Quick history: My first child was born at 20, two more in the subsequent 10 years. Both my husband and I have worked very hard at lower-wage jobs to try to keep our family afloat, but essentially we've always been broke. Our daughter was diagnosed with cerebral palsy in 2005, we were insured, but just to get the diagnosis, we racked up close to $20,000 in medical bills, which is still climbing for her treatment. Now our youngest son has a severe medical condition and we reached our insurance out-of-pocket maximum of $12,000 between January and May this year. We will continue to have enormous medical bills going forward. We also made a very bad move and purchased a new Kia (which we couldn't afford), instead of paying our loan payments in 2007. We allowed it to get repossessed. The company that holds the debt periodically gets permission to garnish our wages until we're able to prove we don't have the means to pay. My husband has worked himself through the ranks over the past 8 years, finally earning enough seniority at a major railroad to make a very good salary. He was taking home $1,500-$1,900 a month and living in another state ($500 rent for his apartment.) As of this month, he's been and should continue to be able to hold a job as an engineer grossing about $6,000- $8,000 per month. I net approximately $200 a month working part-time.
My question: My husband's family feels we should file for bankruptcy to give us a fresh start. We owe approximately $42,000 between the car and medical bills and an old overdrawn bank account. I think that since we finally, after 15 years, have the means to pay our creditors back, we should. I want a house one day. I'm torn. I worry it will take us years to pay back our creditors and we'll continue to be broke. Our oldest son starts college in four years, and we'd like to have the means to financially assist him. Do you think we should file for bankruptcy?
