debating on what to do

[what2do]

I'm new to the forum. I have been debating what to do for quite sometime. I am married but have no joint debt with my spouse. Have cc debt over $40,000 (spouse is not aware of full amount) in my name alone. I do have a SEP plan with approx $50,000 which I can take out to pay off debt but will have to pay penalties. We are trying to purchase our first home and I would prefer to use those funds as a down payment. My FICO score is 705. The interest alone on the credit cards is killing me - never late on any payments, always pay the minimum, etc. I am going to call a bankruptcy atty to find out the best route to go. Our cable bill, utilities, etc., is in my name. I guess my first set of questions is how horrible is bankruptcy going to kill our chances of purchasing a new home? My spouse has good credit but I have the long history of employment (20 years at same job) - he has been at his current job for only a year. I am more than willing to destroy my credit to get ahead for our family but I'm not sure if he can get a mortgage on his own or if a mortgage company would allow me to use my funds from my SEP plan, my income, etc., as a factor but not have my name on anything. Any suggestions about what path to take would be greatly appreciated!!!!

[HHM]

Well, the first issue is "why is your spouse not aware of the full amount", its not good to keep these secrets.

As for your financial situation. Whatever you do, do not withdraw your SEP to pay that debt.

With a credit score of 705, a bankruptcy would negatively effect your credit. However, you probably could still buy a house after the BK, especially with a significant down payment, but your interest will be higher than it would be if you bought now.

How much do you and your spouse earn (take home) per month?

[what2do]

Thanks for the reply. My spouse and I bring home about $4,200 per month. We have rent, credit card payments, daycare of approximately $550.00 each month, car payment, and normal monthly expenses, etc. We have been able to pay all of our bills on time each month but there's never much left over, let alone trying to save. We had a huge financial setback when my spouse lost his job after 15 years and had to pay health insurance on our own for over a year - that wiped us out in our savings.
I feel at this point that I need to either a: file bankruptcy which will allow us to save that money each month for a mortgage; or b: use the retirement funds and wipe the slate clean.
as to full disclosure - I'm trying a little at a time - I feel like our financial status right now is entirely my fault and fear it will destroy our marriage
Thanks for your advice.

[HHM]

Yeah, $40,000 of credit card debt is quite a bit given your income and your expenses are up there. I do think you have alternatives to BK. If your goal is to buy a house, you may want to do that first, then declare BK if you can't make ends meet.