No clue what to do!

[Tobit]

Man, I have no clue what to do. I am about $50K in debt and have no real assets just my car which is 11 years old and only worth $1500. My income, before taxes, is only $1600/mo, of which the IRS is garnishing about $230 for back taxes.

Half of the $50K is medical and the other half is back taxes. I'm not sure where to begin and whether I should talk to a bankruptcy attorney or a tax attorney first. If it wasn't for the back taxes, I could probably manage the medical and vice versa if it wasn't for the medical. I don't know how I can manage both especially with compounding interest on taxes.

Any ideas on how to move forward would be greatly appreciated.

Thanks.

[jp2861]

The way I would look at it is kind of like this.

Option 1 is to increase your income. If this is possible it could save your credit rating, if it isn't already damaged.

If option one isn't available, ask yourself this question: Can I pay off my debt within the next five years, on my current income. If yes, go ahead and suck it up for five years and pay your bills. If the answer is No, then go ahead and file for whatever debt is dischargeable.

Before you start talking to attorneys I would suggest sitting down and really giving some thought to your options. Bankruptcy is a big lifestyle change for many folks. If you file you need to make sure you can sustain yourself for a few years living on a cash basis.

[Tobit]

Option 1 is to increase your income. If this is possible it could save your credit rating, if it isn't already damaged.

If option one isn't available, ask yourself this question: Can I pay off my debt within the next five years, on my current income. If yes, go ahead and suck it up for five years and pay your bills. If the answer is No, then go ahead and file for whatever debt is dischargeable.

Before you start talking to attorneys I would suggest sitting down and really giving some thought to your options. Bankruptcy is a big lifestyle change for many folks. If you file you need to make sure you can sustain yourself for a few years living on a cash basis.

Thanks for the reply. My only income right now is social security disability. I am not sure when or if I will be able to return to work. I have been living on a cash basis, check to check, for 4 years, I'm just not able to gain any headway on my debts. The biggest problem is with the taxes, half of my debt to them is in penalties and interest.

[Tobit]

Added note, none of my debt is from credit cards or loans. It is all medical and state/federal taxes.

[keepmine]

Under some circumstances, back taxes may be discharged in bk. You must have filed a return and the taxes are older than 3 years and a couple of other provisions must be met.
Get a few consultations with bk lawyers and get all of your options explained.