Returning to my earlier comment. You want to be careful about your future liabilities and may need to seek legal advice so you don't end up with trouble with the IRS as well as your own state tax division. There is more to it sometimes than just walking away from a debt because it could be considered a form of income due to the fact you didn't have to pay for it. This could be be big stuff!!!

Tough situation. U should def try a hardship program if you can at all work thru it. If not, you can always do what I and a lot of people did and that's stop paying and let the bills charge off. It will stay on your CR for 7 years (which feels like forever when it happens) and you do risk the collection agencies coming after you if you have any assets they can sue against. But, there are statutes of limitations in all States on how long they can legally come after you. California appears to be 4 and Florida 5. Check out the following website for more info on that.

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Heads up! On the big "B" for Bankruptcy... ColoNative captured the subject well. Your future will have a big "B" following you around. I went down in 09/2001 with the big "B". Lenders tell me today, come back after the ten years when the big "B" falls of my credit report. It has been a scarlet letter "A". Also, do NOT attempt a bankruptcy without an attorney. With the new rules you need legal counsel to guide you through the maze. If you make a mistake it will be on your head not the creditors. There was some talk that the new big "B" helped us regular folks! Hogwash... it helped the lenders. Believe me if the lenders decide to take you to task on your assets it will require an attorney with big "B" experience. I am glad there was an attorney in mine. I was stupid and tried to go start a business without a clue...: It cost me about $200K and the lenders took the hit. So be careful.... Yes it gives you a new life but 10 years on the Chapter 7 is longer than you think!!!

Florida is ridiculously pro debtor; however, California can be as well. At any rate, the US Bankruptcy Court will require you to file in the State where you reside. Also, keep in mind that you will be required to attend the 341 Meeting of the Creditors so you will want to file where you will be living as the meeting is generally a month into the filing. Chapter 7's are generally a three month process so you can't expect to file in CA and then jump a plane to FL right away.

But if you are able you should look into the advice that HJM gave you. Bankruptcy is like a Scarlet Letter that will follow you for years. And with the economy the way it is now, obtaining new credit will likely be harder then ever.

Check into debt management programs, MMI is a large debt management company, just Google them. Also, if you are able, see if the creditors will accept a settlement on the debt.

If you really are planning a bankruptcy, I recommend a Chapter 13 wage earner plan because you pay back a portion of your debt and the public record will fall off after 7 years as opposed to a Chapter 7's 10 years.

Have you tried contacting your lenders to see if they can enroll you in their hardship programs? Basically what that is that they work out a payment plan with you with a fixed monthly payment, sort of like a personal loan. You have try to avoid BK by all means because it will haunt you for 10 years.

Also, have you tried reducing your bills or adding another source of income that allows you to pay your debt off within the next few years?

Things just haven't gotten much better, and I am planning on moving back home to Florida to be closer to my family. At this point, I have come to terms with the fact that I’m probably going to have to file for bankruptcy.

However, after reading this article, I really want to think this through and find out how to get the best “deal” (as much of a deal as you can get from going bankrupt..).

I am planning on taking the article’s advice and consulting with my California lawyer, but thought I could try to get some other opinions first, especially since I won’t be able to consult a Florida lawyer until after I make the move.

Which state’s bankruptcy laws are more favorable, California or Florida? And if Florida, any locals know of a trustworthy Tampa Bay attorneys I can consult with?