QUESTION
Should I consolidate my credit card debt or should I file for bankruptcy?
Asked on Mar 08th, 2013 on Bankruptcy - Michigan
More details to this question:
I have about $17k in credit card debt, across 4 cards. I also am about to get my car repossessed. My income has dropped and I can't pay these bills. I can barely feed my kids and pay for my husband's medication (and his hospital bills on top of that). How much will I have to pay each month if I consolidate my credit cards? Or how long will bankruptcy take and how much does that cost? Will that get rid of all my credit card debt?
16 ANSWERS
Bankruptcy Attorney serving Hampton, VA
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Haven Law Group, P.C.
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You should definitely consider bankruptcy! You should immediately schedule a free consultation with a competent bankruptcy lawyer to discuss all of your options. But it sounds like bankruptcy could really benefit you.
Answered on Mar 14th, 2013 at 2:30 PM
I can't answer the part of your question that talks about how much you would have to pay if you consolidated your credit cards. That will depend on who you consolidate with and at what interest rate. A Chapter 7 will take about 6 months from the time of filing, but your relief will be nearly instantaneous. It will get rid of your credit card debt and your current medical bills too (you can keep paying on these if you wish). The cost will depend, again, on who you use, expect to pay in the range of $1000 for a 7.
Answered on Mar 12th, 2013 at 7:43 PM
If you do not have enough money to cover your cost of living expenses, how do you expect to be able to pay your credit card debt, even if the amounts are consolidated? In most instances credit card debt gets discharged in bankruptcy. You should contact an experienced bankruptcy attorney in your area, who can explain to you the cost of bankruptcy and how long the process should take.
Answered on Mar 11th, 2013 at 1:30 PM
Richard hirsh
It appears that a chapter 7 bankruptcy would discharge aloof your debt, including any potential deficiency on your car that is about to be repossessed. A complete analysis is not possible without knowing your income, and whether you own a home with any substantial equity. I do not quote fees in this medium.
Answered on Mar 11th, 2013 at 1:29 PM
These are two viable options, however filing for a bankruptcy will eliminate debt where consolidating is placing your debt into one payment. If your income has lowered bankruptcy may be a viable option especially if you have missed payments.
Answered on Mar 11th, 2013 at 1:29 PM
Bankruptcy Attorney serving Overland Park, KS
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Wellman Law LLC
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I'm not sure that you have the option of consolidating your credit cards. That would require a loan.
Perhaps you're referring to debt settlement. This requires dealing with each creditor individually and will costs thousands, but there's no set formula for what all creditors will accept.
A Chapter 7 case will allow you to discharge all of your dischargeable debt, but there remains the question of whether the cards are from a store that takes a Security Interest in property you purchased there.
You may actually be able to save your vehicle in a Chapter 13 plan and possibly file the case for very little in upfront costs and also discharge some if not all of the credit cards debt.
The ultimate cost of filing under either Chapter could range anywhere from approximately $1,500 - $4,000 depending on the circumstances. I would recommend consulting an attorney regarding all of the facts of your situation.
Answered on Mar 08th, 2013 at 2:51 PM
Bankruptcy Attorney serving Charleston, SC
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Davis Law Firm
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Why consolidate your bills unless you can deal with your car situation? It is very likely that after the repossession, the creditor will claim that you owe money for the difference between the amount owed and the amount the car sells for. You may be better off doing nothing and not filing bankruptcy either. If you cannot afford you regular expenses and husbands medications, you may need to wait until the income problem is fixed. Filing bankruptcy on bills you have now will not help you with future bills you seem likely to incur. You need to meet with a bankruptcy attorney and get advice about when to file. You also need to think about steps to increase your income in the future, perhaps by additional training etc. Bankruptcy is about so much more than just bills. Getting a fresh start is more important. If you were going to walk across a desert, you would make sure you have the necessary supplies before you started. Make sure you have the supplies(skills) to make it across life.
Answered on Mar 08th, 2013 at 2:50 PM
There is no such thing as consolidating credit card debt. This is simply a deceptive term for debt settlement, which requires you to stop paying your credit cards while setting aside money in order to possibly settle the debt once you have saved up enough $$$ to do this. In the meantime, the company advising you is taking $50 off the top to do nothing for you. If you can barely pay your living expenses, how do you expect to pay for a debt settlement program? Further, debt settlement is usually harder on your credit than bankruptcy because with DS, you lose points month after month because every account is delinquent. Bankruptcy, on the other hand, is a one time event. Even with a bigger drop in credit points due to bankruptcy, if the little dings each month on four accounts are multiplied out by many months that you don't pay, what do you think the result is?
Answered on Mar 08th, 2013 at 2:49 PM
Bankruptcy Law Attorney serving Livingston, NJ
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Law Office of Stuart M. Nachbar, P.C.
2 Awards
I never recommend Debt Consolidation. You may be able to wipe out all of the Credit Card Debt, and still keep your car, surrender it. A chapter 7 takes about 6 months start to finish provided you cooperate with your counsel. Cost varies from 1500 to 3000, plus filing fees and credit counseling. Speak to a bankruptcy attorney in your State. My firm is in New Jersey.
Answered on Mar 08th, 2013 at 2:49 PM
2 Awards
I recommend filing bankruptcy. This will allow you to save your car through a chapter 13 repayment plan. The fees for a Chapter 13 are $4500 but you can pay a portion up front and the balance over time through your repayment plan. If you're under median income for Nevada you'll pay 3 years or until you have paid your car arrears in full (you have to stay current with the car payments going forward). If you can pay your car arrears off earlier than 3 years then you pay a portion of the credit card debt & medical debt too. I highly recommend that you seek advice of counsel to help answer your questions prior to filing.
Answered on Mar 08th, 2013 at 1:22 PM
Sounds like you may be an excellent candidate for a Chapter 7. Call an experienced attorney, get a low rate quoted in advance before you file.
Answered on Mar 08th, 2013 at 1:21 PM
Bankruptcy Law Attorney serving Austin, TX
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Law Office of Susan G. Taylor
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Doesnt sound as if you can pay a consolidation company. The level of debt you have & your decision to file bankruptcy to discharge the credit card debt is a personal decision, because he will affect your credit. Also, future employers might review your credit report/ask you whether you've ever filed bankruptcy.
Answered on Mar 08th, 2013 at 1:20 PM
Bankruptcy Attorney serving Phoenix, AZ
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Law Office of D. L. Drain, P.A.
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Be very careful about working with anyone who purports to help you consolidate your credit cards. The only company that I recommend is the National Foundation of Consumer Counselors: www.NFCC.org. This is a true non-profit and has been around since the 1950. As to bankruptcy - please understand that bankruptcy is a very complicated process. It is wise to talk to an experienced bankruptcy attorney before deciding to take this important step.
Answered on Mar 08th, 2013 at 1:20 PM
Estate Planning Attorney serving Wilmington, DE
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Reger Rizzo & Darnall, LLP
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That is a personal decision. To file a Chapter 7 it is $306. You can petition court for hardship if you cant afford filing fee. If you file a Chapter 7, within 6 weeks there is 341 meeting then about 60-90 days after that your debts are discharged.
Answered on Mar 08th, 2013 at 1:19 PM
Bankruptcy Attorney serving Livonia, MI
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Charles J. Schneider, P.C.
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If you qualify for bankruptcy you would not have to pay anything and it sounds like you cannot do any payment plan under debt consolidation. To do debt consolidation pay stubs need to be viewed.
Answered on Mar 08th, 2013 at 1:19 PM
Deciding whether or not to file for bankruptcy is always a tough decision. It stays on your credit report for 10 years, and you cannot file another chapter 7 bankruptcy for 8 years. However, it will provide immediate relief from all of your credit card debt. Normally, all your credit card debt will be wiped out, but in some situations a credit may argue that it should not be wiped out (such as a recent cash advance). Additionally, if you file a Chapter 13 bankruptcy, you may even be able to keep your car and lower your car payments each month. Doing a debt consolidation or negotiation may be fruitful, but you will have to pay something back. Barely being able to take care of your family is a tough situation to be in. Filing a Chapter 7 will provide you with immediate relief and piece of mind.
Answered on Mar 08th, 2013 at 1:19 PM