Not Sure What To Do

I am thinking about filing for bankruptcy and I am not sure if I should...and I'm not sure if I have any other choice. I am 36 years old and I have about $40,000 in credit card debt. (I also owe some taxes and student loans, which from what I have read cannot be put in a bankruptcy.) I am self-employed and in the last year, my business was hit by the economy and the fact that I got ill for several months last year and could not really work for a while. I can't say that I have much to show for all of this debt. I don't own a lot of expensive things and although I did do some travelling over the years, for the most part, I had been using credit cards to pay for necessities when I was working a job that didn't pay enough to handle everything or times when the money from my business couldn't.

I received a letter from a lawyer for one of the credit card companies recently saying they are going to sue me. It doesn't seem like I have any option but to file for bankruptcy. It doesn't seem to make sense to hire a lawyer to defend myself against this just to have another company come after me too. I don't have any assets that they can take, but I did read somewhere that they can empty your bank accounts if they win a judgment. I am also thinking about doing the bankruptcy on my own since I don't have a lot of money.



I just wanted to vent and perhaps get some insight. I feel like a fool and that I am too old for this type of thing.

lawandorderfanatic lawandorderfanatic
36-40, F
3 Responses Feb 24, 2010

You are not alone my friend. At one time my business was making 100K a year and my wife worked part time, 911 happened, the economy kept falling and I kept trying to turn things around. I tried networking groups, small business customers, a part time job and an ebay business in addition to my business. I got a 2nd mortgage and kept trying to get back to being the high earning professional I had been for years. I was brought up to believe I should never admit defeat and I could do it if I just worked harder! Now I know to tell my kids to look at situations objectively and if they seem to be too messed up, it's okay to admit it's too difficult to fix and okay to change direction. I refused to admit defeat, so I had to keep fighting which meant money had to come from somewhere...these things required capital.

I am now a little past where you are at about 45K of debt. My business instead of thriving because of the part time job, made clients leave becaus eI wouldn't be there when they called. I emptied my SEP IRA to pay the credit card companies what I could, since they wouldn't stop harassing me. This was my wife's money too and i couldn't bear to tell her after the 2nd mortgage that I had failed again. Now I found out that money would have been protected in a bankruptcy! This is why I say the CC companies are evil. They don't care if you die in the street as long as they get paid.

I am filing this week. I am ashamed that I failed and was so stupid in some of my business decisions. I wish I could pull the solution out of my a**, but the interest alone is crushing any chance of relief. I figure my kids and my wife are better off if I take the hit for some unprotected debts, lose some inventory and have credit consequences since it gives me a chance to start over. It's really hard starting over at 52, but it's better than being a broke slave to the credit card companies, until I just have to file anyway since I can't sustain those huge payments. Citibank was the worst! They encouraged me to spend and even when I was paying minimum, kept giving me more credit and then charges the most in interest.

Why should those bastards get bailed out and we get financially ground to dust. Be sure you know your rights and protect your IRA if you have one. There is actually a couple great apps for iPhone and Android that will pickup and hang up on specific numbers. If some jerk is calling night and day, get the numbers in this app and they won't even reach you. I turn off notification so I don't even know they call! :-)

Good luck and chin up!

Hello there, you are not alone. I was running my own business and just starting to turn a profit after 6 hard years of running trucks. No frivolous credit card purchases, but there was a lot. I'm in the middle of chapter 7 myself. I was being sued and I think a judgement was made according to them, them being Discovercard. I had others, and 3 trucks "my pride and joys". All gone now so like you not much to show for all that debt. I'm 7 months past my one and only meeting with creditors that didn't show up. Today I'm awaiting discharge hopefully. I intend to restart if possible later on but, for now it's a job and try to put some away each week. I was only able to file with family help. Out of pocket was 1300 for the attorney to file. I know borrow to pay off debt, seems backward but, its a family matter where the help came from. Another attorney was like the above comment arrogant and wanted about 2700 to file chapter 11 I think. If you really don;t have any assets or much money left chapter 7 may be best. I found my attorney through bankruptcyme. You input your zip I believe and they can point you to a local attorney. I was doing ok paying my bills pre-recession and fuel spike in 08. Things happen to the best of us, you are not alone. As I wait I am nervous of the outcome but, have hope it will end better soon. My biggest downfall was NY Child Support a debt of 3600 wiped out over 200K invested just like that. Good luck and get on a lawyer as fast as you can once they start seeking to sue you. It may very well be how you survive it.

I completely understand the feeling you have right now, and I can give you a little hope. First, let me give you some facts:<br />
Bankruptcy goes on your record for 7-10years. <br />
$40k can be paid off in 10yrs (20% interest) if you pay $773/month (bankrate.com)<br />
I didn't owe taxes, but I believe you are right. I will say that if they are CORPORATE taxes, and the business was a corporation, you may be able to try to send them a copy of the dissolution papers, a copy of your personal bankruptcy papers (once it's over) and a letter explaining the situation. At worst, they will transfer the taxes to you personally. At best, they'll waive them. My CPA said "Always Negotiate". Also, if you ARE filing bankruptcy, be sure to include the taxes in your liabilities because technically you do owe them.<br />
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All that said; go to a lawyer & see if it's best for you to file. Don't go to the TV lawyers, though (as if that needs to be said). Go to a neighborhood lawyer. They should give you a FREE CONSULTATION. If they do not, move on. Another one will. And if you don't like the lawyer, move on. I did not like my first lawyer - she made me feel bad. She was arrogant. She asked for my cell phone# & I said "I don't have one" and she said "What kind of person doesn't have a cell phone?" and I said "A person who is ready to file bankruptcy, and doesn't need the added expense." Of course, that wasn't the only bad experience, and so I cut her loose after 1 meeting. I met a new local attorney, and he was great! He said some things that I will pass on to you:<br />
He has seen a lot of bankruptcies, and his experience is that it's not for the person who went crazy at Macy's - buying the latest $400 dress, or the newest electronics. It's for people who are devastated by being SELF EMPLOYED in a bad economy, Medical Bills, and primarily responsible people who just get in over their heads. <br />
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My recommendation would be:<br />
* If you can, pay your taxes with the credit card. If you need to take a cash advance, do it.<br />
* If you're going to file, STOP PAYING. I kept paying thinking it was the right thing to do, but really, that money is just lost. What's the difference if the credit card company writes off $6,000 or $6,200? Keep the $200 payment in your pocket & buy food. I know that goes against your gut, but I was writing $1000 checks to the credit card companies in the last months, and that money is just GONE. <br />
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I don't have a lot of sympathy for credit card companies. The interest rates are really exorbitant, and frankly, that's a large part what got you in the mess you're in to begin with. If the rates were reasonable, your cards would be paid off. <br />
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Oh! The best part? If you do file Ch7, and the only bills you have are school, and taxes, and the lawyer has negotiated a lower monthly payment for those, then that daily stress you're feeling, that feeling of 'Why bother working when all my money's going to the debt?' - that goes away. And the sun seems just a bit brighter. And you can go out & do things once in a while - of course, without a credit card, but I wouldn't have it any other way!