Babies and Bankrupcy poll

[wifeNmom.02]

Mom has large credit card debt (from college)…Met husband 1 year after college, while working 2 jobs to pay back…bankruptcy not even an option!..Got good job after got married…2 years later have 2 babies…now things are different…mom away from babies 6 hours (afternoon to bedtime) per day 5 days per week…sees hubby 10-30 min. per day 5 days per week…hubby keeps the babies at home daycare not an option!..what should mom do

1. File bankruptcy on her debt, babies need more mommy time & spouses need more time together.
2. Keep working, pay back debt, daddies can be “mommies”, and spouses will have the weekends.

 

[familyof8]

I think I may have voted for the wrong one. I read the poll first, then went down and read your post and then went back up and clicked the one that I thought was the “work and pay back” but after it went through, I realized I actually clicked on the bankruptcy one.

The reason I chose the pay back one is because of the fact that bankruptcy is not a “do no harm” option. It does cause harm to others. I understand that your babies are not seeing you as much as you would like, but you, not others, are responsible for the debt you created. You are not infirmed and physically unable to repay the debt. It is just more painful to work and pay it off.

Perhaps, if you and your husband believe you need to be at home, you should investigate other options. Perhaps you could take care of other children at your home so that you could stay home with your children and still have income. Perhaps one of you could work on Saturdays instead of through the week. Perhaps your husband could work 2 jobs. Maybe you only need to consider this in more than ''an all or nothing manner." There are more ways to make money then leaving your house. Sewing, pet sitting, daycare, computer work, etc. Working on Saturdays would perhaps give you and your husband more time together even if it meant taking longer to pay back the debt.

This is a moral question. What is your Christian obligation according to the Commandments?

 

[Fortiterinre]

Familyof8, these are excellent suggestions. I would need to hear that many of these had been tried and failed before coming close to recommending bankruptcy. The big B is not as easy as legal marketers make it seem, and it is ESPECIALLY damaging to a family.

 

[wifeNmom.02]

Yes you are right. We are thinking of asking our credit cards to “settle”. At this point, we have cut expenses and right now my husbands job doesn’t pay enough for me to stop working like we wish.

 

[Almeria]

My husband and I were considering bankruptcy several years ago as well–it seemed to be the only way. I found one of the debt counseling programs, and that turned out to be a godsend. They have good relationships with credit card companies, and can negotiate a better payment plan that you can on your own. It’s definately worth looking into before bankruptcy. We’ve gotten all but one card paid off, and there’s not much left on that one now. We’re no longer paycheck to paycheck, and have done well enough where my husband could quit working and go back to school full time. Check into the debt counseling programs–it’s worth it.

I don’t think the non-profit organization I used is around any more, and I know there were major problems with several programs. Don’t let that stop you, though! Talk to your parish, or diocese–I’ve heard several have their own programs now, especially in the major metropolitian areas. If they don’t, call the BBB and ask for a repetuable company. Go with a non-profit/not-for-profit organization, and you should not have to pay the organization–if they ask for money to do this, they are not a good company.

God bless you and your family, and hang in there.

 

[Faithful_2_Rome]

Bk gets demonized too often…examine your conscious and talk to your parish priest.

 

[Meggie]

Just when your debts are paid off stop working…or just until your husband can reasonably pay off the depts. Even though your children are young they will eventually learn from this. See if it is possible for you to cut back on 1 hr a day…you would have more time with your husband and kiddies. Also get direct deposit or something so every penny you earn goes directly to the debt and you are not relying on your income at all.

 

[Anonymous]

wifeNmom.02:

Keep working, pay back debt, daddies can be “mommies”, and spouses will have the weekends.

I take issue with this. My man can change a diaper and then go drop a motor in a Chevy. He is no mommy though he does stay at home with the kids. (I explained that all in another thread.) However, that is not my point.

You appear to be looking for validation for your decision to declare bankruptcy. You will get it from some but not from me. You incurred the debt and you should pay it off. Besides, declaring bankruptcy will ruin your credit (probably) forever. What kind of future will that afford your children?

You can cut **so **many things in order to repay. How about dropping your ISP? Get serious about it! Many working families don’t have the luxury of weekends with their spouses! Look at that as a profound blessing!

Peace

 

[RichT]

Almeria:

My husband and I were considering bankruptcy several years ago as well–it seemed to be the only way. I found one of the debt counseling programs, and that turned out to be a godsend. They have good relationships with credit card companies, and can negotiate a better payment plan that you can on your own. It’s definately worth looking into before bankruptcy. We’ve gotten all but one card paid off, and there’s not much left on that one now. We’re no longer paycheck to paycheck, and have done well enough where my husband could quit working and go back to school full time. Check into the debt counseling programs–it’s worth it.

I don’t think the non-profit organization I used is around any more, and I know there were major problems with several programs. Don’t let that stop you, though! Talk to your parish, or diocese–I’ve heard several have their own programs now, especially in the major metropolitian areas. If they don’t, call the BBB and ask for a repetuable company. Go with a non-profit/not-for-profit organization, and you should not have to pay the organization–if they ask for money to do this, they are not a good company.

God bless you and your family, and hang in there.

I work in the mortgage business and I deal with credit scores every day. It is important to note that Consumer Credit Counseling will affect your credit rating the same way a chapter 7 bankruptcy does. It may be the noble thing to do, to pay off your debt, just don’t be surprised to find out your credit rating will be adversely affected. When you enter into credit counseling, your credit report is updated to show you are in counseling. Revolving credit companies spend a lot of money funding consumer credit companies, and in fact many are owned by revolving credit companies. Think about it, better to get some, then none. One might say, if my credit rating is going to be affected the same way, then why not just wipe the slate clean? Well, that is something you have to decide for yourself. Just for the record, it is easier for me to get a loan approval for a client when they are just out of a chapter 7 BK then when they are just out of credit counseling.

 

[RichT]

Anonymous:

I take issue with this. My man can change a diaper and then go drop a motor in a Chevy. He is no mommy though he does stay at home with the kids. (I explained that all in another thread.) However, that is not my point.

You appear to be looking for validation for your decision to declare bankruptcy. You will get it from some but not from me. You incurred the debt and you should pay it off. Besides, declaring bankruptcy will ruin your credit (probably) forever. What kind of future will that afford your children?

You can cut **so **many things in order to repay. How about dropping your ISP? Get serious about it! Many working families don’t have the luxury of weekends with their spouses! Look at that as a profound blessing!

Peace

I agree with most of your post. I do believe that one should take the responsibility in regards to their debt, however, I have seen many well meaning people who get into trouble due to a loss of job, or a failed business. They are often faced with a choice of feeding their families or paying their debt. They are tough choices, but I have seen some who would be in serious trouble had they not filed for bankruptcy.

In regards to someone’s credit being ruined forever. Thats simply not true. Sadly, most people are inundated with credit card offers within months of a BK discharge. Although, this gives them a chance to rebuild their credit, many end up with too much debt again.

 

[justLaura]

wifeNMom…in another thread here, you mention that your in-laws want to help you with your finances. Certainly I would take a willing offer to help with expenses – even as a no-interest loan, if need be – before declaring bankruptcy. As someone mentioned, it’s not a victimless situation, as creditors are business owners and employers, with the ramifications of outstanding invoices making ripples down the line.

 

[Hopeful]

Bankruptcy is one of those things that you don’t believe in till it happens to you.

In the situation you described above though, I think you should go to debt counseling. Get those bills paid off before you and the children get any older. Believe it or not, babies and small children are not as expensive as middle age and the teenage years. You have your health right now, you might not in 15 years. Even the littlest health/dental problems can keep you broke later when you won’t have the drive, nor energy to work two jobs.

Having said that : talk to a priest and a christian debt counselor. Pray, consider all angles. Guilt can make you feel worse than debt.

 

[Anonymous]

RichT:

I have seen many well meaning people who get into trouble due to a loss of job, or a failed business. They are often faced with a choice of feeding their families or paying their debt. They are tough choices, but I have seen some who would be in serious trouble had they not filed for bankruptcy.

Point taken.

In regards to someone’s credit being ruined forever. Thats simply not true.

I recently bought a home. I was asked by the bank and by the insurance companies I investigated if I had ever filed for bankruptcy. Seemed logical that if I had, my chances for getting the mortgage or the lowest insurance premium would be low. Am I missing something?

 

[RichT]

Anonymous:

Point taken.

I recently bought a home. I was asked by the bank and by the insurance companies I investigated if I had ever filed for bankruptcy. Seemed logical that if I had, my chances for getting the mortgage or the lowest insurance premium would be low. Am I missing something?

Actually, if a person has rebuilt their credit after the bankruptcy, and they are out of it, meaning the discharge date meets the guidelines of the lender, then they will qualify for the same loan that someone who hasn’t filed will. The bulk of your credit scores are based on the last two years of your credit history. If a person has a BK that was discharged two years ago, and they have built up their scores since then to a high level which is quite possible, then they are treated the same as someone who hasn’t filed for a BK. Now keep in mind, that lenders requirements will vary depending on their guidelines. Some will require you be out of a BK for four years, versus some who only require one month. The point is, is that as long as you meet the guidlenines in regards to the time out of BK, then the BK no longer is a factor. The loan decision is based on your credit score. Yes the BK itself will affect your score but becomes less a part of your score as time goes on. I have seen people who have 700 credit scores with a BK that was dicharged two years prior. I have clients right now who have been out of bankruptcy for two years and have scores in the 680 range. 680 and above is considered to be A paper, so they will get a mortgage with a really great rate just like anyone else with a 680 score. The BK is no longer an issue for them.

We as lenders are required to ask by law if a person has ever filed for bankruptcy or have ever had a property foreclosed as well as other questions. This is not to disquaily them but to help the government in tracking certain things. They are very interested in the decline status of loans. They do this to make sure each applicant is treated fairly. In other words, we shouldn’t be declining somebody due to a BK if it was discharged 6 years ago. A BK, by the way, will drop off your credit report entirely after ten years. At that point you no longer need to disclose it to anybody. So no, your credit will not be ruined. Bruised maybe, but bruises go away.

 

[RichT]

I should also add that yes it is true that if you are looking to get a loan only a few months out of a BK, you will pay higher rates than most. But again, as time goes on, this gets better. Five years ago, there weren’t hardly any lenders that would even consider approving a loan unless you were out of the BK for at least four years. Today there are many who will do loans with a lot less time out of the BK.

 

[Anonymous]

I have seen people who have 700 credit scores with a BK that was dicharged two years prior.

I am amazed! Thanks for the info, RichT. You are** very** knowledgeable. Perhaps this info can help our poster. I still vote “no” but with a tad less conviction.

 

[LabChick]

I would say stay far, far away from bankruptcy. It can take, depending on where you live, up to ten years to have it discharged, and then an additional two years to get clean credit.

I’ve seen many of my collegues file for bankruptcy after they had children and where drowning in debt from their student loans. You would expect that they couldn’t get a decent morgage, but they also had problems getting car loans, cell phones, apartments, internet service, checking/savings accounts, essentially anything that requires a credit check.

Of course, if you file for bankruptcy, it not only goes on your credit history, but your spouse’s. I’d seek credit counseling and just keep working to pay it off. I know it’s tough not seeing the spouse or kids, but it really does work out better than having a BK on your credit.

 

[Regi]

I have a couple of suggestions before you consider whether or not to file bankruptcy. Many people do this when just a little more discipline and living more simply would make problems go away very quickly.

Make a budget every pay cycle. Write down where every cent goes on paper and DO NOT spend any money for anything that is not budgeted. It really helps. We have been doing it for about a year and have had so much increased control over our money and spending. It has helped us to pay off about $20,000 of our $30,000 debt so far! We can see the light at the end of the tunnel now.

A couple of resources -

1. Catholic Answers has a book called “The Catholic Answers Guide To Family Finances” by Philip Lenahan. This book uses biblical references to discuss finances, budgets and getting out of debt. It contains worksheets and a lot of valuable tools to help you to accomplish financial security.
2. There is a radio call-in program called “The Dave Ramsey Show”. He has a web site (daveramsey.com/) that will list where his show is available in your area. Dave promotes being ‘debt free’ and uses biblical principles to illustrate his points. He is not Catholic, but I appreciate the values he imparts on his show. He has several books out - “Total Money Makeover”, “Financial Peace”. He provides counsel from the aspect of his own story - making a lot of money at a young age, then losing everything and filing bankruptcy, then starting his counseling business and coming back to be successful. He has helped me a lot and I highly recommend him to you.

Steer away from bankruptcy and non-profit credit counseling services that hurt your credit reports.

God bless you and help you to discern what he wants for you.

 

[RichT]

LabChick:

I would say stay far, far away from bankruptcy. It can take, depending on where you live, up to ten years to have it discharged, and then an additional two years to get clean credit.

I’ve seen many of my collegues file for bankruptcy after they had children and where drowning in debt from their student loans. You would expect that they couldn’t get a decent morgage, but they also had problems getting car loans, cell phones, apartments, internet service, checking/savings accounts, essentially anything that requires a credit check.

Of course, if you file for bankruptcy, it not only goes on your credit history, but your spouse’s. I’d seek credit counseling and just keep working to pay it off. I know it’s tough not seeing the spouse or kids, but it really does work out better than having a BK on your credit.

First if you file a chapter 13 bankruptcy which requires you to repay a portion of your debt, that can take many years to finish depending on the amount of debt. A chapter 7 is usually much quicker, often less than a year from filing to discharge. Yes, the laws vary from state to state, but once discharged federal law allows for the BK to stay on your credit report for 10 years after the discharge. As far as this going on your spouses credit, it depends again on what state you are filing in. In most states, if you file by yourself and are only requesting to have debt that only you are responible for discharged then your spouses report is not touched. Please understand, I am not advocating bankruptcy, just stating some facts. You will have just as many problems getting new credit whether you filed bankruptcy or went through credit counseling. In some cases, it is even harder to re-establish credit after credit counseling than with a BK. Believe it or not, I’ve seen it in the industry I work in. Unfortunately there are too many fly by night companies out there who are willing to take your hard earned money to file a BK for you, and then they fail to do it correctly and you end up suffering in the long run.

What happens if the person needs credit while involved in credit counseling? That’s easy! They wont get it. Period. End of story. After a chapter 7 has been discharged moet people are amazed to find how easy it is to re-build their credit. In fact, there are revolving credit card companies just dying to give big fat credit limits to those who just got out of trouble. Sad, but true.

 

[Almeria]

It is important to note that Consumer Credit Counseling will affect your credit rating the same way a chapter 7 bankruptcy does.

Really? Ouch!

I’d still suggest it as a last resort to bankruptcy, though. It’s not that I think bankruptcy is a sin, but I do believe that we have a moral obligation to resolve our debts if possible.