My friend bankruptcy attorney Doug Jacobs tackles client guilt about filing bankruptcy by getting the client to consider how much more than the original charge they’ve paid the credit card company over time.
I have success getting clients to consider what they could do with the money they are now paying out on minimum payments (on debt they can never, ever, pay off). The couple yesterday are paying $4000 a month in minimum payments. She saw in a flash that if they eliminated the credit cards, they could put money aside for retirement. Bingo!
The cost to the card issuer of nonpayment by a segment of the card holders is built into the price of credit. In recent years, the card companies borrowed money for 3% and lent it out for 18%. Plenty of room between those numbers for some bankruptcies.
This line of thinking is sound only, in my mind, if there is no way for the client to pay off the debt. If the hole is not so deep, then put your shoulder to the wheel, reduce your cell phone plan, and pay off the cards.
But if the debt is beyond payment in full, then I think it is appropriate to admit defeat, get a bankruptcy discharge, and manage money going forward in ways that makes your family less vulnerable and offers hope of a dignified retirement.