I'm so lost....Do I file?

[Anjote]

First and foremost, I apologize if it's not proper etiquette to create a post asking this question. My head and heart are throbbing, I've read just about as much as I can, and I'm scared that the attorney just wants me to file because he wants money.

I'm 26. I lost my good job at 23, ran up 18k in credit cards and medical bills, and had to go away for health treatment for 7 months.

I also have 12k in a car loan and 16k in student loans. I'm a cum laude graduate with a BBA from a good college.

I finally got back to work and am making $10/hr.

A credit card company just gave me a summons to collect a debt and I'm scared that the rest of them are coming soon. The only thing I can really afford is my low grade apartment and my car payment to get to work.

I don't know where to turn, nor what to do. The attorney says to file Ch. 7 to get a fresh start because I'll never catch up.

Can I please have some advice on what to do? I don't know if I'll ever get another good job, but I'm sure I'll be stuck making $10/hr. for a very long time. My debts have been non-paid for a very long time (7mo. - 2yr.)

[justbroke]

The final answer to your financial condition will always rest with you. I would consult with a few more bankruptcy attorneys and run all the numbers. First, remember that a Chapter 7 is the nuclear option and you can't use it again for 8 years. Second, filing bankruptcy will relieve you from these bills, payments, and the pending lawsuit. Third, you are right, you don't know if the other creditors are lining up. Fourth, if the creditor or creditors do obtain judgments, they may be able to garnish your wages in Michigan. (I don't know Michigan law on garnishments, but imagine them getting 25% of your pay until the judgment is paid in full).

Since you only make about $20K a year, bankruptcy may be your option. I don't know the amount of your medical bills, but you may very well have more than $70,000 in debt (including car and student loans). You are certainly drowning in debt given that your cost of living alone must leave you with nearly nothing to eat or even survive. This is why an attorney can sit with you and go through the numbers on the consult. (Maybe not sit, but speak on the phone if that's the way the attorney does free consultations.)

To me it reads as though you need the relief that a bankruptcy would give you. Your student loans are not dischargeable (and I won't go into the very miniscule circumstances under which you could). You need your car to work. You're probably paying $6K a year on housing not including heat, hot water, electricity, phones. You're probably spending. Your expenses, including housing, are probably over $1,000/month and you only make $1,600/month and I haven't even talked about your taxes! You are certainly needing a change!

In fact, I think you just gave every reason to file.

[Drazil65]

Ditto what JB said in last post. The only thing I will add is that you need more income, so a second job may be in your very near future, do what you need to do to up your income. Also, might think about getting a room mate or you move in with someone and share rent in nicer place. You will make it, we all have. Good Luck!

[bcohen]

Filing now, while your income is low, and your car is still encumbered would be a savvy financial move. You would easily qualify for Chapter 7, and you would not lose any property as a result of filing. If you are able to increase your income in the future, you could use that money to pay for living expenses going forward rather than to pay off old inflated debts.