10 grandchildren + $100,000 in card debt = bankruptcy?

Changing behavior will solve money problems, not filing

To Her Credit columnist Sally Herigstad
Sally Herigstad is a certified public accountant and the author of "Help! I Can't Pay My Bills: Surviving a Financial Crisis" (St. Martin's Press, 2006). She writes "To Her Credit," a weekly reader Q&A column about issues involving women, credit and debt, for CreditCards.com, and also wrote for MSN Money, Interest.com and Bankrate.com, and has guested on Martha Stewart Radio and other programs.

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Question for the CreditCards.com expert

Dear To Her Credit,
Over the past 10 years, my husband and I (mainly me) have run up credit card debt of about $100,000.00. We have 10 grandchildren, and my son has been in and out of prison. We have been taking care of them, buying all their clothes, paying for rent, day care and bills. It has come to the point I have to pay bills with credit cards because I don't have enough cash. I juggle and rob Paul to pay Peter. I'm turning into a nervous wreck.

I finally told my husband how much debt we have, and he wants us to file for bankruptcy. We spoke to a bankruptcy lawyer. He told us to buy new two new autos because he said we need collateral debt. He also said to make payments on cards that have been charged on in the last two months and just stop paying on the others.

I'm not sure what to do. Praying hasn't helped. I thought of some kind of debt cancellation, but my husband and the lawyer think not. Any ideas?  -- Ruth

Answer for the CreditCards.com expert

Dear Ruth,
Has the bankruptcy lawyer explained to you how things will be different after the bankruptcy? If the circumstances that got you into debt do not change, bankruptcy won't solve anything. You'll still have 10 grandchildren you're trying to support, and not enough income to do it. And you won't be able to use your credit cards after you file.

As far as buying two brand new cars that you and your husband have no way to pay for, you see the problem with that or you would have done it already. Most of us could not in good conscience walk into a car dealership, feign interest in a car, and go through the paperwork knowing we can't even make the first payment.

You say you "finally" told your husband how much credit card debt you have. No wonder you've been so stressed -- you've been trying to carry this load and keep it a secret at the same time. You and your husband couldn't work together and make the best plans when you weren't communicating openly about finances.

I strongly urge you to seek credit counseling as a couple before you make a decision to file for bankruptcy. A counselor from a nonprofit, accredited credit counseling agency  can look at your family finances and help you look at all the options together. They'll help you see exactly where you stand right now and how to take control of your finances.

The credit counselor can also point you in the direction of state and federal aid for families raising relatives. Very few of us could financially support 10 grandchildren, in trying circumstances, without help.

States vary widely in the kind of support and programs they provide. These resources may get you started in right direction:

  • Kincare, a blog for grandparents raising grandchildren
  • GrandFamilies of America, an organization that helps grandparents and relative caregivers navigate the sometimes complex government systems so they can keep their families together.
  • The department that offers health and social services in your state (they go by many names).

I hope that with the help of a good credit counselor, you can find a solution other than bankruptcy. Bankruptcy is emotionally draining and a lot of hassle. It is in no way the "easy way out." In fact, most people who file for bankruptcy later wish they hadn't.  If you decide to go through with bankruptcy, find a lawyer who doesn't ask you to purposely buy things you can't afford or do anything else that doesn't seem quite right to you.

All the best to you as you raise your precious grandchildren. Take care of yourself and your credit!

See related: 11 signs your spouse has credit problems, Take control of debt, avoid bankruptcy, 8 steps to picking a credit counselor, counseling agency, Bankruptcy does offer fresh start, at a high cost, Starting over after bankruptcy

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Updated: 11-23-2017