Declaring bankruptcy, is it worth it ?

[Novamanpv]

Been working in the LI business on and off since early last fall. I am contracted with roughly 10 carriers. I have had multiple personal/family issues arise that has severely limited the time I could work and also altered my mindset during times when I could be working. All that is behind me now but I find myself in about 20k of cc debt and credit cards close to maxed out. Ive done some balance transfers already. I bought a home two years ago and have a small amount of equity in it. I lease a car as well.

I don’t have money for leads and have worked my warm market and leads I do have to the ground.

Hitting the reset button with bankruptcy seems like the best thing to do to clear the way to get myself back on track. I will say I am taking 100% responsibility for the situation I find myself in and looking for the best path forward.

Any thoughts or advice would be greatly appreciated. I know in this business that unfortunately I am not alone and looking to see how other handled similar situations.

 

[Stephen]

The best way to hit the reset button is to get a regular job and pay off your credit cards. Look to alternative financing for the debt such as a HELOC or a credit union for lower interest rates.

If you declare bankruptcy you will have to answer and explain that every time that you apply to contract with a carrier , and renew your insurance license. $20k is workable , don't bail yet.

 

[somarco]

When I transitioned from the corporate world to self employed I incurred close to $50k in debt. Some was via credit cards, other wasn't really debt in the traditional sense but I borrowed from savings.

Not all of that debt was business expenses. Much was paying the house note. Still, it was debt I did not have before.

It took me 16 months to replace my former income.

About the time money was flowing in on a somewhat regular basis my former employer sued me claiming I breached my non-compete.

I didn't but that did not matter. At that point the legal system ASSUMED their suit was valid and I would have to pay the summary judgement of $50k or defend myself.

I chose to defend.

That took a year and $20k for legal fees.

There were times when I considered BK but never pulled the trigger.

All this was many years ago but I have not forgotten, nor have I regretted my decision to plug forward vs filing BK.

You will have to make your own choice but consider the impact of BK on availability of future credit, jobs and carrier appointments. It is a hefty price to pay for bailing on your obligations.

 

[somarco]

The best way to hit the reset button is to get a regular job and pay off your credit cards.

THIS ^^^

 

[UKTX]

It doesn't sound like you are totally looking down the barrel of a bankruptcy.....

20k is really not that big of a number these days.

Declaring BK will most definitely have a negative impact on your ability operate as an insurance agent.

It won't be impossible to get future appointments with a BK, but it will always be a question you have to answer for.

 

[rousemark]

Been working in the LI business on and off since early last fall. I am contracted with roughly 10 carriers. I have had multiple personal/family issues arise that has severely limited the time I could work and also altered my mindset during times when I could be working. All that is behind me now but I find myself in about 20k of cc debt and credit cards close to maxed out. Ive done some balance transfers already. I bought a home two years ago and have a small amount of equity in it. I lease a car as well.

I don’t have money for leads and have worked my warm market and leads I do have to the ground.

Hitting the reset button with bankruptcy seems like the best thing to do to clear the way to get myself back on track. I will say I am taking 100% responsibility for the situation I find myself in and looking for the best path forward.

Any thoughts or advice would be greatly appreciated. I know in this business that unfortunately I am not alone and looking to see how other handled similar situations.

Have no idea what market you work but you can make a very good amount of money canvasing selling cancer insurance or Final Expense if you have teh courage and determination to do it....BR should be your last resort but if you do decide to file, file a chapter 7 and be doen with the debt rather than filing a 13.

 

[rousemark]

When I transitioned from the corporate world to self employed I incurred close to $50k in debt. Some was via credit cards, other wasn't really debt in the traditional sense but I borrowed from savings.

Not all of that debt was business expenses. Much was paying the house note. Still, it was debt I did not have before.

It took me 16 months to replace my former income.

About the time money was flowing in on a somewhat regular basis my former employer sued me claiming I breached my non-compete.

I didn't but that did not matter. At that point the legal system ASSUMED their suit was valid and I would have to pay the summary judgement of $50k or defend myself.

I chose to defend.

That took a year and $20k for legal fees.

There were times when I considered BK but never pulled the trigger.

All this was many years ago but I have not forgotten, nor have I regretted my decision to plug forward vs filing BK.

You will have to make your own choice but consider the impact of BK on availability of future credit, jobs and carrier appointments. It is a hefty price to pay for bailing on your obligations.

If a person sues soemone and does not prevail, they should ahve to pay all the legal fees incurred by the person they sued plus reimburse the defendant for lost income. That would put a stop to a lot of frivolous lawsuits..

 

[somarco]

If a person sues soemone and does not prevail, they should ahve to pay all the legal fees incurred by the person they sued plus reimburse the defendant for lost income. That would put a stop to a lot of frivolous lawsuits..

In a perfect world . . .

Once they dropped the suit I asked my attorney about counter-suing to recoup my OOP costs. He said I had a very good case and should win.

Collecting would be another matter . . .

He also said it could take years and about $100k in legal fees to pursue.

 

[pfg1]

The best way to hit the reset button is to get a regular job and pay off your credit cards.

Agree! And maybe work the ins part time on the side until you get back on track.

No way I'd file, personally. Been much deeper than that a few times in my life due to life happening. Roll up your sleeves and dig yourself out. The BK is a tough route on many fronts and for a long time.

 

[junkman]

When I was new, in debt and broke, a friend of mine said "Relax and go to work. Your creditors have the problem."

Pay credit cards last. Keep food, house and car current. Everyone unsecured will fuss and moan but can't really do much if you don't have anything. They can garnish wages but that is usually a long way off and you can dig out before then. Make a game plan and go.