Sued By Chase For $7k, In Debt For $40k+, I Think I'll Declare Bankruptcy

Justin’s friend who was being sued by Chase Bank for $7,500 has an update for us after he and his friend read our advice and your comments on his situation. Turns out he’s not just in debt for $7,500, but for over $40,000:

Justin writes,

I spoke with my friend over the weekend, and he is working with a bankruptcy attorney. As I speculated, the Chase lawsuit was simply the “tip of the iceberg.” He’s actually in debt to the tune of nearly $40,000 ($30,000 car/consumer and $10,000 medical). He was also taken for about $4,000 from a “Debt Relief” company back when the economy was just beginning
its downward spiral.

Getting a loan from his family, although a good idea for most, was impossible in this situation. His parents are serial bill payers, and some of his debt went towards paying his parent’s bills when they couldn’t. Fiscal irresponsibility begets fiscal irresponsibility apparently.

Ultimately, declaring bankruptcy, based on his salary and his living situation, is probably not a terrible idea in this case. Being free of this huge financial burden and the harassing phone calls that came with it (even if only temporarily) provides a great deal of solace for him. Who knows, this might be the beginning of another fiscal responsibility success story. I’ll write back if/when he turns things around.

Thanks,

Justin (and Justin’s liver)

Aight. $40k is really not that much debt to get out of if you’re willing to get serious about it. It sounds like Justin’s friend isn’t, or believes, falsely, that he’s powerless. You can wallow in drink and self-pity and blame genetics, or you can get real.

Harassing phone calls? Those are potentially illegal and you can sue them for statutory damages. See, “Sample Letter For Telling A Debt Collector To Drop Dead.”

Building a nugget every month that you use to pay off debts? Totally doable if you use the tactics I described in the previous post and in the story about a reader who got debt free in 14 months.

But while I’d rather see Justin’s friend bootstrap and get financially responsible, but I do also understand that some people just aren’t capable of that. It doesn’t sound like Justin will be making any real estate transaction in the next decade so bankruptcy might not be the worst thing. Just as long as he uses it as a way to start over fresh and start being smart about his personal finances and stay away from using debt tools he can’t handle.

PREVIOUSLY: Sued By Chase Bank For $7500. Should I Declare Bankruptcy?