No. of Recommendations: 0
Thanks for the feedback, both harsh and encouraging. In my defense, I would like to make some points.

First Point: I have not filed for BK. I am considering it as a worse case option. I have not filed because I still have options open, and there is still room to manuver. I realized that at best, I will have late payment history on my CC's, and at worse, BK chapter 7.

I owe the CC's a lot of money. I know that they were not going to be very nice to me when I went delinquint. My 401K assets were considerable enough to hire a good attorney to advise me. I needed to know what they could, and would, do to me. I needed to know how much of my assets they could take, and what other consequences I would suffer if they did this. I needed to know how much of my pay they could garnish, and what else they could do. He advised me to simply cut to the chase, file chapt 7, and get on with my life.

There is no way I can pay them back on their terms as currently written (22% APR plus lots of pentalties). I have to do something else. What I want is for them to stop and reverse pentalies, and lower the interest rate so I can pay all of them off over a long period of time. Currently we are far, far apart on a deal.

Second Point: I stopped paying my CC's for a few months in order to get other aspects of my financial life in order. I was stretched so thin meeting CC payments that I was serously risking missing a rent payment and loosing my home. I was also behind on many other bills and had zero emergency savings. I made the decision to postpone CC payments for 6 months so I can get my other bills caught up and put $2K in the savings account for any emergancies. By late 1997, my family could either be homeless, or late on the CC bills. I chose the latter.

I'm now caught up on the monthly bills, balanced my budget, and am ready to resume payments, but not at the levels I was before (otherwise I'll be in the same jam as before). I am negotiating with the CC's to come up with a re-payment plan I can live with. I have no desires to get another credit card. Just to get some financial sanity in my life. The CC's are playing serious hardball with me right now. I need my attorney to help me negotiate with them.

Third Point: I didn't fund my 401K with my credit cards. It just ended up looking like that because of the bull market, profit sharing, and some great company stock. Over my lifetime I have contributed only $32K before taxes to my 401K. That works out to about $20K after taxes over the last 11 years. I stopped my 401K contributions for almost a year to increase my take home pay to pay for an "emergency" 3 years ago. My paycheck went up a whole $50 bucks. I figured if I can't set aside $50 a check for retirement, then I am a super idiot.

I'm extreamly reluctant, apparently much more than other Fools, to tap in to my 401K because I don't want to make TWO major financial mistakes in my life (CC's being the first).

All the decisions I face are irrevokable and all have very serious long term consequences. I must weigh all the facts, and consider all options before proceeding. That is why I didn't walk straight from my lawyer's office to the BK court. That would be too easy and it wouldn't address the roots of the problem. I need to know it is possible to get out of the jam I'm in. That is why I am here on this board.

I'm sorry if I gave the impression that I want the easy way out. I really don't want to use the escape hatch. My highest priority in life is to keep my family housed, fed, and healthy, both today and tomorrow. If I can not do that, then I have to take whatever actions I need to protect them, even if it means BK for me.
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