Questions about wisdom of filing bankruptcy?

[in_idaho]

What is the name of your state?What is the name of your state? Idaho

I am single, no children, currently have $32,000 in credit card debt, and about $16,000 in cash. I am current on all cards (debt is all on 2 from cash advances) and my credit history is good. Interest will remain low until December. I am unemployed with employer challenging unemployment claim. I am applying for work mostly out of state with software headhunters for jobs that would pay $6000 a month or more, don't know what my chances are of landing one. I am 48 with five years experience.

No other assets of any kind, current monthly total living expenses of about $600. I have $4500 in an IRA.

I don't want to file bk, but chapter 7 may be necessary. I am trying to weigh the consequences versus the need to discharge the debt. I have talked to debt negotiators, I would have to purposely go delinquent before being eligible, and they want 15% of the reduction, plus there is the taxes on the 1099 income, so I don't see where you come out that far ahead.

Any advice would be appreciated.

 

[hanjenden]

Trust me. Stay away from debt negotiators. They will make your problems ten times what they are now.

 

[Ladynred]

First of all, with 16K in CASH if you file for BK the Trustee will take most or all of that, depending on exemptions, to pay your creditors. The IRA would be safe.

Obviously you have that 16K to live on for a while - which is more than most people can do. Once that runs out, then BK would probably be more of a reality.
Until then, as long as you're current, creditors won't even put you on a hardship plan. The irony of that is that you must be 3-4 months past due before they'll consider a hardship program.

Debt negotiators are definitely BAD news and will likely drive you to bankruptcy a lot sooner. People get sued because you stop paying creditors while you 'save' money for them to negotiate settlments - and you're paying for them to totally wreck your credit !!