-bye.
To be clear, I was saying I assume taxes pay for my unemployment. I am probably wrong there.
Of the debts I had absolved, all were credit card debts. I have two vehicles, both are paid off in full.
Speaking of companies declaring bankruptcy, it would not surprise me if my old company went bankrupt in the next 3 years. They already closed close to 1/3rd of their US operations last year.
bdfmbfdb wrote:
I am considering it, just need some advice
$65K in debt (Two loans, and one credit card)
Every month I'm going deeper in the hole. I just cannot keep up with the payments.
I've done it a bunch of times before, and let me tell you, it's amazing. The government helps people like me, who work hard, get ahead, and succeed, not losers or minorities - they're disgusting. Let the stupid, poor people pay taxes so you can get back to being a success. And I really mean stupid. Look at all my voters - I tell them about building a wall, and they vote for me. I could kill someone on Main Street, and they'd still vote for me. If elected, I'm going to make bankruptcy great again. In fact, It will be so great, it will make your head spin. Rich, hard-working, successful people like me and Putin will finally be able to succeed without being burdened by working shlubs. Believe me!