Feeling very uncertain about what to do

[lulabelle]

My husband and I have a meeting set up with an attorney tomorrow, but maybe someone will have some insight for me.

Here are our stats:

We have about
-$53,00 in unsecured debt:
Discover - $11,400 @ 12.9%
Chase - $8655 @ 8.24%
Chase - $12,00 @ 2.99%
Capital One - $10,100 @ 7.72%
GM - $5200 @ 16.9%
Checking Reserve - $4000 @ 22%
Kohls - $400 @ 22%
Sam's - $1500 @ 22%
-$17,000 car loan - vehicle is currently worth about $15,000, $440/mo
-$30,000 HELOC $108/mo interest
-$225,000 home loan - home is worth around $310,000, $1900/mo

Last year we were doing fine - together we made about $96,000
This year first my hours were cut, resulting in about 10% of my income being lost. Now we have found out that my husband's income will be cut 20%, likely effective Dec. 1.

We don't live extravagantly, most of the debt was just poor money management and that I have recently discovered that I am a compulsive debtor.

I am terribly, horribly ashamed.

We are just barely making it with my pay cut - I don't know how we'll make it with DH's cut.

We have some assets - a four wheeler, a car worth about $2000, a truck worth about $5500, a camper worth about $800, some hunting rifles, an old tractor, etc. We don't want to lose those obviously, but we are prepared to do so.

DH does not want to file - he is very worried that we'll lose our house. We built it intending to retire here. We live in MN, so we can use the state exemption, and from what I have been reading, as long as we are current and paying, we should be fine.

Is there any chance that a DMP would work for us? Or is bankruptcy our best option? I've read many, many things and all of the "experts" say do not file, while it seems like most everyone that has filed do not have regrets about doing so. I understand that it kills our credit for 10 years. We do not anticipate ever getting a new mortgage, we do not ever want another credit card.......the only drawback may be that we have kids that will be going to college in a few years. Will a bankruptcy affect their ability to get money for college?

We are current on everything right now. I have recently used our credit cards (as in the last two months - now they are cut up). Usually it is because I have put so much money into our payments, that little is left for food/clothing. I never intended to file bankruptcy - I thought that if I worked hard to keep my payments current and my APR's low, somehow we would get out. The anticipated wage cut has me scared.

Any advice would be appreciated!

[aces67]

Honestly if I were you I would make an appointment with a couple of BK attorneys. Most times debt management plans aren't the best way to go.

[southernbelle]

I would have to agree with aces67. The only real way to get a realistic answer on whether to file or not is to make a few appts with BK attys in your area to discuss options (but make sure your husband is on board with the idea first). The consultations are free and will help you understand what you would have to do to file. Check out some financial planning books from the library to help with budgeting to get a better handle on spending.

Also, beware of debt consolidation firms and do some research before choosing to go that route because the agreements made with cc co's are strictly voluntary and some debt consolidation firms go BK themselves.

I wish you and your family the best of luck.

[shabam]

Do not waste your time with debt management.

A ch 13 plan may be a great option for you, since you have assets you want to protect.

[whipster1]

I am terribly, horribly ashamed.

You have made some unwise business decisions when running the household, and also lost some income. The whole country is reeling from the unwise decisions made from the bought and paid for people running it. You are far from alone.

Do not judge yourself from business decisions. You can get through this.

[wantout]

The hardest part of a BK is admitting you need to file.

I had people tell me for almost 2 years that I needed to file, but I would not listen.

Now looking back, I should have filed, my life has changed, from now on it is cash and carry, when this is over I have a plan and will stick to it.

I am not ashamed, this entire country is bankrupt, I am just getting in early. My attorney is backed up, he has cases waiting, he told me he has never been this busy before. He has been in the BK business for almost 20 years.

When I put everything on paper and took a good hard honest look at things, I knew what I had to do and did it, finding the attorney to use was the hard as was admitting to someone else that I had made mistakes. He told me you will get through this and be able to help others.

Find a attorney and do what needs to be done.

[tkharvey]

Please do not feel ashamed! It's nothing to feel ashamed about. Most of us on here are in the same boat as you....After 20 plus years of excellent credit, out income took a 50% nose dive which left us with no other choice. Like many of the posters before me, my only regret is not filing sooner. We were robbing Peter to pay Paul for so long, just getting deeper and deeper into debt. My husband DID not want to file BK. Now, looking back, he realizes it was truly our only option. Please, please, do not use a debt consolidation company. A friend of mine did that and it was a total rip off. Don't waste your hard earned money. Meet with an attorney, you'll feel better after you did, learning what your options are. Good luck and remember it's not the end of the world!

[ForumReader]

Regarding debt management companies, I implore you to stay away from these DMCs! I got suckered into one and regretted it ever since. They are not worth a penny. Also please do not feel ashamed about filing bk. This whole economy is reeling left to right so a lot of people are doing this. You will feel better when you are ready to feel better Best wishes.

[lulabelle]

Thank you so much for the responses! It's just hard - no one ever thinks it will happen to them, you know? Stupid economy.

We have set up a sound budget with line items for every expense, should we decide to file.

Our 1st meeting with an attorney is tomorrow p.m. - hopefully I can hang in there until then! The thing that's getting me through is that I so desperately want to know what it's like to not have to live for your creditor's. Maybe I could finally breathe again. At least that's what I'm hoping for.

[whipster1]

Lula after filing you will feel a sense of relief almost like the first big O ...and I ain't talking about the prez.