How do you know when to give up and declare bankruptcy?

iVillage Member
Registered: 03-01-2008
How do you know when to give up and declare bankruptcy?
13
Tue, 02-28-2012 - 11:15pm

I have reached a point that I feel I am getting nowhere in this debt battle. Its been almost 3 years and Im no better off now. I guess I do see things getting somewhat easier later this year after my car is paid off freeing up almost $400 a month, but thats only if nothing else comes up, and it probably will, if things continue as they are now.

Im not trying to be a downer but to be realistic. Each month I am having to borrow from my banks early access fund just to have money to live on. I pay my bills but there is nothing left after that and some months not enough to do that. I have tried a budget that someone on here generously worked out for me but too many unexpected things came up to blow that, car repairs, medical bills, etc.. Though overall I have cut my debt in half, I still have so far to go (and compared to many on here it wasnt that huge to begin with). I did do something that Im sure would be frowned upon here but I felt I had no choice. My dog got very sick and I had to open a credit card with Care Credit to save her life. It is interest free for 6 months but there is no way I will have it paid by then and the interest rate goes up to %25. I also was offered another high interest credit card which I opened and intended to keep for emergencies which kept coming up and now that is maxed out. So while I paid off half of my original debt I have added about $3000 to that figure. I knew it was wrong but I couldnt figure out other options. I have no one to lend me money and nothing of value to sell so

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iVillage Member
Registered: 08-24-2007
I've been reading the thread over the past few days but not adding input (since I don't have any experience with bankruptcy). But I just thought I'd chime in and reiterate what serenity mentions about saving money by renting.

Renting is expensive. It's not just the rent (though many people have difficulties finding a rental place that's liveable and less than their mortgage). It's also the hidden costs of renting. You pay for everything: for example, parking is not always included in the rental costs. If you live in an apartment, you likely won't be allowed to have a washer/dryer in your unit, which means spending money on coin-machines. I spend between $800-900 per year on coin machines. It's almost like buying a new washer every single year. In any case, I could write an entire post on how renting actually costs more money, but suffice it to say I would think carefully before turning to renting as a solution.

Best of luck to you.

Kate


empty purse

Community Leader
Registered: 08-25-2006

Hi RN, I was just thinking about you last week!

OK, I am scratching my head a bit.

Serenity
iVillage Member
Registered: 11-14-2008

Yes, forclosure stays on your credit for a long time, but it might be worth it at this stage if you can't sell it as is which I would try first. You don't get help from your kids or husband with repairs now or in the future right? so getting rid of the house is the best way to go even if you have to take a loss. They might see the light through this process as well. Who knows. You would have less stress, a nice clean apartment, and

Community Leader
Registered: 07-26-1999
Marie has an excellent point if you already have some equity built up in it. I agree that refinancing like that is not always the best idea, but if its that or BK, getting a home equity line of credit may be the way to go.
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iVillage Member
Registered: 10-01-2008

I think the biggest stress for you is the home.

Norma


"Patience is the best remedy for every trouble"- Plautus


iVillage Member
Registered: 12-31-2010

Another possible option that hit me in your case is to get a few estimates on ALL the repairs that are needed in the house but put them in two categories:

#Marie
iVillage Member
Registered: 03-01-2008

Thanks everyone for the advice. As always this board and the people on it are a treasure and have helped me more than I can say. Yes, the details are right about the debt, about $8000 in credit card debt still. I know thats not terrible compared to many. As for the house, it is definitely our biggest problem. We are not upside down per say and our

Community Leader
Registered: 07-26-1999

RNRuns, I am sorry you are in this situation.

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iVillage Member
Registered: 11-14-2008

I seem to remember your original cc debt being 12,000, then you paid half = 6000 and added 3000 more =9000? That is not a lot of money to be owing. I'm not trying to diminish the fact you have had trouble paying it back, just the specific amount. And that is still progress, plus you don't have the car payment anymore.

It seems to me the real thing dragging you down is your house? I cannot remember if you owe mor than it is worth or not? Perhaps forclosure is the way to go and should be explored instead of bankruptcy. What does your husband have to say about all this. Is he contributing to the finances yet?

Good luck. We are here for you!

Community Leader
Registered: 07-26-1999
I'll get back to the original post in a minute, but Norma, you can motion the court to get your roof fixed. You would get a quote or two from reputable companies and submit it, as well as a payment plan, to the BK court. They can, and I've seen it done plenty of times, amend your plan, it would reduce how much your creditors get over the long run, but it would give you teh breathing room to get the roof repaired without any further potential damage to your home. I would talk to your BK attorney about it. I just didn't want you to think its not possible, because it is to still do things like major NEEDED household repairs during BK.
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