Need advice: looking bankruptcy in the face

[twk001]

DH is now officially a non-teacher for his district. Even though his contract does not expire for about 10 weeks, and we will get pay/benefits through then, we have absolutely no idea what we will do if he does not find a new teaching job before then. We are praying hard (please join us in our prayer) that several leads he has will work out and a job will be offered…but what if not? we have no savings, HUGE CC debt, and a small home that we love (and would not consider letting go). We have been through Dave Ramsey FPU and he says “don’t pay the CC bills”. but we don’t want to be sued either. Does anybody have any good advice? DH will get unemployment, but it will amount to about 30% of what he was bringing home before. I do have a 401- a loan may be an option for a while…also, i will be working extra…we want to avoid bankrupcty, but with 60k in debt, and my pay making up the majority of income, we won’t make the CC bills (some, but not all). lastly, what can somebody tell me about the “hardship” prgrams that CC companies offer? we can find info about how to ask for one, but no info about what exactly they are. thanks-twk

 

[rapunzel77]

hello Twk,

I know it is a rough time to go through. My husband and I have also gone through a lot of difficulty. There are some hardship programs available. Sometimes you can find out about some of those programs from your bank. As for as not getting sued by the CC companies, that may or may not happen. They are notorious for harassing you with phone calls and bills. I suggest seeing a debt counselor to help with that. IF you are unable to pay your necessity bills (electricity, water, rent, etc) then its possible that Catholic Charities can help as well. I hope things get better for you. All of us are suffering in some degree from this lousy economy.

 

[Miss_Linda]

TWK, I am afraid I don’t have any advice or answers to your questions, I just wanted to let you know I will be praying for you and your situation. :console: I am truly sorry you are going through this and I know it must be a terrifying time.

I had a very good job at a law firm last year, and I was laid off (along with 50 other legal secretaries and 30 attorneys–all from the same office). By God’s merciful grace, I found a new job literally the week my severance payments ran out. Unfortunately, the new job pays quite a bit less than I was making before but it covers my immediate bills and allows me to pay for electricity and groceries (and not much else). I am just praying for the day when I can find a better paying job and get back on track. So, I really sympathize with your situation and I know how terrifying it can be.

I wonder if you could contact your credit card companies and explain the situation to them. Perhaps they could defer payments or allow you to pay less than the minimum due for a while?

I am truly sorry for this very difficult time, and I will be praying earnestly that God will open paths to a much brighter future for you and your husband!

 

[cradlecatholic5]

So sorry to hear of your plight. This economy is in such disrepair. My husband & I are in the same boat, we both have jobs, (thank you God!), but his pays less than what he’s made in the past (laid off). We’re looking into BK, ours is medical bills and a few old CC bills.

I keep trying to put it at the foot of the cross.

God Bless,
-K

 

[kevinsgirl]

I don’t have any advice about bankruptcy but our income in less than half of what it was a year ago since I became a SAHM and this website has helped me save tremendously: hip2save.com I’ve cut about $100 off our monthly grocery bill and I’ve gotten nearly $800’s worth of stuff free by learning to match coupons and sales and store programs…and that’s just in the last 4 months. Every little bit helps so I thought I’d mention it just in case it can help you cut down the grocery bill and give you more money for the bills!

 

[Onedayatatime]

We are going through the process at present. After 3-5 years of virtually no income, the debt just crushed us. It sounds bad, but bankruptcy is there for a reason. Aside from the shame of it (I understand that fully), sometimes you just have to reorganize. I am not an attorney, but have been handling most of the process ourselves. (As we could not afford one). Ours is going something like this:

Declared bankruptcy in Jan

• All assets are frozen
• Set up a single account called a DIP account
• Close all other accounts
• Report everything montly to the US Trustee
• All credit card and other payments outlined in the bankruptcy remain unpaid
• We are working out a reorganization plan based on new “income” realiites
• Until the US Trustee agrees that we have a new plan and our creditors accounts are either wiped or reduced, we remain in bankruptcy

My wife has a new part time job, and I have reorganized our business (which was the prime cause of the bankruptcy in the first place), and we seem to be emerging. I think it will take another 6 months before we emerge. I hope we can afford an attorney soon, to start working it.

The main thing to avoid in all this is the fear. After all it’s only possessions, and to get the feeling back of being in control of finances without all the debt is going to be worth it. We have each other, the Lord and our health.

Be Not Afraid and pray for guidance. Also try and find a good attorney, and if possible, don’t rush either in or out. We went Chapter 11 and it is more complicated, but we have more time to reorganize.

 

[Patrickulating]

twk001,

In secular life, I am a bankruptcy lawyer. If your debts are ruining your lives, you have the right (and perhaps even the obligation to your family) to consider filing a bankruptcy. I have seen the devastating effects that debt can have on a family and their happiness. You need to get out of debt. Bankruptcy might be of some help to you.

I routinely tell my clients that they should not file a bankruptcy because they are scared. They should only file bankruptcy if it will dramatically improve their lives.

I don’t know where you live, or even most of the specifics about your situation, so I cannot give you much solid advice. I will say, however, that most people who file bankruptcy are able to save their houses. There are, of course, exceptions to that rule.

I would urge you to seek out a good bankruptcy attorney in your area to talk with. Please do this before you take out a 401k loan. It is impossible to borrow your way out of debt. Taking a 401k loan may have some nasty tax implications if you are unable to pay it back. Please find a bankruptcy attorney to talk to ASAP.

Peace