You always knew that your credit cards were a great way to help in times of crisis, but, over time, they became a crisis of their own. They grew in number and, because you did pay on time, you received high credit lines. You spent on them little by little, but now, they're almost all maxed out and you can barely pay the minimums.
You have no other real debts to your name, but the credit-card debts aren't reducing even when you make payments each month. The interest rates are just too high. Now, with a reduction in your hours at work, you think you'll start missing payments. You don't know what to do.
Bankruptcy could be a good option for you
Bankruptcy is one option that might work well in your situation, but there are other options as well. You may want to look into consolidating your debts onto one card or getting a balance transfer onto a card with no interest for 12 months, so you can pay down your debt interest-free. If those aren't options for you, then bankruptcy might actually be your best choice.
Since your debts are unsecured, the good news is that you'll be able to discharge them in bankruptcy. You'll need to pay for the bankruptcy first, and then you'll work with someone who will help you liquidate your assets (if you choose Chapter 7 bankruptcy). You won't lose everything, but you will need to pare down. Your attorney will help you find exemptions for your assets, so you can keep as much as possible.
Should you consider bankruptcy? Won't you lose everything?
You should consider bankruptcy without fear. Bankruptcies aren't there to cause you to start over from scratch. They have exemptions that allow you to keep your only vehicle or primary home. Certain clothing items and jewelry, for example, may be exempt as well.
There is a myth that bankruptcy results in a loss of all your assets, but that holds many people back when it shouldn't. The truth is that most people keep what they need and get the financial relief they're after. There is no reason to struggle with financial concerns every day when there is an out. Bankruptcy will affect your credit and ability to purchase a home in the near future, but with the money you'll save and a better budget in place, you'll come back stronger than before.