It might not be a bad idea to talk to the credit card company first. Bankruptcy would be a huge blow to your credit, and it would be better for the company to give you a break on payments or principal than it would if you discharged the debt.
It is impossible to determine if you are eligible to file chapter 7 bankruptcy without knowing how much you earn, which you should not disclose in this forum. To qualify for a Chapter 7 bankruptcy filing, the applicant's average monthly income for the six months preceding the bankruptcy filing must be less than the Median Income in his or her state. If your average monthly income is equal to or less than the median income in your state, you can file a Chapter 7 bankruptcy petition. If your average monthly income is more than the median income in the state, you must pass "the means test" in order to file a Chapter 7 bankruptcy petition, or file a Chapter 13 Bankruptcy petition instead.
For more information on bankruptcy see legalcorner.net's answers to FAQs on Chapter 7 at http://www.legalcorner.net/lbsmain.asp?name=chapter7
Disclaimer. Ms. Marsh is an attorney licensed to practice in California. The information posted above is for general information, does not constitute professional legal advice, and does not create an attorney client relationship. Ms. Marsh strongly advises the questioner to consult with an attorney to thoroughly review their particular circumstances and for advice tailored to their specific circumstances.
If you have a mountain of debt that, realistically speaking, you won’t ever be able to pay off, you should consider a bankruptcy. This a question you need to ask yourself.
And ask yourself what declaring bankruptcy will do to your credit. The answer to this question may not be as obvious as it seems. Recent studies have shown that if your credit is already bad because you owe too much debt a bankruptcy will probably improve your credit score.
If you still think you want to explore bankruptcy then determine, what I call the two threshold issues:
1) Are you going to risk losing property if you declare Chapter 7 bankruptcy?
2) Do you make so much money that you will flunk the “means test” which disqualifies you from a chapter 7 bankruptcy?
It sounds like you don’t have too much property so it seems that you might be at low risk from losing property. As far as the means test is concerned you can take it for free on sites like this one: http://www.legalconsumer.com/bankruptcy/means-test/
You can call and talk to me about all this. I offer a free initial absolutely no obligation consultation.
Depending on your income and assets, chapter 7 may be the best option for you. My firm specializes in both bankruptcy and non-bankruptcy alternatives and I can assist you in making the best decision for you and your family. From the general facts you state, you would likely qualify for chapter 7 which would eliminate your unsecured debt and allow you to protect all of your personal property including the cars.
Mr. Larkin is licensed to practice law in CA and is located in San Diego. His response here does not constitute legal advice and does not create an attorney/ client relationship. The response is in the form of legal education and is intended to provide general information about the matter in question. Many times the questioner may leave out details which would make the reply unsuitable. Mr. Larkin strongly advises the questioner to confer with an attorney in their own state to acquire more information about the specifics of their case.