My choice: Bankruptcy or ?
I have 30K in unsecured debt, I have talked to all of my credit card companies and 2 different non profit debt management companies and the only "relief" they have offered is to be debt free in 5 years, however I am unable to make the minimum payments. Is Bankruptcy my only option? I am current on all my payments right now, but that is not going to be the case in September.
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First, credit card companies will never really offer you any real long term relief...esp. for debts this big...the best they might offer is to close your accounts and reduce your interest rate to 10%.
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If you have exhausted all options, including slashing expenses to the bone and making extra money, then there are really only two options: the first is a debt management plan through NFCC - http://www.nfcc.org/
The other option is Chapter 7 bankruptcy. You have to qualify to file for Chapter 7, the version of bankruptcy that actually discharges the debt. More info at: http://www.nolo.com/legal-encyclopedia/chapter-7-b...
- There are some people (like Dave Ramsey) who like to exaggerate the negative effects of bankruptcy. Filing for Chapter 7 will not destroy your credit for life...or even 10 years. You can have good credit again in as little as 3 years out of filing. If you're in a position to where you can just make min. payments on $30,000...then a huge chunk of your payment will be just towards interest to where you could pay forever and the amount you owe will never go down. Try to avoid filing for bankruptcy if you can, but if you feel that it's needed, then do what you have to do. Don't let anyone trash you for making this decision.
Stay fair away from any debt settlement/consolidation companies that promise to cut your debt and payments in half. These firms "work" by having you to deliberately default on your credit cards....a risky process that usually gets a person sued...leading to judgements and wage garnishment.
Its impossible to say whether or not bankruptcy is your only option based on 5 lines about your debts.
Most people can swing about a $1000 per month change in their financial situation by cutting expenses and taking a 2nd job. If you're already keeping expenses down or you're already working extra (overtime or 2nd job), then maybe you can't.
I always tell people bankruptcy is a LAST resort. You should at least try to find an extra job and cut expenses to the bare minimum and see if you're able to make financial progress.
the five year plan usually has a reduced principle amount involved, and so if you cannot pay save 2K for bankruptcy