Took a 50% pay cut to stay employed, should I file bankruptcy?

We have been in your situation except our cut was 75%. It was a no fun period but you can get through it without bankruptcy. Pleae do not use debt consolidation because it is nearly as damaging as a bankruptcy on your credit report. Here is a plan that can help you. If you work the plan, the plan will work for you.

A. Have a garage sale and sell whatever you don't use or need and use that money to pay down your debt.

B. Consider getting a temporary part time job and use all of that salary to pay off your debt quicker. It is better to have a no fun year than a no fun decade.

1. Make a budget. Make the budget a week before you get paid. A budget is not a punishment! It is a tool which will free you from ever having to worry about money again. Put everything in your budget. Especially those annual, biannual, or quarterly bills like car registration, insurance, etc. Give every dollar you are going to bring home the name of where it is going. Add an "emergency fund" category to your budget for 25 dollars and save up until you have 1000-1250 dollars. Your emergency fund will help keep you from getting into new debt because of an emergency. If you can, set up a direct transfer to a savings account for your emergency fund. That way it moves automatically and you don't even have to worry about it. You must cut your spending and live on less than you make.

2.First get current on all of you debts, if you are not already, and make no more late payments, if you have had any. Stop using your credit cards immediately. Do not take on any more debt. Credit cards are like quicksand only the death is much slower. Make a list of all of your debts in order of highest interest rate to lowest interest. Use cash only for your spending from now on.

3.Pay the minimum due on all of your debts and then put your extra money towards paying off the highest interest one first. After you get that one paid off, you put the money you were paying on debt #1 (the minimum payment and the extra payment) towards debt #2. That will pay debt #2 off faster. When that is paid off, you put all three payments towards card #3 and that one will be paid off pretty quickly. As an example:

To start :

Debt #1 (highest interest): minimum payment+ extra payment

Debt #2 (middle interest): minimum payment

Debt #3(lowest interest): minimum payment

Debt #1: paid off

Debt #2: minimum payment from Debt #1+ Minimum payment from Debt #2 +extra payment

Debt #3: minimum payment

Debt #1: paid off

Debt #2: paid off

Debt #3: minimum payment from card #1+ minimum payment from Debt #2+ minimum payment from Debt #3+ extra payment.

That way, you will get them all paid off, on time, and pay the least interest. It will also help towards rebuilding your credit since you will no longer have any late payments. This works no matter how many different debts you may have.

4. After you get all of your debts paid off, add to your emergency fund until you have 6-12 months of income saved up. Put that emergency fund money into a liquid money market fund or into a Bank of America no-risk CD so that if you need the money you can take it out without penalty.

5a. When you have your emergency fund in place, add a category for "fun" to your budget. Save for a holiday, a vacation, a big screen, or dinners out, whatever goal you want. Remember to enjoy your life.

5b. When you have your emergency fund in place, start saving for your retirement. Join the 401(k) plan at work and contribute the maximum. Your employer probably matches at least part of your contribution so why give up free money? Open a Roth IRA and contribute the maximum on a monthly basis. If you start saving for your retirement now, you will probably retire a millionaire.

5c. When you have your emergency fund in place, start saving for your next car. Only buy cars, or other things that depreciate, with cash. Save up for a nicer car. That way you get the interest instead of paying the interest.

I absolutely DO NOT suggest the credit counseling services. The only thing they do is lower your payments and get the creditors to stop calling. However it still shows on your credit that you have defaulted. They do the same thing that you can do yourself but they get paid for it.

I would call all your creditors and explain the situation to them and make up a payment plan with each. Ask them for the lowest payment that you can possibly make without them turning it over to collections.

Cut back on personal spending habits, (ex: $3.00 coffees, and such).

Then take your smallest bill and add as much as you possibly can to that one and once that is paid off continue up the line. Its hard work but if you do it right it will really pay off in the future and you'll be glad you did.

GOOD LUCK

Find another Job maybe a part time one doing anything I'm sorry for your current situation I hope it get better anyway Good Luck and Take Care