@Account Closed
Background: I am a bankruptcy attorney.
Well, you asked for advice and after reading through all of the responses I think you got what you paid for!
I am not going to give you advice to file or not to file. Only you can decide what is best for you. I will however try to correct all of the poor advice given.
First some simple facts-
Bankruptcy stays on your credit for 10 years. Your credit will probably be better or the same after filing bankruptcy as it was before filing. Why? The two biggest parts of your credit score are how much debt you have (currently a negative) and your payment history (unknown). Most of my clients are between 630 and 680 a year after filing. Bankruptcy is a negative but it is not given the same weight as the debt you are currently carrying. It is fairly easy to recover from a bankruptcy but it is dependent on what you do going forward. I have a steady flow of clients who have to file bankruptcy to keep their military clearances or gaming licenses because they are less of a risk after filing bankruptcy than before. There are over a million people who file for bankruptcy every year.
(For all of you getting your undergarments in a twist- please see the morality section below.)
Debt consolidation!!!!!!!!!!!!!
Debt consolidation is a scam unless you do it yourself or go through a true non-profit like Consumer Credit Counseling Services (CCCS). But guess what? Debt consolidation and debt management plans wreck your credit worse than bankruptcy. Why? Because you are not paying according to the terms of the agreement. Therefore, late payments are being reported and the final note will say something to the effect of "settled for less than full".
Debt consolidation works like this: you hear a commercial promising to pay your debts for less than you are paying now over the next 3-5 years. You sign up and start making a monthly payment. 8 months to a year later, you get sued and the consolidation company says, "sorry, we can't help you, we are not lawyers. Oh, and by the way, all of the money you just paid us was applied to our fees. The next 2-5 years was going to go to the creditors." Debt consolidation companies can not control the creditors. They use the normal collection cycle to milk you out of a couple grand and then they are on to the next one. If you want to go this route- read Dave Ramsey and do it your self. (It is possible, hard, but possible if you have the extra income.)
You can only do three things in your situation:
1. Do nothing ( the- can't get blood from a turnip- idea; only good if you have no income and no assets and you do not plan to change that in the foreseeable future).
2. Work with your creditors (everything from settling the debt to paying them in full through wage garnishment or asset seizure).
3. Bankruptcy
How do you decide what is right for you?
Everyone has a line. This line is the mathematical point where one penny over it and you can not recover. It does not matter how hard you try or how much you work, you can never pay back what is owed according to the terms of your agreement. Are you there? I can't answer that for you.
I have filed bankruptcy for people who owed millions of dollars and for a person who owed $3000. What would the commentators here say? The first was "justified" and the second one wasn't. The second was a 70+ year old man bringing in $850 a month in Social Security and his debt was loan companies charging 119% interest. His payments were more than his total income and he could not work due to his health.
The point is there is a line. The amount is not important. The line is. Only you can figure out what that line is. You can work the next 10 years and still end up filing bankruptcy. One of the leading causes of divorce is conflict over finances. Why on earth would someone prioritize the quarterly profits of Capital One over their own marriage? Because of advice as given in this thread.
Now my opinion (the morality section).
Quick note if you are a religious person- bankruptcy originates in the Bible. Forgiveness is a part of every religious belief I am aware of. No one is perfect.
An underlying assumption of most of the posts is one of a "moral" obligation on the part of the individual contemplating filing bankruptcy. This makes me see red.
Every single lender on a national level has committed criminal acts against consumers. (Remember too big to fail and its aftermath anyone?)
Every. Single. National. Lender. Many smaller lenders do as well.
Guess what happens to the bank? Pay a fine. (Not to the people who were hurt of course; but to the federal regulatory agency.) Move on.
(In my best announcers voice)
In this corner we have Big Bank X spending billions of dollars on research and marketing with hundreds of years of institutional memory in the smartest minds from the best schools, all laws and regulations are influenced and approved by their lobbyists, all regulators either worked for them or will some day
and in the other corner
a 22 year old.
The world is different than it was 200 years ago. The banks are big boys and they know what they are doing. It is business to them. They created it! They are making money all the way until they push you off a cliff. There is a culture trying to keep you on the edge for as long as possible. Who do you think benefits from this attitude? (Hint: its not you.)
It is a business for them and it is time you treated yourself as a business. Make your own business decision. That may mean doing everything you can to avoid bankruptcy or recognizing that you have crossed that line.
Good Luck!