Am I eligible to file for bankruptcy?

[TravisMcCoy]

I owe about 22k in credit card debt.
I have been enrolled in a debt management program for 21 months paying $765/mo.

I can afford my payments and other bills, but I am left with very little money every month.

Is it possible in my situation to declare bankruptcy and start with a clean slate?

[ccsjoe]

Travis,

To answer your question, you need an entire look at your financial picture. Ultimately, you need to know if you file BK which chapter you are going for. I suggest you start by taking the online means test available at nolo.com to determine whether you would qualify for a 7. I presume that since you are currently making payments AND making a living, albeit with little left at end of month, that you would probably qualify for a 13, not a 7. Run your numbers first and see where you are at.

[TravisMcCoy]

I was just curious if it's possible to file for bankruptcy even if you can pay your bills every month?

[ccsjoe]

Yes, it is possible. Albeit most likely not a chapter 7

[TravisMcCoy]

Does Ch13 forgive any part of your debt or does it take everything you owe and turn it into an affordable monthly payment plan. I am already participating in a debt consolidation program.

[ccsjoe]

13 is a payment plan, paying priority and secured creditors first, so it can leave unsecured creditors with anywhere from 0% to 100% depending on your income. Priority creditors are things like back-due taxes.

[TravisMcCoy]

I only have two credit cards with one creditor. I don't owe anything else to any other agency/organization.

[ccsjoe]

From what you've stated it sounds to me like BK would not be the way for you to go unless you qualified for a CH7. No way to know that until you run through a means test (indicated above). Can't see any advantage for you to do a CH13. Just make sure your debt management company is above board and legit, too many scam stories in these boards about them.

[LadyInTheRed]

Make sure you understand the plan you are in. How much of that monthly payment is going to actually pay of the debt and how much is going to the DMC? Have both of your cards agreed to a payment plan, lowered interest and/or decreased payments? Do you know for certain when you will have the debt paid off? You can do what a dmc does on your own. The fact that you have only 2 creditors would make it relatively simple.

A good rule of thumb is that if your income is above median in your state, and you can't pay your unsecured debt off in 60 months, a Chap 13 MAY be a good option.

According to the calculator at http://www.bankrate.com/calculators/...alculator.aspx, if you have $22K debt at 20% interest and paid $582.87 per month, you'd have it paid off in 60 months. Increase the rate to 30% and you would have it paid off in 60 months with payments of 711.77 per month.

If all you have is $22k in credit card debt, and you can make the payment your are making and still cover your necessary expenses without incurring more debt, BK probably is not the answer, especially if you are above median and can't file a 7. Your best bet may be to ditch the DMP and try to get the credit card companies to accept a payment with a reasonable interest rate.

You can find the median income for your state and family size at http://www.justice.gov/ust/eo/bapcpa...come_table.htm