When is bankruptcy the best choice?

[Julie in Tucson]

What is the name of your state? AZ

Hello. Recently I became aware that my parents were having difficulty paying their bills. I knew they were trying to refinance the house, and assumed that because I had not heard anything that all was well. Unfortunatley my Dad finally admited that they were in trouble and that he did not think he could juggle the bills any more. I asked him if he would be willing to get his bills together and let me look at them. Well, to make a long story short, I am looking at trying to help them get out of $85,000 in revolving credit lines and cards, and their mortgage which they are unable to refinance as they are upside down to the tune of $20,000 ($168,000 total). I had intended to give them an extra 200.00 a month to help and sit down to work out a budget for paying the cards off, but that is not going to cut it as they are negative each month by almost $2000.00. He has been using cash advances to pay the bills, but is running out of room on the cards and getting nowhere paying them off. I cannot see any feasable option other than Bankruptcy at this point. He will fight me on this as he as always prided himself on being ontime with payments, but I do not think he has a choice. Credit counseling is a possibility, but I am not sure that will be enough. Any thoughts (other than the obvious: "how in the world do you get that far in debt?!) on what my best course of action might be would be great. He has no assets, no savings, I am not sure he even has a 401K at this point as he tapped it when he lost his 15yr job and used it to pay bills until he got another job. What a mess. Thanks for the help.
Julie

[Who's Liable?]

Bk is an option when your debt exceeds your income... If he's looking at living on 60K/year, and his debts are 85K, than BK is an option as there is no way he would pay off his debts.

[bigun]

And, not to mention he has negative equity in his house.
I'd not lend 'em any money on am ongoing basis but instead, offer to pay for the bk attorney.
I'd suggest he take the cc card payments out of the equiation for a moment and see if they can meet basic living expenses from their monthly salary. If they can't do that, they got a problem bk can't solve. Even if you file bk, you still need to support yourself post bk.
Filing is a personal decicion. Me, I look at it without any emotion. It's just a business decision.

[Julie in Tucson]

Thanks Bigun, I figured this was how it was going to play out. I think without the credit card debt they will be fine, though at this point I almost wish they would get rid of the house too and move into something smaller and less expensive, but without the CC debt, they should be fine.