# So I owe $25k in credit card debt, with 75k income. Why shouldn't I declare bankruptcy? **URL:** \ **Category:** In My Humble Opinion\ **Created:** [February 1, 2019, 12:52am UTC](https://boards.straightdope.com/t/so-i-owe-25k-in-credit-card-debt-with-75k-income-why-shouldnt-i-declare-bankruptcy/828758 "2019-02-01T00:52:25Z")\ **Posts on this page:** 16\ **Page:** 5
**Author:** ![Maastricht](https://avatars.discourse-cdn.com/v4/letter/m/a88e57/32.png) [@Maastricht](https://boards.straightdope.com/u/Maastricht)\ **Post date:** [August 26, 2019, 9:25am UTC](https://boards.straightdope.com/t/so-i-owe-25k-in-credit-card-debt-with-75k-income-why-shouldnt-i-declare-bankruptcy/828758/81 "2019-08-26T09:25:09Z")
Weird. Personal debt and credit ratings do not exist in the Netherlands. We have a different system. Many people have mortgages, young people have student debr, but no-one has credit ratings and the whole idea is that debt is a bad thing, unsustainable and expensive. ---
**Author:** ![Lord\_Feldon](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/lord_feldon/32/341_2.png) [@Lord\_Feldon](https://boards.straightdope.com/u/Lord_Feldon)\ **Post date:** [August 26, 2019, 10:19am UTC](https://boards.straightdope.com/t/so-i-owe-25k-in-credit-card-debt-with-75k-income-why-shouldnt-i-declare-bankruptcy/828758/82 "2019-08-26T10:19:27Z")
The people of the Netherlands have managed to go into [quite a lot of debt](https://www.theglobaleconomy.com/rankings/household_debt_gdp/) with that attitude. ---
**Author:** ![Hermitian](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/hermitian/32/470_2.png) [@Hermitian](https://boards.straightdope.com/u/Hermitian)\ **Post date:** [August 26, 2019, 12:59pm UTC](https://boards.straightdope.com/t/so-i-owe-25k-in-credit-card-debt-with-75k-income-why-shouldnt-i-declare-bankruptcy/828758/83 "2019-08-26T12:59:45Z")
> [@Lord\_Feldon](#): > > The people of the Netherlands have managed to go into [quite a lot of debt](https://www.theglobaleconomy.com/rankings/household_debt_gdp/) with that attitude. Wow. I always thought the USA was the worst when it came to personal debt. Glad to know we aren’t the worst at everything! ---
**Author:** ![Pantastic](https://avatars.discourse-cdn.com/v4/letter/p/3bc359/32.png) [@Pantastic](https://boards.straightdope.com/u/Pantastic)\ **Post date:** [August 26, 2019, 2:00pm UTC](https://boards.straightdope.com/t/so-i-owe-25k-in-credit-card-debt-with-75k-income-why-shouldnt-i-declare-bankruptcy/828758/84 "2019-08-26T14:00:59Z")
Bankruptcy is a bad decision with the financials you’ve laid out here. Theoretically the cost of it would be much larger than the cost of paying off the debt, and in general the first step in bankruptcy is restructuring and seizing assets to pay off debt, which means that a debt you can pay off in a year is probably just going to result in a court order to pay off the debt. > [@echoreply](#): > > The out has repercussions, certainly, and those repercussions probably make taking the out not worthwhile, but I don’t see how taking it is unethical. The banks gave me some money secured by my house, and if I don’t pay back the money in the agreed way, then the bank gets the house. That might not be what either of us want, but it is part of the agreement. I will go further than this: I think that if you accept that business ethics, which the credit card companies are operating under, are valid in the first place, then you should apply them to yourself. If you then consider yourself or your family the stakeholders in your personal finances and career, and examine your ethical duty to maximize stakeholder returns, you determine that it would actually be unethical to refrain from attempting to maximize your personal profit. The idea that an individual has an ethical obligation to follow an additional agreement not codified into the combination of formal contract (usually written in dense legalese by the lender’s lawyers to be as favorable to them as possible) and laws (usually heavily influenced by lobbyists paid for by the lenders to be as favorable to them as possible) instead of using the same ethical framework that lenders do makes no sense and simply makes you a sucker. ---
**Author:** ![Maastricht](https://avatars.discourse-cdn.com/v4/letter/m/a88e57/32.png) [@Maastricht](https://boards.straightdope.com/u/Maastricht)\ **Post date:** [August 26, 2019, 2:10pm UTC](https://boards.straightdope.com/t/so-i-owe-25k-in-credit-card-debt-with-75k-income-why-shouldnt-i-declare-bankruptcy/828758/85 "2019-08-26T14:10:06Z")
> [@Lord\_Feldon](#): > > The people of the Netherlands have managed to go into [quite a lot of debt](https://www.theglobaleconomy.com/rankings/household_debt_gdp/) with that attitude. not quite comparable. That is only because Most Dutch own their home and houses are ridiculously expensive compared to income. We just have insane mortgages. Very Little of that debt is credit card debt via consumer spending. ---
**Author:** ![Nava](https://avatars.discourse-cdn.com/v4/letter/n/da6949/32.png) [@Nava](https://boards.straightdope.com/u/Nava)\ **Post date:** [August 26, 2019, 2:12pm UTC](https://boards.straightdope.com/t/so-i-owe-25k-in-credit-card-debt-with-75k-income-why-shouldnt-i-declare-bankruptcy/828758/86 "2019-08-26T14:12:34Z")
> [@Maastricht](#): > > Weird. Personal debt and credit ratings do not exist in the Netherlands. We have a different system. Many people have mortgages, young people have student debr, but no-one has credit ratings and the whole idea is that debt is a bad thing, unsustainable and expensive. > [@Maastricht](#): > > not quite comparable. That is only because Most Dutch own their home and houses are ridiculously expensive compared to income. We just have insane mortgages. Very Little of that debt is credit card debt via consumer spending. Spain is similar, both in that we don’t have credit ratings (we do have the dreaded Bad Debtor’s List though) and in that the biggest debts most people ever get are mortgages and car loans. Consumer lending exists but most people use it short-term; predatory lending companies are trying to change that. ---
**Author:** ![Doctor\_Jackson](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/doctor_jackson/32/32_2.png) [@Doctor\_Jackson](https://boards.straightdope.com/u/Doctor_Jackson)\ **Post date:** [August 26, 2019, 3:51pm UTC](https://boards.straightdope.com/t/so-i-owe-25k-in-credit-card-debt-with-75k-income-why-shouldnt-i-declare-bankruptcy/828758/87 "2019-08-26T15:51:39Z")
> [@fedman](#): > > actually, if you get a loan from 401K that’s considered distribution , which is taxable Actually, if you take a loan against your 401k _and don’t pay it back_ it would be considered a distribution and subject to appropriate taxes and penalties. So long as it is paid back per the agreement there is no tax liability. ---
**Author:** ![msmith537](https://avatars.discourse-cdn.com/v4/letter/m/d9b06d/32.png) [@msmith537](https://boards.straightdope.com/u/msmith537)\ **Post date:** [August 26, 2019, 4:29pm UTC](https://boards.straightdope.com/t/so-i-owe-25k-in-credit-card-debt-with-75k-income-why-shouldnt-i-declare-bankruptcy/828758/88 "2019-08-26T16:29:17Z")
> [@Bijou\_Drains](#): > > I recall as a college student local places stopped taking checks near the end of the school year, the reason being that they were afraid of bad checks and then the student would leave town. > > Also some places would not take checks numbered 101-200 because that meant a new account and were more likely to bounce a check. My sophomore year, I lived in an on-campus apartment where apparently the tenant from the previous year rang up a whole ton of debt and went back home to whatever country he was from. So we spent the better part of the year getting calls from collection agencies. ---
**Author:** ![bump](https://avatars.discourse-cdn.com/v4/letter/b/7c8e57/32.png) [@bump](https://boards.straightdope.com/u/bump)\ **Post date:** [August 26, 2019, 5:04pm UTC](https://boards.straightdope.com/t/so-i-owe-25k-in-credit-card-debt-with-75k-income-why-shouldnt-i-declare-bankruptcy/828758/89 "2019-08-26T17:04:34Z")
> [@k9bfriender](#): > > Good idea. > When I first got my first checking account and checkbook, I went to the store for groceries, pulled out my checkbook, and wrote my first check. There was some discussion, the cashier walked away with my check, and came back with a manager. They told me that they would not accept the check, as its number was so low. I dug around in my pockets, pulled out another checkbook, this one starting at 201, and they took it. Threw out the first after that. Hah! I remember getting my first bank account and the person setting it up at the bank said “Oh, we’ll want to start your first book of checks at 1000” I asked why, and they said “So it looks like you’ve been writing checks for a while- some people won’t take low numbered checks.” This would have been 1989 or so. ---
**Author:** ![doreen](https://avatars.discourse-cdn.com/v4/letter/d/858c86/32.png) [@doreen](https://boards.straightdope.com/u/doreen)\ **Post date:** [August 26, 2019, 8:02pm UTC](https://boards.straightdope.com/t/so-i-owe-25k-in-credit-card-debt-with-75k-income-why-shouldnt-i-declare-bankruptcy/828758/90 "2019-08-26T20:02:30Z")
> [@Doctor\_Jackson](#): > > Actually, if you take a loan against your 401k _and don’t pay it back_ it would be considered a distribution and subject to appropriate taxes and penalties. So long as it is paid back per the agreement there is no tax liability. And that _per the agreement_ really means something- for reasons I don’t know, when my husband took a 401K loan, his employer did not start taking the loan payments right away. And my husband didn’t read the messages from the fund because he thought they were trying to sell him something ( the emails didn’t have any information, just directed him to log into the account and read a message) I only found out when we got a tax form treating the whole loan amount as a distribution - even though there were only a couple of missed payments. ---
**Author:** ![actualliberalnotoneofthose](https://avatars.discourse-cdn.com/v4/letter/a/e79b87/32.png) [@actualliberalnotoneofthose](https://boards.straightdope.com/u/actualliberalnotoneofthose)\ **Post date:** [August 26, 2019, 8:19pm UTC](https://boards.straightdope.com/t/so-i-owe-25k-in-credit-card-debt-with-75k-income-why-shouldnt-i-declare-bankruptcy/828758/91 "2019-08-26T20:19:26Z")
> [@Kent\_Clark](#): > > If you marry during that time, your spouse’s credit rating could take a hit, as well. Unless I’m overlooking it, I don’t see how this odd assumption went unchallenged. Credit ratings are individual. A spouse is not affected (directly) by a spouse’s prior bankruptcy. It might make buying a house together more difficult or make some things inconvenient if the future spouse has little or no income but that’s about the only thing I can think of. ---
**Author:** ![Pantastic](https://avatars.discourse-cdn.com/v4/letter/p/3bc359/32.png) [@Pantastic](https://boards.straightdope.com/u/Pantastic)\ **Post date:** [August 26, 2019, 8:28pm UTC](https://boards.straightdope.com/t/so-i-owe-25k-in-credit-card-debt-with-75k-income-why-shouldnt-i-declare-bankruptcy/828758/92 "2019-08-26T20:28:55Z")
> [@bump](#): > > Hah! I remember getting my first bank account and the person setting it up at the bank said “Oh, we’ll want to start your first book of checks at 1000” I asked why, and they said “So it looks like you’ve been writing checks for a while- some people won’t take low numbered checks.” This would have been 1989 or so. Yep, my bank did that for me, and I find it weird how common of a restriction that was when you could order checks with literally any check numbers up to their printing limit on them and the bank would honor them without trouble. I knew several people who started their checking account at 10,001 (and I think in one case 100,001) just to have a laugh at the ‘early check’ protection. ---
**Author:** ![jtur88](https://avatars.discourse-cdn.com/v4/letter/j/e9c0ed/32.png) [@jtur88](https://boards.straightdope.com/u/jtur88)\ **Post date:** [April 23, 2020, 10:53am UTC](https://boards.straightdope.com/t/so-i-owe-25k-in-credit-card-debt-with-75k-income-why-shouldnt-i-declare-bankruptcy/828758/95 "2020-04-23T10:53:40Z")
Well, you could live for a year on $50k, like the rest of us do, and pay it off. Learn to cook simple nutritious meals, unplug all entertainment devices, read library books. Among other things, you’ll feel really proud of yourself. ---
**Author:** ![Darren\_Garrison](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/darren_garrison/32/92_2.png) [@Darren\_Garrison](https://boards.straightdope.com/u/Darren_Garrison)\ **Post date:** [April 23, 2020, 1:19pm UTC](https://boards.straightdope.com/t/so-i-owe-25k-in-credit-card-debt-with-75k-income-why-shouldnt-i-declare-bankruptcy/828758/96 "2020-04-23T13:19:09Z")
> [@oraswan](#): > > Once I had a problem with a debt 'cause my insurance didn’t pay everything on time. So I was called to pay my debt about I had no idea but I found a Private Debt Collection Agency. They work with companies and with individuals too. So they helped me to find out what is the problem and how to solve it. You can text them and ask for some advice. Dude, you forgot to post your spam link! ---
**Author:** ![running\_coach](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/running_coach/32/15836_2.png) [@running\_coach](https://boards.straightdope.com/u/running_coach)\ **Post date:** [April 23, 2020, 1:20pm UTC](https://boards.straightdope.com/t/so-i-owe-25k-in-credit-card-debt-with-75k-income-why-shouldnt-i-declare-bankruptcy/828758/97 "2020-04-23T13:20:46Z")
> [@Darren\_Garrison](#): > > Dude, you forgot to post your spam link! There’s been several of those lately. ---
**Author:** ![FairyChatMom](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/fairychatmom/32/21906_2.png) [@FairyChatMom](https://boards.straightdope.com/u/FairyChatMom)\ **Post date:** [April 23, 2020, 1:21pm UTC](https://boards.straightdope.com/t/so-i-owe-25k-in-credit-card-debt-with-75k-income-why-shouldnt-i-declare-bankruptcy/828758/98 "2020-04-23T13:21:18Z")
An old thread started by a banned member has been resurrected - that’s not suspicious at all… [Previous page](https://boards.straightdope.com/t/so-i-owe-25k-in-credit-card-debt-with-75k-income-why-shouldnt-i-declare-bankruptcy/828758.md?page=4)