Debt Relief Program vs. Bankruptcy

I am contemplating the Debt Reduction Program vs. filing for Bankruptcy. Here is my situation.

Consumer debt (poor use of credit and WWWWWWAAAAYYYYY overextended)

Total Debt: ~$52,000 (credit cards, gas cards and some medical bills) We have no house payment and we lease a vehicle.

Assets: About $60,00- $14,000 of which is in a teacher's retirement fund.

Monthly Income: about $6,300-6,500 (depending on monthly bonus check)

Monthly Bills (including minimum credit payemts, rent, childcare, utilities, and other basic living expenses, BUT NOT INCLUDING non-living expenses) $6,500

This takes every penny and then some. Currently, we are in a monthly deficit and losing our cash---> FAST. One debt consilidation company made a proposal of spending $6,300 ($1,155 towards debts) and leaving us with a surplus of around $300. However, I did not include the $275 that goes to my monthly teacher retirement account.

So, basically we have $25 left over at the end of the month to have towards emergencies or maybe do some fun family activities. Heck, maybe even save a little! The more I look at the dollar signs, the more I am leaning towards bankruptcy. Anyway, I would just like an opinion on what I (we)should do---> Bankruptcy or Debt Consolidation Program?

[racer72]

With the debt consolidation program, each creditor is going to list you as a slow pay on your credit report. 10 creditors = 10 black marks. And they leave you with nothing for the extras. Plus if you decide to quit the program, all the interest and late payment penalties that have been put on hold become due right now. With bankruptcy, most of the debts are gone. You have one black mark on your credit report. And it the future, it may be easier to get credit again because the creditors know you have to pay. Your assets are well under the limit. The only problem is your vehicle lease. You are not allowed car payments and your lease agreement most likely calls for an automatic lease revocation if you file for bankruptcy. You are allowed only $1000 per vehicle per licensed driver. If you do decide on bankruptcy, you will have to return the car then claim penalties on the bankruptcy.