Posted on June 9, 2009 at 12:18 pm I have 50k on 5 credit cards in debt. I make 45k a year + I pay 30% salary for child support. Plus I have unpaid (5k) car (worth 10k). I don't  have anything else valuable. What should I do? File bankruptcy 13 or 7? Negotiate with collectors?  

Posted on June 9, 2009 at 1:03 pm Ozlobin, I would need to know a few more things to give you the appropriate advice in regards to your situation. First, what are the interest rates on your cards? Are you behind on any of your monthly payments? And finally, are you only making the minimum payments right now to each of your creditors? Let me know when you can I would love to help point you in the right direction. If you are not comfortable sharing your situation through the forum, feel free to fill out a form on DestroyDebt.Com for a free consultation!

Posted on June 9, 2009 at 2:23 pm Most of the cards now on 30% and soon all of them going to be 30%. I'm not late on anything just yet but I used all my resourses trying to lower it so next month I can't pay most of them.

Posted on June 9, 2009 at 4:26 pm Since you will not be able to continue making monthly payments, your interest rates on average are 30% and you owe roughly $50 K it may be a good idea to consider a reputable debt settlement company to assist you. I say this because of the fact that credit counseling is not going to do you much good if you cannot continue to make monthly payments. Those programs last 5 years and you must remain current on all of your accounts throughout that period of time. Also, even if some of your interest rates are lowered it is still fairly unrealistic that you can pay off $50 K in that amount of time. Settlement, on the otherhand, is a good option for people who owe a lot and are either behind or about to fall behind. I say that because the accounts must be delinquent in order to settle them. But, in the meantime, you can make a lower, affordable monthly payment to start building funds to settle your debts. Obviously another bright side is the potential of saving a lot of money. If you can make smaller, consistent monthly payments then I think you can be successful getting through one of these programs. Bankruptcy should be avoided at all costs so I won't discuss that quite yet unless you have questions. Are you familiar with the settlement process itself? Feel free to ask any questions that come to mind, I am more than happy to address them with the best of my ability.

Posted on June 9, 2009 at 8:07 pm thank you for these responses, this is just what I need to hear. my question now, is, if i decide to settle my debts, how is that going to appear on my credit report, as opposed to filing for a bankrputcy? Thank you in advance for your answers.

Posted on June 10, 2009 at 3:15 am Hi Polly,If you decide to settle your debt, it will appear on your credit report as "settled in full." While it may remain on your report for seven years, it helps much more than a bankruptcy, where the negative notation will be there as much as ten years.

Posted on June 10, 2009 at 7:50 am Caffeinatrix- Settled accounts may appear as "settled in full." They could also appear as "settled", "account settled", or "settled for less than the full amount." Most importantly, a settlement stays on your credit report for 7 years from the date the account was settled. If you file Chapter 13 bankruptcy, that will remain on your credit report for 7 years also. If you file for Chapter 7 bankruptcy, that will remain on your credit report for 10 years. Both Chapter 7 and Chapter 13 bankruptcy stay on your public records for 20 years. There is nothing to really ponder here- if you want to know which is worse from a credit report standpoint, it is surely bankruptcy. Not only does this show on your public records, stay on your credit report longer (if you file Chapter 7), but from a perception standpoint (for future lenders) it is a lot better to have a settled account than it is to have a bankruptcy filing.