They Managed 'Dozens Of Credit Cards Responsibly'—Until They Didn't. Now They Owe $177,000 And Can't Find A Way Out. Here's What Happened

Benzinga and Yahoo Finance LLC may earn commission or revenue on some items through the links below.

A financially overwhelmed Redditor who once had a perfect credit score and juggled multiple credit cards responsibly is now facing more than $177,000 in debt and thinking about bankruptcy.

Debt Spiral With No End In Sight

In a recent post on r/CRedit, the original poster laid out a bleak financial picture: $118 in total cash and more than $160,000 in credit card debt spread across cards from Bank of America (NYSE:BAC), Barclays (NYSE:BCS), American Express (NYSE:AXP), Capital One (NYSE:COF), JPMorgan Chase (NYSE:JPM) and U.S. Bancorp (NYSE:USB). On top of that, they owe nearly $17,000 on a personal loan from SoFi (NASDAQ:SOFI) at a steep 12.66% interest rate.

“I used to have a perfect credit score and managed dozens of cards responsibly,” OP wrote. “But everything went downhill after I got screwed over by a crooked contractor.”

Don't Miss:

Amazon and NVIDIA Partnered With This Robot Chef — Now Individual Investors Can Too Accredited Investors Can Now Tap Into the $36 Trillion Home Equity Market — Without Buying a Single Property

According to the post, that legal battle has dragged on, forcing them to use credit cards to stay afloat. “I had to spend a huge amount on legal fees and the case is still ongoing, which completely wrecked my finances,” they said.

Once employed at a major tech firm earning about $175,000 per year, OP is now unemployed and receiving disability income.

Bankruptcy May Be The Only Option

The Reddit community responded in force. Hundreds of commenters advised filing for Chapter 7 bankruptcy immediately.

“You need to file bankruptcy,” one person wrote frankly. Another added, “Don't even bother trying to pay it off. Much more worth it to just save up $3K for an attorney and peace of mind.”

Trending: This Jeff Bezos-backed startup will allow you to become a landlord in just 10 minutes, with minimum investments as low as $100.

OP acknowledged that filing may be inevitable: “At this point, it’s either I burn out completely or just wipe everything clean through bankruptcy and start over.”

Some commenters warned about continuing to spend on credit cards, as it could affect the bankruptcy case. “Do not run any of them up prior to filing or they'll hold you responsible post bankruptcy,” one person cautioned.

Others urged OP to think about the future now. “You know you’re super cooked, but after bankruptcy, what’s next?” one person commented. “You’re gonna burn some major bridges with the big banks.”

繼續閱讀

See Also: The ‘ChatGPT of Marketing' Just Opened a $0.81/Share Round — 10,000+ Investors Are Already In

A Contractor Dispute Lit The Fuse

OP said they paid a contractor in stages for renovations, but the relationship soured quickly. “They overcharged, left a lot of work incomplete, and then tried to file a mechanic’s lien claiming they were still owed over $100K,” they wrote.

Defending against that lien has drained any savings OP had left. “I’m mainly trying to recover what I overpaid and protect my property from being wrongfully liened,” they explained.

They added that they don’t own significant assets and have no equity in their home, which they co-own with family. Their 401(k) and Roth IRA are protected under bankruptcy law.

Despite the chaos, OP remained focused on resolving the situation legally. “I’d rather deal with it the right way under U.S. law—file for bankruptcy, clear everything out, and move on with my life.”

Read Next: Backed by $300M+ in Assets and Microsoft's Climate Fund, Farmland LP Opens Vital Farmland III to Accredited Investors

Image: Shutterstock

This article They Managed 'Dozens Of Credit Cards Responsibly'—Until They Didn't. Now They Owe $177,000 And Can't Find A Way Out. Here's What Happened originally appeared on Benzinga.com

查看留言