Having second thoughts about filing bankruptcy *Please Help*

[bunny1013]

What is the name of your state? PA

My husband and I had a free consultation with a bankruptcy lawyer and after meeting with him he is recommending Chapter 7 for us. At the time it sounded like a real relief but after a week or so later I am having second thoughts. We haven't paid any money, or filed or anything yet. I keep thinking there might be hope to avoid bankruptcy on our record and that we could pull through this without doing so, I am very confused on what to do.

We built and own our own home. Hubby is in construction and his work is seasonal. I care for my mother and have a 3 year old and am not currently working. Hubby has been on unemployment but now got a new job that starts at almost $40 per hour, however we know it will be seasonal, maybe 9 months out of the year at most, it is just the nature of the line of work he is in. I quit my job a few years ago to have our daughter, care for her and I also care for my ill mother on a daily basis. I do plan to go back to work someday but am not able to right now, and can an employer not hire me when I am ready to go back to work if they see a bankruptcy, some pull credit reports.

We have a home equity loan and line of credit against the home. The line of credit is maxed. We have $60,000 in credit card debt. When his work was slow we found ourselves using the cards to live on, now they are all maxed and interest rates are sky high. Most we have done everything to stay current on, from small balances of $300 to balances of $20,000. The calls are non stop of course, and at the time the Chapter 7 sounded like relief of it all but something inside tells me we will regret it, or maybe that is part of the process, don't know. I keep thinking it is better to work with the creditors than to file Chapter 7.

The creditors are horrible really. I was trying to make hardship arrangements with all of them but what is worse, being behind on your credit or starting over with a lower debt to income ratio even though you have a bankruptcy on your record. They are all maxed and the interest rates are over 30 percent on some, is there life after bankruptcy?

If we don't file, then we will put the increase in pay towards our bills and will be paycheck to paycheck dreading the winters on unemployment and falling behind again. If we do file, all that debt will be gone but then I feel like if we ever try to refinance or anything again or if anything comes up with our daughter or home we are stuck without credit and creditors will look at us like failures on our credit report. In a way I was looking at the Chapter 7 as a relief and a fresh start, now I have my doubts.

I wonder what is worse also, having over a dozen accounts on our credit report that some are current, but some are 30 days, and a few 60 days past due. Is it better to let them charge off than a bankruptcy? Does it look better on our credit to have accounts that were behind and that we caught up later or just go ahead and wipe the slate clean?

Thanks for any advice, I am really torn.

bunny

[CharlotteInvest]

i can't really help but i would like to see how others respond, any way, have you talked to any credit counselors? maybe call a few different creditors and run a "what if". interview, interview, interview the professionals that deal with making those type of decisions based on credit history. they are really the only ones i can see that would know.

your attorney could be giving good advice but remember they are trying to push their service.

hope this helps.

good luck bunny!

[bigun]

There is plenty of financial life post bk.
You can't pay your bills, you're underemployed and choking on debt. I think your lawyer is giving good advice.
Try an active bk forum like [url]www.bankruptcyforum.com[/url]
There are plenty of success stories. The key to the whole thing is, you have to fix what created the problem. If you can't do that. bk is wasted.

[bunny1013]

Thank you again bigun I truly appreciate you taking the time to read my post and respond. If you ever IM members, let me know You are really an asset to this site. Thanks a lot for not making me feel like a failure and that there is hope. Bunny

[bunny1013]

Charlotte thank you for your response also, much appreciated. Yes, we had a three hour phone meeting going over everything with a debt management/credit counseling service. It really opened our eyes to a lot of things too. At the end they told us they would not be able to help, they were not going to set us up to fail. Our debt to income ratio is too high and they said legal help would most likely be our next step, that is when we called and met with a bankruptcy attorney for advice. I can't help this yucky dirty and failure feeling but I know the bk is probably our answer. Thanks again, Bunny

[Ladynred]

You're not a failure, despite what you might be feeling. You are also FAR, FAR from alone, you probably have friends and neighbors who have filed, you just don't know it.

As badly as you feel know, being hounded by creditors for the next 20 years for all those debts is worse. Once your credit is damaged you are stuck with the negatives for 7-1/2 years, and if anyone sues you and gets a judgment, you could be looking at 20 year or more of harrassment - and the judgments can stay on your reports for the life of the unpaid judgment.

There is PLENTY of life after bankruptcy. The biggest impact to your credit is the 1st 2 years, after that hurdle, the impact of the bankruptcy lessens with time and diligence in cleaning up your reports, rebuilding your credit AND establishing new habits that will keep you OUT of that debt trap for good. No bankruptcy is going to help you for good if you don't change the way you handle money, and learn to live within your means. Once you're debt free, you can use your hubby's increased income to put money into SAVINGS to get you thru the unemployment and the emergencies. Forget the mindset that the only way out of an emergency is a credit card or a loan.

Once you're out from under the crushing debt load, the financial stress is gone and you can focus on your family -- not your money issues. Most people who have filed admit that it's a huge relief to finally be free and out from under the constant worry - like you're doing now.

Follow through with the bankruptcy, retrain your money habits, and you'll be able to move forward instead of being mired in the quicksand of debt.