Sorry to hear about those financial hits,Customer <br /> <br />BKs for "only" $20K of debt are not really that uncommon. <br /> <br />The first question is whether you could still live within your current income if the credit card bills all go away. If yes, then BK is probably for you. <br /> <br />Next, is your income together, over the last six months, less than an annual average of $63,240? If over, you would have to overcome a "presumption of abuse
" to file a Chapter 7
BK, and that could result in several hundred dollars of extra attorney's fees to file in Ch 7. <br /> <br />If your income is above that figure, the most readily available option is a Chapter 13
"re-organization". You wind up in a 5-year repayment plan
that MUST pay your creditors more than they would have received in a Chapter 7, and you MUST have regular income AND make monthly payments to the BK Trustee
. You pay your post-Petition
monthly expenses as usual. It's common enough for the debtor to continue making house payments directly, then have everything else debt-related paid through the Trustee (only ONE payment makes life easier). <br /> <br />There are some additional rules regarding dischargeability of IRS debts. IF the returns were filed on time, and IF the taxes
were assessed more than three years ago and IF there are no tax liens on your real estate or personal property, THEN those tax debts are most likely dischargeable. I run into too many people who are filing 2002 taxes this year and are asking if bankruptcy would help them--it can't for those tax debts. <br /> <br />Hope this helps. <br /> <br />Thank you. <br /> <br />BAB. <br /> <br />PS--Beware of debt consolidation scams. Some have impressive websites and even appear to be run by attorneys. Some promise things that they cannot deliver. Really watch out for any scheme that involves you "assigning" your debt to the so-called "helping" company.