Should I file for bankruptcy with a $100,000 credit card balance?

Friday mid-afternoon , March 20, 2009.

This is a question that I’ve transcribed from CreditCards.com, to give an honest answer to Ruth.

Before you begin to think I’m too paranoid, I just want you to ask yourself: if all these counseling services are non-profit, how do they make a living? The dirty truth is that banks are behind them. Now you know, caveat emptor.

Here’s Ruth’s question:

Over the past 10 years, my husband and I (mainly me) have run up credit card debt of about $100,000.00. We have 10 grandchildren, and my son has been in and out of prison. We have been taking care of them, buying all their clothes, paying for rent, day care and bills. It has come to the point I have to pay bills with credit cards because I don’t have enough cash. I juggle and rob Paul to pay Peter. I’m turning into a nervous wreck.

I finally told my husband how much debt we have, and he wants us to file for bankruptcy. We spoke to a bankruptcy lawyer. He told us to buy new two new autos because he said we need collateral debt. He also said to make payments on cards that have been charged on in the last two months and just stop paying on the others.

I’m not sure what to do. Praying hasn’t helped. I thought of some kind of debt cancellation, but my husband and the lawyer think not. Any ideas? —Ruth

lifeguard

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lifeguard

Ruth,

The whole purpose behind a bankruptcy is to give people like you a genuine chance to start all over again.

You’re definitely not going to make it by holding on to your iron-ball debt.

In regards to the moral issue of buying two new cars, I’ll leave it up to you and your conscience, but you’d better have something reliable to take you or your husband to work, if not, you’ll be shooting yourself on the foot.

It’s more of a transportation rather than a “collateral debt” issue.

Having said all of the above, you do have a point. First, consider calling your credit card company, tell them you will be filing for bankruptcy, and that you’re willing to listen to a settlement offer.

You’ve got nothing to lose. If you don’t like the offer, you walk to the court.

By   lifeguard  
Mar 20, late afternoon |  Report?