|
During this unemployment period, I was unable to pay any of my
credit card bills and have since been turned over to
collections and in some cases lawyers. My new income isn’t
enough to begin paying these back and given the current state
of the economy and our regime targeting war strategy, the
chances of landing a decent paying job in my area of expertise
seems nearly zero. Based upon this, is bankruptcy my best
option? I’ve looked at the penalties levied upon persons with
bad credit and it seems once you hit 60 days past due, you are
better off filing for bankruptcy. I’m at nearly 400 days past
due on 5-cards for a total of just under $12,000. That use to
be a 1-month paycheck. Now it is almost my year’s salary.
With bankruptcy, once it is discharged you can begin
rebuilding. Without it, it appears I’m screwed for at least 5
years. My only concern about bankruptcy is I will lose my
car. I’m 4-payments away from paying it off and there is no
way I can replace it. It has low miles and I’ve taken
extremely good care of it. My objective was to pay it off and
begin applying the payment amounts toward a down payment on a
home. I took your suggestion and read How to Get Credit
After Bankruptcy, what I need to know now is if my anger
at the situation is clouding my judgment or if bankruptcy is
indeed my best option. I just want this over with so I can
begin rebuilding all that I’ve lost and move on with my life.
Your Q&A’s also address “What are you doing to prevent this
from happening again?” When the economy picks up again I am
sure I will be able to again find employment at my regular
salary and in a position that utilizes my education and
training or plan B, begin profiting from my own business. As
a future plan, I’ve started a company on the side utilizing my
expertise to help insure this doesn’t happen again and my
first book is about to be published. These are all long-term
strategies. Unfortunately it is the short-term that is
killing me.
Please let me know if I’m thinking clearly and if bankruptcy
is the best option. How badly will this hurt my ability to
live from this point forward? What about my ability to land
another executive position with bad credit? Normally I don’t
handle the money but I do administer and create budgets. Even
the little $8 an hour no-skill jobs have been running credit
checks and doing personality profiles now, which shocked me.
I’m sunk the minute they run one. How do I clean up this
mess? Need some direction.
Thank you.
Sincerely,
Humble Pie MBA, (F) 36
Single, never married
Seattle, WA
Dear Miss Pie,
You’re right about the
rules changing, but I don’t know who’s responsible. One
comment in your profile really stuck out: “When the economy
picks up again I am sure I will be able to again find
employment at my regular salary…”
That’s a healthy
attitude, but I’m concerned it may be a bit unrealistic at the
moment. A dozen or so years ago, our economy went through a
similar downturn, and middle management was practically
eliminated from the corporate echelons. With comfortable
lifestyles to support, many in this well educated and
experienced, but now unemployed group, set out on their own.
The rise of an entirely new industry based in technology
resulted. That’s why your Plan B excites me!
Why does the imminent
publication of your book and starting a business have to be a
long-term strategy? When you say your “first book is about to
be published,” does that mean an advance? Royalties any time
soon? A resume credit that would help in your job search?
And what about the “company on the side” you’ve started? Does
it show any promise for quick profitability? What do you need
to really get it off the ground?
Remember the old adage:
It’s always darkest before the dawn. It sounds to me
like it’s a moonless night at your place, with the potential
of a gorgeous sunrise bursting out real soon. Yes, you’re
still thinking clearly, but you’re going to sabotage yourself
if the stress and depression that’s creeping in ever gets a
hold on you.
The short answer to your
question is yes. Bankruptcy may be your best option. In your
particular case, it may make sense, though it should still be
considered a last resort. If you haven’t talked with a
consumer credit counselor (http://www.cccsintl.org/),
making an appointment should be your first step.
While your letter was
quite candid, there are a myriad of unanswered questions you
need to look at before making a decision. First, you say you
are past due on 5 cards for $12,000. Is that the total
indebtedness, or the amount of payments to bring the cards
current? What about assets? You have a car, but do you have
anything else -- a home (doesn’t sound like
it)…IRA…401(k)…etc.? If you own a house and have a 401(k),
you may be able to protect your equity, even in bankruptcy.
In any case, I would prepare a statement of assets and
liabilities, talk with consumer credit counseling, and if you
decide on bankruptcy, hire a bankruptcy attorney to help you.
Now let’s deal with
what
you have going for you!
There are good things and not so good things. You feel
confident that you’ll be able to eventually find employment at
your “regular salary”. Frankly, I’m not so sure. Our economy
is in a state of flux, and I sure don’t see any guarantees
that we’re going back to where we were. I’d put your MBA,
Miss Pie, to use. With your book and the ‘side business’, it
looks as if you already may have done so. You have the
credentials to be your own boss. Is the courage and passion
there too? If so, it won’t matter what your credit check
says!
|
