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Do YOU think filing for bankruptcy is the "easy way out"?

I owe about $28,000 in credit card bills. With that being said I realized I am having a hard time paying them, so I have stopped "charging" things for about 6 months now. And am just living on what i actually make. (which isn't much, because I am a single mom) and with paying my monthly bills, and rent (which isn't much because my daughter and i still live with my parents) and groceries and what not i am not getting ANYWHERE!! I cant save money, I have nothing!! I thought about debt consolidation, but...reallly, it will take me AT LEAST 5years, probably more to even pay it off that way..so then I thought about bankruptcy..and ya i will be screwed for 7 yrs..but..at the same time at least I can "start over"..I can start saving money, I won't have all this financial stress anymore..I was talking to my mom about this, and she said me doing that is taking the easy way out..and i kind of get what she is saying, but, being screwed for 7 yrs isnt going to be fun either, ya know???!!! i am more thinking about my daughter...being able to actually save money so we CAN move to our own place, so i can afford to let her go to swimming, or soccer, or dance.. (she will be 7yrs old next month and really wants to, but right now i cant afford to)....so whats your opinion??

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Anonymous

Asked by Anonymous at 7:25 PM on Mar. 8, 2011 in Money & Work

Answers (20)
  • It's not easy. Make sure you're strong enough to say no to temptation if you do it, though. There are high interest credit cards, loan companies and the like who purposely market to people who are listed on the court docket as completed bankruptcies. They offer you credit when nobody else will because they know you can't file again right away and no matter what you can't get out of any debt you run up with them. They'll be about the only ones offering you help, though. Renting, buying a car (or a house) will be near impossible for at least 7 years in this economy, even with a co-signer.
    NotPanicking

    Answer by NotPanicking at 7:28 PM on Mar. 8, 2011

  • You *should pay your bills *but sometimes that's not possible. I don't envy your position at all. If you do file, I would hope you do some sort of credit responsibility classes or something so that you learn how to avoid getting there again. Good luck.
    silversmom

    Answer by silversmom at 7:28 PM on Mar. 8, 2011

  • I've always seen bankruptcy as the last resort to financial distress. It sounds like you have a way out without filing. I've been within days of filing for bankruptcy and then received an extremely unexpected gift of money from a friend. I have no words to describe my gratitude about this still. It's a huge step. Make sure you're really ready for the next 7 years if it's what you choose to do.
    Nonoluna

    Answer by Nonoluna at 7:29 PM on Mar. 8, 2011

  • Honestly, I do kind of agree with your mother... I mean, YOU racked up the charges, so you SHOULD be responsible for paying those back, know what I mean? I can understand how it would be appealing to file for bankruptcy, but for me personally, I'd feel like I would have taken the easy way out. I'd rather go the debt consolidation route, myself. It sucks that your situation affects your daughter, but then again, you could use this as an opportunity to teach her about personal responsibility, too... And keep in mind, with bankruptcy on your record, it might not be all that easy finding a place to rent, either. Either way, good luck!
    Anouck

    Answer by Anouck at 7:29 PM on Mar. 8, 2011

  • There is nothing easy about filing for bankruptcy. It is very expensive. It's also difficult to know that your name will be plastered all over town to your creditors and such... but, it's there for a reason.. to help when no other option is available. If it were easy, you would be able to file whenever you wanted. As it is, you have to wait several years before you are able to do it again.
    m-avi

    Answer by m-avi at 7:29 PM on Mar. 8, 2011

  • Not long ago they changed the qualifications for filing for bankruptcy. Also, there are two types of bankruptcies- chapter 7 and chapter 11. With one almost all of you debt is wiped away and the other you are set up with a repayment plan. You didn't mention if you have not been making payments. If you are making payments then you may not qualify. I would do a lot of research before you decide.
    JeremysMom

    Answer by JeremysMom at 7:35 PM on Mar. 8, 2011

  • Jeremy's mom had a great answer!!! Sometimes, even a relatively low income can disqualify you from the wipe-your-slate-clean bankruptcy. So, you might be making payments anyway.

    Do some sort of flowchart. 28,000 is actually not THAT much debt. If you can finish paying it off in 5 years, you may be better off than ruining your credit for 7 years. When you ruin your credit, you cannot get any loans or credit for emergencies, and you might start having to place "deposits" on your utilities and have difficulty finding places to rent or buying a car.

    make you payments, and your credit score will look excellent by the end of it.

    Good luck.
    ImaginationMama

    Answer by ImaginationMama at 7:43 PM on Mar. 8, 2011

  • I think you should pay off your bills, no matter how hard it might be. But . . . as far as your daughter is concerned, have you looked into classes through your local Parks and Recreation Department? I know ours offers scholarships to people with low income - and they have swimming, dance, etc. classes.
    missanc

    Answer by missanc at 7:46 PM on Mar. 8, 2011

  • First I am sorry that you are in the credit card hole. . 28k is not enough for you to file BK, it doesn't make sense for you to screw up your credit for 10 yrs and the av. cost of BK is 2k. 1 you have done the right thing by not charging, 2 call your creditors and ask them to lower your interest rate, 3, take your smallest card and pay it off as fast as you can while making minimums on the other cards and once that one is paid move on to the next and so on. It will take some time but you can do it.  I understand that you do not make a lot of money but there are some things you can do to make a little extra dollars.  Baby sit on weekends for friends and family, look through your closet and consign what is in good shape and in season (kids clothes sell to as well as toys that your child no longer uses).  Good luck to you and hang in there.  Also, churches can help with food.
    jen2774161

    Answer by jen2774161 at 7:56 PM on Mar. 8, 2011

  • I say get a bankruptcy lawyer and go ahead and file. it's not like the 'shame on you ' police will come knocking on your door because you took the easy way out.

    Anonymous

    Answer by Anonymous at 8:24 PM on Mar. 8, 2011

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