Asian Journal- The Filipino-American Community Newspaper

QUESTION: I was working as an Certified Nursing Assistant at a facility in Cerritos and at a hospital in downtown Los Angeles. Six months ago, the nursing facility decided to cut my hours because another employee complained about me. They said that I was slow and lazy. However, I believe that they don’t like me because I’m Filipino.

At first, I was not worried because I have some savings and about 10,000 in my 401K account. I thought that I could find another job easily. However, I had a hard time finding a second job even after 5 months. Meantime, I still have to send money to the Philippines, but with the dollar being so low, I have to send more money to support my mother and father.

With my hours cut, I cannot pay my bills on time. I was two months late on my Chase credit card, which is about 4,000. I was 5 months delayed on my Bank of America credit card. They all cut off my credit line. Hence, I live paycheck to paycheck. I do not know how long I can hold off the creditors off my door. I am so scared whenever phone rings. They even call me at work, it is so embarrassing! Two days ago, I got a certified mail from Court. It appears that Bank of America is suing me for $5,458.80. I am afraid to answer my phone, to open my mails, or to even answer the door.

I have a total of $30,000 in credit card debts from 5 credit card companies. I am single with an income of only $3,000 per month. What will I do? My friend say I can file for bankruptcy but I am afraid to do so. Will it hurt my chances of getting a new job. I also have a 2009 Toyota Corolla that I am still paying for. Will they take that away from me too?

Answer: You have two options, you can settle your credit cards 20 cents to a dollar or you can file for bankruptcy. You can dip into your 401K to settle your debts and not file for bankruptcy. However, it may be more prudent not to dip into your 401K account and to simply file for bankruptcy. Your 401K account, assuming it had been established about a year before you filed for bankruptcy will be protected from garnishment if you file for bankruptcy. Moreover, most of your debts are unsecured credit and you are entitled to file for bankruptcy under Chapter 7. Under Chapter 7 all your unsecured debts, except for taxes, alimony, student loans, and other priority debts can get discharged. This means that you do not have to pay a single cent to any one of them.