Help with old debt and car

[JamesC]

Thanks in advance.

I used to maintain an excellent credit score. Had a beautiful house, family, new car... for many years. Then my life was flipped upside down by a false accusation that landed me in jail, and a ton of wife drama. I was never charged but the damage was done. I lost my career, sold my home and broke even before to bank took it back, started living out of my car and off my credit cards for almost a year.

I currently owe on 3 credit cards and a vehicle. It has been over 3 years since I last made a payment to any of these and since I made any contact. I am around $60k in debt total.

I live in Florida. Will these debts fall off my credit in 7 years total, which I have 4 years remaining?
It will take me close to 10 years to pay this off, is it even worth paying if it will fall off before that time?

Will filing for bankruptcy give me a clean slate?

My car has been in collections for years, I obviously dont have the title. What happens to this when or if I file for bankruptcy? I need the vehicle for work.

I don't know what to do.

[disneysteve]

Welcome to the site.

What is your current income? What is your current monthly spending? How much do you owe on the car?

[JamesC]

Thank you.
I make $4k per month .
$3,500/month in bills in cash, no loans/credit cards. I have a wife and 3 kids.

I owe slightly over $49k on the car. Its probably worth 25k now.

[disneysteve]

Thank you.
I make $4k per month .
$3,500/month in bills in cash, no loans/credit cards. I have a wife and 3 kids.

I owe slightly over $49k on the car. Its probably worth 25k now.

Does your wife work or is your 4K the only income? That's not much for a family of 5 though it's great that your spending is $500 less than your income. What are you doing with that monthly surplus?

What can you do to earn more money? Can you work extra hours at your current job? Can you get a second job? Sell stuff on ebay? Can your wife do anything to earn money? Are any of the kids old enough to work - babysitting, dog walking, whatever.

With 5 people I'm guessing your budget is already pretty lean on 42K income but I'd still look at every item to see if you can trim anywhere. Shop around on your insurance policies to see if you can lower rates. Cut out cable TV. Check for cheaper cell phone plans. All that sort of stuff. Also check if you qualify for any public assistance if you aren't already receiving it.

[Petunia 100]

If you file bankruptcy, yes, you can get out from under that 60k of debt. However, you won't be able to keep the car. If you choose to keep the car, you will also keep the 49k of debt attached to it. You can get a different car, of course, but your options are limited by having recently filed for bankruptcy.

Most bankruptcy attorneys will do a consultation free of charge. I suggest you call one and just see what they tell you.

[disneysteve]

If you file bankruptcy, yes, you can get out from under that 60k of debt. However, you won't be able to keep the car. If you choose to keep the car, you will also keep the 49k of debt attached to it. You can get a different car, of course, but your options are limited by having recently filed for bankruptcy.

If you truly have a $500 surplus each month, I'd be stashing that away to save up to buy a car for cash once you file for BK.

[kork13]

Bankruptcy may be a viable option to get past your debt situation... Be ready for the costs involved, typically at least $1500 in various legal/lawyer fees.

The car needs to go. You don't mention your profession, but at that dollar level, you must have either a luxury sedan or a big, newer truck. Unless you're an independent contractor/business owner, the car is almost assuredly not an actual need -- plenty of executives, realtors, and builders, and oilmen drive simple, adorable used cars like a Camry or Sonata. As Steve suggests, start saving up for a functional, inexpensive used car. $5k should be the goal.

Any opportunity that you & your wife may have to increase your income needs to be pursued aggressively. Whether it's overtime, a second job, or driving Uber in the evenings... $4k/mo just isn't enough for you to get past all of this, especially with a family of 5.

You have a tough road ahead, with alot of hard work & likely accompanied by alot of heartache... But don't give up, it's definitely doable.

[LivingAlmostLarge]

I think BK is a very feasible and possibly only option.

[myrdale]

1) The car has to go. Find yourself something you can buy for <$5k like has been suggested.

2) You may not be bankrupt. You owe $60k across three cards. With it being three years, they may have sold it, which means you may be able to settle. I am assuming $0.10 on the $1. If you can come up with the cash, call them up one at a time and offer to settle in full, ONLY after you have a letter in writing stating as much.

Also keep in mind, there are now tow companies who have ALPR cameras and ride around looking for cars such as yours. Its not outside the ream of possibilities that you pull up to a gas pump and then walk inside to buy a stick of gum only to come back out and find you're being towed. My advice is get this straight before you're left stranded.