I am considering bankruptcy. I am 28 years old married with one child and one on the way. My wife and I have $34,000 in credit card debt and will soon only have one income when she has the baby and has to stay home for child care. We own a townhouse with no equity (refinanced twice in last 4 years). Any suggestions? --Mike, IL
Mike – Bankruptcy should be an option of last resort. It destroys your credit for years and is a very difficult, expensive (over $1,000 to apply) process to file and in the end, you may be denied. Bankruptcy has changed—it’s more difficult to file Chapter 7 bankruptcy, which removes nearly all your debts owed (not student loans, child support, alimony and tax liens). Most people now end up in Chapter 13, which is a debt repayment program. The court sets up a schedule for you to repay your debts. Before you head into bankruptcy court, make sure you’ve exhausted all your options as well as talking with a non-profit credit counselor who can help you make the decision, or not. You can find one near you at NFCC.org. Good luck.