No. of Recommendations: 2
He's in a hole. The first question is, has he stopped digging yet?

Really, before you can even begin to address things, he needs to make sure he is living at or below his means. Even declaring bankruptcy won't help if his lifestyle costs $75K and his income is $52K. He'll just be in the same position in a few years and won't be able to re-file for many years. (plus, spending when you know you won't pay it back is basically stealing).

Second jobs, starting a cash-only diet, writing down every expenditure and cutting everything he can is my recommendation. Pay the minimums and take any extra money and snowball it into the debt - for maximum savings pay the highest interest rates first, although many people have success with the Dave Ramsey method of paying off the debts smallest to largest.

He can't be afraid to look at the big things for potential savings - like housing. If you buy a house at the top of your limit when you're making $95K, and now you make $50K, you can't afford that house anymore. Like cars - you drive a $15K car when you're making $95K but when you're making $52K and are $50K in debt, you drive a beater.

I don't think filing bankruptcy is not going to be a good solution since he does make decent money. He'd probably have to file chapter 13 and go into a 5-year payment plan to pay the creditors off at some rate. So he might as well try to work out payments himself and keep that sort of thing off his credit.

401K is pretty protected. Home is secured by the mortgage - if he stays current on that other creditors shouldn't be able to take it. They can sue and get a judgement of course.
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