Should I or Shouldn't I?

[ScoobaSteve]

Hello everyone.

I have started mulling over the possibility of of filing for bankruptcy. I'm not sure if it would leave me better off or worse off than I am now. I also don't even know if I would be eligible to do so. I'm hoping some of you fine folks will be able to provide your insight and opinions. Here is my story.

• 34 year old single male living in Connecticut, no kids
• Through some poor decisions, but also due to periods of unemployment I have wracked up about $18K in credit card debt.
• I recently had to have my gallbladder removed, even though I have medical insurance I still had about $1000 I had to pay out of pocket which has resulted in me being at the limit for my 2 credit cards.
• I make about $37K a year at my job, which I have been at for 2.5 years. But I am only able to pay a little more than the minimums on my credit card balances every month due to other living expenses.
• I have no savings at all, but do have a 401K at work with about $7k in it.
• I have 1 more year to go before my car is paid off.
• I have good credit, I have never missed a payment on anything nor ever had a collections agency contact me.
• I rent an apartment with a roommate, so except for the typical apartment furniture/electronics, I don't have any assets.
• I try to use my credit cards as little as possible, but occasionally need to charge things like gas or groceries. I use my debit card as much as possible though

My fear is that I am just able to keep my head above water right now, but if something were to happen (job loss, another medical issue, car repairs) my lack of savings and my credit cards being at the limit mean I would have no way to pay for it. So, at that point, I would be forced to stop paying my credit card bills and be forced into bankruptcy anyway. I am starting to feel like I should just do it now while my credit is good, so it will be faster to build it back up. And without the credit cards to pay anymore I would finally be able to start saving money.

Would I even be able to file for bankruptcy? Do you think I would be better off just chugging along as I am and hoping for the best? Do you think I would be better off filing for bankruptcy and starting over? I appreciate your insight

[HHM]

File BK

The REASON you have no savings is the credit card payments. Your debt to income is 48.6%. For those making less than $50,000 per year, I recommend BK when debt to income is 35% or higher.

Do you think I would be better off just chugging along as I am and hoping for the best?

The definition of stupidity is doing the same thing but expecting different results.

You know what you NEED to do, you just need a little bit of courage to do it. File BK, and re-build.

[frogger]

Hi and welcome.

If things went along as they are now, could you pay off all of your debts within 5 years?

[ScoobaSteve]

No. However, my car will be paid off around this time next year, so I'll have $400 more dollars to put towards the credit card payments every month

[ld2366eh]

I'm filing soon as well. I was in your situation 10+ years ago. Was on a five year plan since then. It doesn't get better or easier. I should have done this YEARS ago. Do it now. I doubt you will have regrets!

[duraflame]

I would file, I was in a very similar situation to you for a long time and knew if I was thinking about BK and questioning what I was doing than I should be filing. It took a lot of effort emotionally but I'm on my way. I just filed at the beginning of this month and have my 341 in a couple weeks. I couldn't be happier that this will all be behind me soon. I had more debt than you and made more money as well, plus I lost a car. It will be all worth it here in a couple months.

[ScoobaSteve]

I'm worried that I don't have a high enough debt-to-salary ratio and will be forced into a Chapter 13 filing.

[ld2366eh]

You should schedule a few initial consultations with attorney's in your area. They are free and you'll have a better idea where you would stand. I was sure I was a 13 when I started this process over 6 months ago. We are filing next week as a 7. My case is complicated, but my attorney assures me that I will be fine. (I'm holding my breath!)

Plus, you should take your time, do a bunch of research and get advice from the experts here on the forum. There's a bunch of great advice out here...

[HHM]

I'm worried that I don't have a high enough debt-to-salary ratio and will be forced into a Chapter 13 filing.

It doesn't work that way. The ratio is not what matters; your income simply needs to be below your states median income for a household of your size (household meaning the number of people who live with you).

http://www.justice.gov/ust/eo/bapcpa/20120501/bci_data/median_income_table.htm

[LadyInTheRed]

I'm worried that I don't have a high enough debt-to-salary ratio and will be forced into a Chapter 13 filing.

Your debt to salary ratio does not determine your eligibility for Chap 7.

First, you need to pass the means test. If your salary is less tham median salary for your state and family size, you pass the means test. Median income for a family of 1 in CT is $58,565.

Second, you need to avoid an objection by the trustee that based on the totatality of circumstances you have sufficient disposible income (income less expenses not including your payments on unsecured debt) to pay something to unsecured creditors during a Chap 13. When you are so far under median income, I doubt the trustee will object unless your living expenses are unusually low.

Make some appointments for free consultations with bankruptcy attorneys. When you go for the consultations, bring information on your income (gross and net) and monthly living expenses so they can give you an idea of whether you are vulnerable to an objection.

[HHM]

Don't get hung up on the particulars, YOU ARE BANKRUPT, you just need to accept that fact.

[ScoobaSteve]

ouch, lol

[pamkev]

We should have filed years ago but thought it would get better it didn't and we filed this past Aug. As others have said go see some lawyers at least 3 of them and take your time and learn everything you can before you make a decision. It is NOT the end of the world as we have been led to believe but a fresh start to a new life

[lillymarlene]

I have nothing new to add, but like a lot of people here I should have filed many years ago. For years, everytime I wanted something, I just pulled out the plastic. I remember of being horrified, of having over $12K in credit card debt, but of course I didn't file then, or change my habits. I just kept hoping something magically would happen, that I'd somehow pay it off. Nobody I knew declared bankruptcy. In my family that was something for other people, that didn't want to pay their bills. My credit also was considered good. So I just let it go on, kept paying those minimums, juggling the cards, and something did happen. Eventually the unsecured debt grew to over $200K.

I agree with some of the other posters here. You probably should check out a few bankruptcy attorneys. It just doesn't get better on its own.

[AngelinaCat]

Go and schedule at least four if not five BK attorneys and see what they have to say. The consultations are usually free. Read through the stickies here and learn some things then go and see the attorneys. You will get a better 'handle' on your situation if you do that.

Just remember that filing BK is a 'business decision' and is NOT a condemnation of you.

Good wishes. Please stay with us and let us know how it goes for you!