The Highway Forums General Discussion Open Forum bankruptcy

I have an uncomfortable question to ask <img src="/forum/images/graemlins/ugh.gif" alt="" /> but I need to get some advice. My financial situation is fairly bleak (sp?) and I am struggling with the concept of bankruptcy. Not for the 10 year negative mark on my credit record but rather the moral implications of it.

I have always believed that it was wrong to go into bankruptcy and my reasoning was that it was wrong to break the promise to pay made when borrowing money either from a bank or on credit card (i consider that a loan also).
Now I am faced with a situation that I cannot pay my normal utilities and have the Credit Card people coming after me. I can't work anymore hours, I am already working about 50-60 hours a week (2-3 days a week I am working 7am to 10 pm) and still start the month with a negative bank balance (usually $200 - $500)

I don't want to do the bankruptcy thing but it doesn't seem I have much choice. I know I've made bad career and financial decisions and I'm recieving my just due but I'm trying to dig myself our without my family suffering more than they have already.

Any ideas? Is bankruptcy a moral issue or is this just a fundamentalist leftover in my theology?

five sola

Five Solas,

I, like you, have serious moral problems with filing bankruptcy. I all too well understand that bad management and financial decisions have brought you to this point, but have to wonder if you have gotten professional accounting advice? Sometimes you are able to talk to your creditors and work out a repayment shedule that you can manage. Most creditors do NOT want you to file bakruptcy, and are willing to wait for you to pay over time, but they want to see a plan inplace and might require the imput and help of a credit councillor. Do you have anyone, friend family or church member, in the credit business that can help or refer you to a agency that can help you?

I certainly wish there was more I could do for you, but will lift this up in prayer for your help. Let us know, how you make out and if there is anything we can do.

In His Hands,

Ruth

Hi--

You may want to check out Dave Ramsey--he is a financial counselor who works from a very strongly Christian perspective. Your words on the moral issues of bankruptcy sound as if they were drawn straight from Dave. He often counsels people regarding ways of dealing with the issue of overwhelming debt without having to go into bankruptcy. He has a web site: http://www.daveramsey.com/

To what extent this will help in your situation, I cannot tell, but I have found him to be a remarkably good guide, filled with all sorts of common sense. May God be with you as you struggle with this problem.

Sam

Dave Ramsey does have some good advise, and questionable advise.

First seek out a reputable credit counselor. They will act as an advocate with your creditors to get you payments reduced. They will also help you to see what you can cut from your expenses.

Second use Dave Ramsey's credit snowball. Make the minimum payments on your bills except for the smallest. On the smallest pay the minimum plus all you can add to it. Then when that is paid off add what you paid on it to the next smallest bill. (Some would recommend paying off the highest interest rate first. Dave's point is the boost that comes from seeing progress in getting the bills paid off!)

I do question Dave's opinion concerning credit and debit cards.

1) Credit cards have a federal law that limits your liability if it is stolen. This does not exist on debit cards, though the bank may have a policy that will help.

2) A compromised debit card has direct access to your bank accounts. A credit card has a limit.

3) I've learned from my son's painful experience that there is a lag between a purchase and the money coming out of your account with a debit card. So it is possible to double spend the same money!

My recommendation, after getting your house in order and if you really need plastic, is to have only one credit card with a low credit limit. If you see a big item coming up that will over spend the credit limit (say tickets and hotel for a trip), estimate the amount needed and pay it first to the credit card.

Have you sought the aid of your local church?

Just to offer a thought from the other side, it has been my understanding that bankruptcy laws are derived from the OT's teaching on slavery, as applied to fellow Israelites

Although I agree that making good on your obligations is best, IMO bankruptcy isn't quite as morally reprehensible as some make it to be.

Despite the pressure you face it does not sound like you are owing large and permanently unpayable amounts of money. I would echo the advice of others and seek out both a debt counsellor and one of the officers at your church. If your church has a debt counsellor, even better!

Maybe one of the church deacons will be willing to assist your financial position to help alleviate the situation. They may also be able to give wise and gentle advice on your expenditures to assist you in ensuring incomings exceed outgoings.

Please do talk to your church. If you aren't linked to a local Reformed church post your location details on the Church Locator Forum and we'll see what we can do to link you up with one.

Yours in Christ,

James.

There is the alternative of going with bankrup. to stop the pressure and continuing to pay off the debts, thus keeping your word.

Don't know your state laws, but I wouldn't sign anything to that effect, just tell your creditors that is your plan. Pay them as fast as you can while backing away from the payment load you are carrying now. Don't forget to add a little additional interst for your extra time :-)

Not the best remedy but a thought.

There is also the possibility of refinancing to a lower payment??? imagine you have thought of that by now.

Will be praying for wisdom! Sorry if that belongs in the prayer forum :-)

Thank you's to everyone's ideas. Some I had considered and others I had not. I have made arrangements with one CC to have a set amount of money automatically drafted from my bank account, in return they will postpone all fees and interest rates for the year of this contract. The other CC didn't go for this but has at least quit calling 20+ times a day with the threatening messages (we don't answer our phone anymore). The amounts I will have to pay will put a huge stress on my monthly utilities (I will have to alternate which I pay for) but after 6 months of deliquencies on payments I don't have much choice. I will post info if anything improves (hopefully soon).

I appreciate the prayers, as they will be the only thing that gets me through this. I really beg for prayers for my wife who is really suffering under the stress of all this.

Thanks once again to everyone.