What to Do: Debt Settlement or Bankruptcy
My question involves bankruptcy in the state of: FLORIDA
I have $4K on one credit card and $17K on another. On the $17K one, I had a limit of $30K but the card company recently reduced it to $18K, so now it looks like I am almost maxed out. I pay both cards on time every month and pay more than the minimum. These cards are in my name and my husband does not know I have balances on them. I guess I thought I could get them paid off and its just gotten worse. I use them as business cards for my eBay business and I am a Realtor also so some of my real estate expenses have been going on that card.
We also have a joint card with a balance of $13K that he is aware of. I have decided that since I can't sleep at night and have to take Xanax like candy to live day to day due to the anxiety I now have, I have to tell him. He has a job making about $37K a year plus bonuses for a total closer to $50K a year - he brings home maybe $2500-$3500 a month depending on bonuses. As I said, I am a Realtor, and well, you know about how good the real estate market is. I do it full-time, I stupidly quit my old full-time job back in April because I had a couple good sales in a row and thought I could make a go of it if I really commited full time. I make about $1000 a month outside of real estate from eBay and other small commissions. Now I feel trapped. I have to tell him that I have lied because I didn't want to upset him, which will just upset him more and I'm fearful he'll ask for a divorce and freak out. I'm so scared and I love him to death and would never do anything to hurt him intentionally, I kept this from him because I thought I could take care of it myself but apparently I can't. I keep living on the hope that I'll sell a big house and make a huge commission and be able to pay a large chunk down. It could happen but when is the question.
We pay all our bills on time including a mortgage on a house that is now not worth what we owe on it. We both have great credit (or mine probably is not AS great now that I am almost max'd on that one card). I don't want to ruin his credit for my mistakes. We pay our bills but just barely and gas and groceries has been going on cards sometimes. I don't know what to do. If I get a full-time job and quit real estate I'll be destroying my dream. If I go part-time in real estate I won't be doing as good a job for my existing clients. I'd like to try to get another p/t job but I don't know where in this economy. Thought about bartending to make some quick cash but I've never even done it before so that would be tough.
Am I best to file bankruptcy - and if so, what's the difference betw' Chap. 7 and 13? And if I do, will it affect my husband since we are both on our mortgage and on the one card? I thought about debt settlement but it seems that can make things worse. Or should I just suck it up and sell everything valuable I own and try to pay them down on my own? :(
Thanks for listening.
Re: What to Do: Debt Settlement or Bankruptcy
For an understanding of Chapter 13 bankruptcy versus Chapter 7, read this article.
If you wish to discharge joint debts, you both will need to declare bankruptcy. If you wish to get out from under debts that are only in your name, you can declare bankruptcy yourself - but you should expect that your husband is going to find out.
If you can actually get the credit cards paid down or, better, paid off without either trying debt settlement (which will hurt your credit almost as badly as bankruptcy and may not even succeed) or bankruptcy, that's normally the best approach.