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“Hi I’m John from Calgary. After my business was forced to close down I was left with huge unsecured loans and visa payments. I did not want to file bankruptcy and at the same time wanted…
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bankruptcy consolidation question by robere3496: CREDIT CARD bankruptcy?
I am a stay home dad and my wife works full time. I have about $ 14000 in CC debt and we can no longer make payments it is just killing me (us).
I am seriously thinking of filing for bankruptcy. I have excellent credit and have never missed a payment. If I file for chapter 11, or just stop paying on my cc’s , will it affect my wife’s credit? I really need some advice…

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Answer by CatDad
As long as your accounts are not joint/co-signed, then your wife’s credit won’t be affected. Chapter 7 (not Chapter 11), is the version of bankruptcy that discharges credit card debt. Before you file, you might consider entering into a Debt Management Plan through a non profit like CCCS Consumer Credit Counseling Services …They can negotiate interest rates down to the 10% level and usually your payments down to 2% of your total balance….which in your case might be around $ 280

Contact your local Red Cross for a referral to the local (CCCS). They can negotiate reduced interest and payments. They will require you to stop using all credit and to cut up your cards. Your credit report will be updated to “enrolled in debt management.” This does not damage your credit, but it may make it difficult to obtain new credit while you are enrolled in their program….so don’t use this service if you anticipate applying for a new apartment, car loan or mortgage anytime soon, as you would might be denied while you’re enrolled in the CCCS debt management program…

I advise against using CCCS if you are drastically past due or have already complete defaulted on most of your credit cards….If this is the case then you are better off negotiating settlements directly with your creditors. You may be able to settle in the 25% – 50% range if your cards are already defaulted. If you settle, get all terms in writing. They will probably want a large lump sum rather than small payments over several years. CCCS will not negotiate settlements because they are funded by the credit card industry.

CCCS counselors will often tell people to not file for bankruptcy when they really should. If your debt is overwhelming relative to your income/assets and the reduced payments negotiated by CCCS simply will not work, then you should think about filing for Chapter 7 bankruptcy. I personally think that $ 15K is the minimum that someone should consider filing for Chapter 7….but if this is a financial emergency then do what you need to do to support you and your family. Don’t let anyone guilt-trip you. You can only file Chapter 7 once every 8 years….not every time you get into financial trouble.
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Stay away from any “debt consolidation” company that promises to cut your debt in half through debt settlement….This is a risky tactic of deliberately ceasing all payments to creditors and forcing your accounts into default to attempt settlements. You can never predict how your creditors will respond to the deliberate defaulting of your accounts…they might settle at 50%…or they might serve you a summons, take you to court…and if they win, you could be looking at wage garnishment. Many people who sign up with “debt consolidation” firms incorrectly assume that they have the power to force your creditors to accept settlements…they don’t. Your creditors have the right to refuse settlements and take you to court.

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