The thought of filing for Bankruptcy lingers in my head.

[aav28]

Newbie here and I need some advice.


Let me cut to the chase:

I'm a 29 year old male who is 3 months in from being layed off from my job. Obviously times are a little tough but I'm still paying all my bills on time thanks to the unemployment checks. Here are my depts:

Chase credit card (account closed) = $7,000
Citibank (account still open) = $13,400
Government Student Loan = $5,000

So I'm roughly $25,000 in the hole. How did I get here? Well, majority was from school and buying cars. I used the chase account to purchase a 1969 Camaro (my dream car), which was a project car and is still sitting in my back yard after a 1.5 years after purchase. Now I thought of selling it to pay off the chase but i really doubt I can get what I payed for (which was $6,000).

The citibank was primarily used for college. I spent a few Gs on my tuition and would use it for food and books. Then they started jacking up these interest rates which really hurt me. Then, i wanted to pay off my auto loan so I used the citibank card for roughtly $5,000 to obtain my pink slip. I eventually sold the car for half of what originally payed for. So from here on down, I will NEVER make a big purchae for a vehicle again.

So one day I caught the tail end of a "Money man" on the news talking about how you can immediately build your credit following BK. And how a few were able to purchase a home after 4 years. Whether is BS or not got me thinking.

As of right now, I want to man up and pay off the dept on my own. But this dept has stalled my life.

My credit is EXCELLENT and I don't want to regret it in the future. But my dept to credit ratio is killing me to the point that I can't get accepted for lower interest credit cards for transferring balances.

However, I don't plan on buying any cars, I'm single and my dream is NOT the picket fence and the family. But this dept is probably the main reason why that's not my dream. But I do plan on seeing the world so owning a house isn't my desire.

So I'm at the crossroads. The fact that I don't plan on having a family anytime soon, no major car purchases in the future, and this valuable lesson learned for this credit card nightmare has me strongly considering BK. And to be honest, good credit has me in this mess. Well, my bad judgment too but we live and we learn.


I know this is a long post but some advice would be appreciated.

Thanks

[StartingOver08]

Your debt does not sound huge. It may feel that way right now because you are temporarily unemployed.

Filing BK is not something to be taken lightly or prematurely. It may sound like the answer to your problems right now, but you have your entire life in front of you. BK is a large step that is a great solution when you are faced with insurmountable debt. But BK is a debt management tool only. Without actual income, this particular tool's usefulness is greatly reduced.

What is your annual income normally? (To calculate debt to income ratios)

I assume you are looking for a new job now and just have not found one for the past three months. Even if you ultimately decide to file, you will need to have a job with stable income first. Once you get the new job and actual income coming back in, that pressure you feel right now will certainly be reduced and may allow you time to think clearly.

Your idea of selling the project car to payoff existing debt is excellent. Do it! In fact, sell whatever 'stuff' you don't need (while you are looking for employment) and make a bank of funds. When you get settled in a new job, then use that bank of funds to pay down or pay off your debt. If you concentrated, you could be out of debt in short order.

[klandsb]

Just food for thought... I owe Chase $12,000 and last week they offered to let me pay $8000.00 to clear the debt. However she also said I could bring any offers to the table and she would take them to Chase... So if you sell you car & negotiate w/Chase for 1/2 of what you owe them it might ease your stress....

[InDebtNeedHelp]

With all respect, kindness, and humility, if you think your situation has anything to do with your good credit, you will likely be in the same situation a few years from now. YOU did this to you. YOUR poor decisions/lack of knowledge and understanding did this to you. Your desire for what you wanted when you wanted it, which was greater than your level of wisdom and character, did this to you. Get wise. Get educated. Grow in character. Learn from your mistakes. NEVER do this again.

Newbie here and I need some advice.


Let me cut to the chase:

I'm a 29 year old male who is 3 months in from being layed off from my job. Obviously times are a little tough but I'm still paying all my bills on time thanks to the unemployment checks. Here are my depts:

Chase credit card (account closed) = $7,000
Citibank (account still open) = $13,400
Government Student Loan = $5,000

So I'm roughly $25,000 in the hole. How did I get here? Well, majority was from school and buying cars. I used the chase account to purchase a 1969 Camaro (my dream car), which was a project car and is still sitting in my back yard after a 1.5 years after purchase. Now I thought of selling it to pay off the chase but i really doubt I can get what I payed for (which was $6,000).

The citibank was primarily used for college. I spent a few Gs on my tuition and would use it for food and books. Then they started jacking up these interest rates which really hurt me. Then, i wanted to pay off my auto loan so I used the citibank card for roughtly $5,000 to obtain my pink slip. I eventually sold the car for half of what originally payed for. So from here on down, I will NEVER make a big purchae for a vehicle again.

So one day I caught the tail end of a "Money man" on the news talking about how you can immediately build your credit following BK. And how a few were able to purchase a home after 4 years. Whether is BS or not got me thinking.

As of right now, I want to man up and pay off the dept on my own. But this dept has stalled my life.

My credit is EXCELLENT and I don't want to regret it in the future. But my dept to credit ratio is killing me to the point that I can't get accepted for lower interest credit cards for transferring balances.

However, I don't plan on buying any cars, I'm single and my dream is NOT the picket fence and the family. But this dept is probably the main reason why that's not my dream. But I do plan on seeing the world so owning a house isn't my desire.

So I'm at the crossroads. The fact that I don't plan on having a family anytime soon, no major car purchases in the future, and this valuable lesson learned for this credit card nightmare has me strongly considering BK. And to be honest, good credit has me in this mess. Well, my bad judgment too but we live and we learn.


I know this is a long post but some advice would be appreciated.

Thanks

[HakunaMatata]

Aav-

It's a bit challenging calculating your future when critical numbers are missing (income). As Startingover mentions, your debt may feel more burdensome than it really is because you don't have a regular income (unemployment, for many, fails to satisfy basic needs). If I were you, I'd try to gauge your debt against your anticipated future earnings. Is it still overwhelming?

I've pulled myself out of $20k in CC debt in the past and it merely required discipline. The circumstances leading up to this were tied to secured, yet delayed employment. For some, this isn't easy. I knew my income, my spending habits, and my cost of living could propel me out. Like you, I'm single. This minimizes unexpected expenses to some degree (although, a second income seemingly would be beneficial ).

The economy isn't stable and this causes discomfort for many. I commend you for exploring potential resolutions to your current hardship. While you may feel your situation is dire now, projecting into the future is imperative. What is the status of your employment? Do you expect to return to work in the near future? How do your anticipated earnings compare to your debt? Although it may not be easy, it is feasible for you to move financially forward once consistent income is reestablished? On the flipside, should you not be able to secure employment in the near future, how will you satisfy basic needs? Will you rely on credit for such? If the latter seems possible, now is not the time to turn to BK as your situation may intensify and you will need this option to give you a fresh start down the road.

Bankruptcy should not be treated lightly; although, it isn't the big, bad, devastating decision so many are led to believe. Your credit will plummet. This is NOT indefinite. You can rebuild your credit, you can secure loans, you can have credit cards. I used to think my credit score was a reflection of me. While my decisions factor into it, circumstances beyond my control contribute as well. I haven't filed for BK yet, my loans/credit cards are current, and my score has reduced. Despite a solid score, credit cards have been reducing limits, tightening the available credit to debt ratio, and negatively impacting the score. I presently work more hours for less money due to this lovely economy and the downsizing trend. This has created a debt to income issue.

Debt may feel like it has stalled your life. Debt doesn't have such power. While it may prevent you from traveling, buying new items, and consume your income, you will still have a birthday on the same day every year. You are moving forward. You've learned valuable lessons about spending. Your spending has caused discomfort; although, this should not prevent you from living. You may have to adjust tangible dreams (ex/ new cars). You do not have to adjust intangible dreams ("white picket fence and family").

Continue to learn, ponder your future, and hang in there!

Wishing you great success!

[LSUTiger32]

Hey man, I know things seem impossible but you can recover from that. I am filing because I am over $700K in debt including secure and unsecure items. If I only had what you had, I would have been out of debt already. You can do it from where you are now. Cut up the cards, get you a job doing anything you can find (pizza delivery pays well) and get out of that mess.

I hope I don't get in trouble for this but check out Dave Ramsey. I found him a year ago and we have made amazing strides in getting our personal finances in order. Sadly, my real estate ventures bankrupted us.

[OhioFiler]

With $20,000 in dischargable debt and only unemployment benefits as income I absolutely without a doubt would not file BK at this time.

Good luck!

[hereforinfo]

Sell the camaro for whatever cash you can get and then offer to settle with either of the credit card accounts for less than what you owe. The rest you can chip away at.

[OhioFiler]

Sell the camaro for whatever cash you can get and then offer to settle with either of the credit card accounts for less than what you owe. The rest you can chip away at.

Settlements can be risky. I'd sell the Camaro and use those funds to support myself until I'm back on my feet. If I were to pay off anything it would be the non-dischargable student loan.

[StartingOver08]

Settlements can be risky. I'd sell the Camaro and use those funds to support myself until I'm back on my feet. If I were to pay off anything it would be the non-dischargable student loan.

Ditto.

[Kpower]

I recently worked out our budget going forward and I was curious about where we had been spending our money so I went back and looked at my bank statements and separated everything into categories. Restaurants, groceries, retail, hotels, gas etc. I was amazed to find that we were spending a few hundred a month just eating out. Even fast food here and there adds up. Not everyone's spending habits are the same but there may be things that you do not realize you are spending money on that could be eliminated. With any luck you might find a hundred or so a month that would allow you to double up on one of your cards and get it paid down faster. This lay off could be a great benefit to you down the road too. You are now used to living with less. Take this forward and continue it and you will be able to save more and pay your cards down that much quicker. Once you are debt free pay yourself the same amount as you were paying to the cards/student loans by investing it into a 401k or IRA or mutual fund. You will be thankful for it later in life.

[debtmonster]

With such little debt, I WOULD NOT FILE! Look how many years I held off. I had to wait until I have almost $350,000 in total debt that I am going bankrupt on. I would certainly not destroy my credit record for 10 years for a measly $20,000 to $25,000.

I would stoop as low as using one of those consolidation credit things if I absolutely had to with balances that low.

Listen to what the other people here are recommending. We've all been there.

[OhioFiler]

With such little debt, I WOULD NOT FILE! Look how many years I held off. I had to wait until I have almost $350,000 in total debt that I am going bankrupt on. I would certainly not destroy my credit record for 10 years for a measly $20,000 to $25,000.

I would stoop as low as using one of those consolidation credit things if I absolutely had to with balances that low.

Listen to what the other people here are recommending. We've all been there.

DM...this is an inappropriate statement to make. One's credit in NOT DESTROYED for 10 years after BK.

[Kpower]

DM...this is an inappropriate statement to make. One's credit in NOT DESTROYED for 10 years after BK.

Also it is judgemental. It is not really the size of the debt that matters it is your solvency. To a millionaire 350k debt is probably nothing to sneeze at but to someone who makes 60k a year it is a lot. For someone who makes 60k a year 20k may not be a lot but to someone on unemployment it might seem like a mountain. Each case is different and blanket statements can be discouraging to people.

[pcn]