10,000 in debt...does BR make sense?
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10,000 in debt...does BR make sense?
| Mon, 04-26-2010 - 11:37pm |
I first came to this board about a year ago and in some ways in saved me. I was so scared and alone and I got such great support and advice. However, I find myself in a bad place again and dont know what to do.
I wont repeat the whole story but suffice it to say, at this point in time, I have about 10,000 in credit card debt. I also have a car payment and mortgage though both are current.

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You are in the right place for support and guidance. Have you tracked your spending to truly see where your money goes? Do you plan for the irregular expenses that you know are going to come--like annual premiums--but that don't happen every month?
Check out the posts on sinking funds. That will explain planning and saving for those irregular expenses.
I would suggest reading MaryAnne's story for inspiration and wisdom. Her story shows that with determination anyone can pay off debt. She is truly inspiring.
I can't tell you if bankruptcy makes sense, only you can decide that for yourself. But you do make really good money imo, so I would suggest that with examining your budget, your spending, and coming up with a strategy to save and continue to pay down debt, that you can pay off what you owe. If you are comfortable enough to post specific numbers people here will help you with a budget and a plan. I would just like to encourage you to try to pay your debt off.
I would talk to a BK lawyer. Consultation is free. If you do declare BK, Ch 7 is the way to go. Ch 13 just means you are paying the creditors back, with a lower interest rate over time. Ch 13 can be just as damaging to the credit score as Ch 7, so you're better off wiping the slate clean. If your credit score is already shot, you might as well give yourself a new start with no debt.
Keep in mind it does stay on your report for ten years, but if you're not planning on buying a car or a house, you'll be fine. I heard about someone who was able to finance a lower priced vehicle after about 3 years from declaring BK.
NO bankruptcy is so not worth it! You have $20 till payday this week, so do I, you can really do it!!!! Just make it a game.
You make a really good income, I would just call the CC companies, ask for the hardship department and tell them you need to work out a settlement. You will close the cards, get a lower rate and a fixed payment which should help you a lot. It won't hurt your credit score much at all.
If you do file BK, you will live with that shadow for 10 years and they will tell you how much you can live on, the rest will go to your creditors.
If your house is too much, talk to some folks about mortgage modification. There really is a lot you can do.
Also see if you are taking out too much for taxes and retirement funds, that might also help loosen things up. IF you got a refund last year, adjust the withholding so you get more in each check.
You CAN do this!! If I can pay of $80k of CC on $80k income, you surely can do $10k.
-Marie
I would head over the Debt Q&A board to ask more detailed questions on BK:
http://messageboards.ivillage.com/iv-mldebtqa
But looking at just what you posted, making $76,000 a year and only having $10,000 in cc debt, and that's it, I can't see where BK would be the best option.
I do not think BK is worth doing for an amount that is such a small percentage of your annual salary.
Having filed Chapter 13 Bankruptcy in 02/2009 I can give you what information I know, good & bad and also refer you to another Ivilliage board, Debt Questions and Answers with a community leader Carolyn that has tons of bankruptcy experience.
Norma
"Patience is the best remedy for every trouble"- Plautus
Well making $76,000 per year, you should have no problem paying your bills, paying down debt and tucking a little away.
I remember you!
I remember you were really behind on bills and had about $12,000 in CC debt. It can be scary the things I remember, just ask the other people of the board LOL! I also recall your husband was a huge bleed on your finances with denial and a business gone bad. Did you solve that problem?
I don't think you should file BK. You have come a long way this year and started to turn things around. Debt can seem over whelming at times but keep a few things in mind. You car payment will eventually go away, and the balances on the CCs will go down leaving you more wiggle room. Track your spending by writing everything down to see if there are any other bleeds.
A few frugal years are not uncommon in such a journey. You do need to make a game out of it. Is there anything you can sell to give a kick start on saving for an emergency fund? A garage sale to host. Keep working at saving that $1000 for the efund first. I think that would give you the momentum to go forward. I know you don't want to hear this but $10,000 isn't that much debt. You can do this, so refocus and move forward.
Hi mruns53,
I totally get how difficult this can be when you are a single person trying to survive on a single income.
Kate
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