Hello, I was hoping to get an informed opinion or two on a question that I have. I imagine that this has been asked before, and if anyone has any suggested reading or can point me in another direction, I sure would appreciate it. I am currently 90 days late on all of my credit accounts, which included a Bank of America credit card with a balance of $9800, a WaMu card at $2300, and an acct owned by GM Money at $850. I'm also equally late on my student loans, my cell phone has been shut off, and my truck has broken (no better time for a head gasket problem, eh?). Last April I had a credit score of 726, after working for two plus years at being a good, responsible consumer. I was proud of the score, but I lost my job this past October, and have been incredibly discouraged trying to find another one. My question is, at what point should I seriously consider filing for bankruptcy? The notion of this was absurd just a few months ago, but now the collection letters are coming in at a feverish pace, and I feel utterly helpless. I have no idea when I am going to find ANY employment at all, much less something suitable. Without doubt, I would strongly prefer NOT to file BK. But what is the best course of action at this point? If we assume that I find employment, and can become current in April or May, what is the damage going to be? I understand that my score is probably in the mid 500s or so now. I'm just looking for advice on anyone that has gone through a similar situation, or has any experience here. I am obviously looking for the best long term solution, and to be as credit worthy as possible at various points in the future. Many thanks in advance for any words of wisdom. Jeff
bankruptcy advice my situation is something similar to yours however i have maintained all my credit cards till ,well, they started calling and i thought damn, i paid them,and i realized the stress of this whole income loss, loan modifications, friends and money owed, that i had forgotten, and i am so tight on money, so yesterday someone from bank of america called, i have three accounts with them totally over 30,000 . she was very nice, she said, well you are delinquent on your account, i stayed nice, but said so what happends now. well she said well, they have raised your interest rate from 18% to 28%and yyou new min payment is now 1200 instead of 540,,,,,,,,, god, i was like thats it, I am throwing in the towel, i joked and said to her, didnt they just get all that bail out money, does not seem to make much sense , i cannot pay the 540 on time and so they raise my payment?? she laughed and agreed and said i could do a program on each one, where they drop the rate to 5% and my min will be iin the 200 range, i said whats the catch, she said none really, you just close the account, later you can probably get back on your feet and get one reopened............. so, thats what i plan to do
Much of bankruptcy planning hinges on the income side of the equation and the prospects for income over the plan period. Defensive bankruptcy is a way of getting the creditors to negotiate to a plan that can meet their needs for satisfaction that is within your means to fund the plan. You must look at the asset side as well as the liability side,
I happen to be a firm believer in bankruptcy - the legal way of getting out of debt when hard times warrant it.
Sounds like excellent advice to me. Now all you have to do to resolve the problem for the one who is probably the world's largest debtor is to write to your old Uncle Sammy and tell hm that he needs to file bankruptcy for the 5th time. He has already done that 4 times and is now well past the verge of needing to do it again. I'm sure you and most of the rest of us have heard the age old phrase, NOT WORTH A CONTINENTAL DAM*. That phrase originated the first time Old Sammy filed bankruptcy under the old Continental Congress and the dollar became so worthless that nobody would take them any more. BTW, there were 16 U.S. Presidents before George Washington. George Washington became the first president of the new United States of America. We then went on the gold standard where a dollar could be exchanged for an amount of gold equal to the fair market value of gold at any given time. That continued until FDR filed Bankruptcy by defining the value of gold to be $32 an ounce and making it illegal for Americans to own gold. That meant that Americans could no longer redeem dollars in gold. We then went on the silver standard and continued on the silver standard whereby Americans could redeem their dollars in silver coin. Then old Sammy defaulted on that standard and once again filed BK by denying us the right to get anything of value for our Dollars other than more of the same. We lost the silver certificates and went to our present Federal Reserve Notes. Now Uncle Sammy is in deep trouble yet once again. He now has to borrow so much money from foreign sources that his indebtedness will require him to attempt to borrow another unknown sum of money quite possibly reaching as much as 1 to 3 trillion dollars from other countries such as China and they are not reacting too favorably to that idea at all. Now then, in order to cut to the chase and make a really, really long post as short as possible, here is the results we can look forward to in the very near future. And now, as we put the first month of 2009 behind us, we are nearing Washington's great day of reckoning. On the not-too-distant horizon, we can already begin to see ... * The end of Washington's futile attempts to stop the explosive collapse of the U.S. economy and stock market ... * The end of the slow-motion disintegration we've seen in corporate earnings, stocks and bonds, plus ... * The end of the slow, incremental rise in unemployment. And just beyond that horizon, don't be surprised to see ... * A massive collapse in the economy and stock market, triggering a tidal wave of bankruptcies, despair and even homelessness ... * A massive, global cleansing of the debt that caused this crisis ... * And, provided we avoid some major pitfalls, the first step toward rebuilding the foundations upon which our economy can grow for generations to come. Before Washington's day of reckoning, the American people think that government resources are abundant and even unlimited; after the day of reckoning, those resources suddenly become scarce, often non-existent. Before the day of reckoning, it's widely believed that the government has the power to prevent, end, delay or cushion this crisis; after, it's finally recognized that the government's actions merely deepen, aggravate and prolong the crisis. Before, the government remains committed to doing everything it can to fulfill the people's belief; after, it begins to abandon its rescue efforts, allowing the economy to fall on its own weight. Suddenly, government omnipotence is replaced by government impotence; generous largesse is replaced by miserly penny-pinching. And we will all be in the same handbasket and asking each other why we are there and where are we going.
Cap One, that's great. I hate the government also, but instead of hijacking the thread, do you have anything to contribute to my original question?
When is it time to file, 1.Over the limit fees exceeds the amount you charged. 2.When you know nobody will work with you like they promise they would. 3.When your family is not able to have a decent standard of living. 4.When you lay awake at night and try if different ways to get out of debt.5.When you go shoping and say Spam is not to bad. 6.Combine all these things and you know.
7. When creditors and their collection goons start hounding you. 8. When you see/hear in the news how banks are using the bailout funds purchasing million $ private jets and redocorating their executive offices. 9. When these executives pay themselves HUGE bonuses. 10. When these banks claim how "good" they are in/on commercials. At least there were no bank commercials during yesterday's Super Bowl.
You hate the government? That is unfortunate indeed. Government and man's ability to govern is one of the greatest accomplishments of mankind. Without it we would still be stumbling around in the dark ages. My post had nothing to do with hating government nor with hijacking your thread but an obviously wasted attempt to show the futility of bankruptcy. Bankruptcy has never cured anything for government because politicians obviously never learned the real lesson that their failures should have taught them. It didn't cure their problems but rather only caused more problems. Bankruptcy does not cure the problems of the man on the street either but in reality makes them worse. Bankruptcy does have it's place in the corporate world and does serve a useful function but not as a remedy for our past failure to make realistic financial decisions. There are far better remedies than bankruptcy but they do require that we learn how make sound decisions now and in the future. Bankruptcy is expensive and if we cannot pay our bills now then how can we hope to pay for bankruptcy? How can we realistically hope to cure our problems by borrowing money from the future to pay for expensive remedies of the past and thereby setting ourselves up for the next failure? If you have the money now to pay the costs of bankruptcy it would be better spent paying creditors. If we don't have the money to pay for the bankruptcy then we must either borrow from friends or relatives or do it on a pay as you go basis. Either way borrows from the future to pay for the bad decisions we made in the past. Another indication that bankruptcy is not the good remedy that so many seem to think that it is lies in the fact that President Obama has told us that the bankruptcy laws need serious revisions. We elected the man, why would we now fail to listen to his words? Bankruptcy is not the best remedy for government and it is not the best remedy for the common man either. The first step to financial solvency is learning to live within one's means whatever they may be. Borrowing from the future to pay for past mistakes is not living within one's means. Obama hasn't learned that and therefore will not cure the problems of government now or in the future but that is a topic for other discussions. Bankruptcy isn't the answer and those who think that it is have another hard lesson to learn or they have no such problems themselves but think it is the best remedy for those who do.
Cap one i don't believe you realize that some people have to file bk because of medical bill's of $500,000 to over a $1,000,000 dollars.Leave the gov out of this.You know a person will never pay off a medical bill like that in his lifetime,so why not.Some people don't approve of welfare but it's still there.We can send billons to Isreal,irag,and the rest of the world.But we can't improve our inner city or rural schools or feed our kids.That's a joke and you know it.This is country of the greedy,by the greedy,for the greedy.that's the problem,So sooner or later if we keep selling are job's overseas.The regular folk's will revolt,and carry these ceo's around on a stick or the hood of there car.Your posting's are much more thoughtful than mine and probaly make more sense than mine.God you can be so depressing!
CapOne, I WAS spending within my means (the 726 FICO??). And then the means were taken away from me. Yes, it was a lack of foresight and a lack of proper planning. I should have known that cash is king, and understood the value of saving for a rainy day (or, in this case, a rainy year). But I didn't. I made a grave mistake. Telling me about Obama and the government doesn't help in the slightest bit. I suspect that you enjoy hearing yourself type, and enjoy pontificating and sounding intellectual. But for people as dumb as me (who isn't sure that the entire world would agree that government is one of the best things mankind has ever done. Certainly not the people of Cuba, but I digress), can you offer any suggestions in plain, easy format for what you think would be the best course of action for me to take today and tomorrow? I understand you're opposed to bankruptcy. That's fine. So am I. But would do you offer instead?
The poster is talking about 3 or 4 cards with a total indebtedness of less than $13,000, not a million or even anywhere close to half a million. It will end up costing him about $2,000 or more and that could end up being in addition to having to pay the full amount owed plus the costs over the course of a few years. If he has to pay the full amount plus costs over say 5 years that would amount to an average of $250 per month. If he could have paid that amount per month he would not be in the position he is in now. He says that he cannot even afford a head gasket for his truck. A head gasket for most trucks will cost very little, probably less than $20. Throw in the cost of renting a torque wrench and an owner's manual and the truck will be running for $50 or less. No mechanic needed. I've changed a few of those in my lifetime so I know. If he don't know how to do it the owner's manual will give him step by step instructions. If he can't come up with $50 out of an unemployment check or two then how is he going to pay for a bankruptcy? That's what's depressing. He is only 90 days out and already wanting to run to the protection of the courts and get himself in worse trouble than he is now? That's depressing too. It is going to be a year or more before anybody is likely to sue him or do anything more than try to jawbone him to death so he has lots of time to either find employment or use that truck to earn extra money yet he is more worried about how to use the courts to get out of his predicament than he is in getting his truck back on the road and learning how to be productive again? Now that is really depressing. Instead of trying to advise him how to fix his credit or how to file bankruptcy to beat his creditors we should be teaching about ways to make interim money until he can get back to work. I don't mean teaching about or referring him to some dumb get rich quick scheme either. There are always day labor jobs that one can do. Cut lawns, do home repairs, paint houses, wash windows for stores and homes, lots of practical things one can do. Add some things like that to an unemployment or a welfare check, food stamps and what have you and he just might be able to get himself out of trouble and on the way to a sound financial future instead of wrecking that future with bankruptcy. Now how depressing is that?
Haven't been living in the real world of late have you? Cut lawns - its winter Paint houses - its winter wash windows for stores - the ones that are also struggling in this economy? wash windows for homes - the ones in foreclosure? Day labor - Have you seen the lines at the pick up points of late? Yeah right. unemployment/welfare/food stamps - assume he finds these side jobs - I'm sure there are some out there - he is either honest and reports the income, and loses out on the other benefits, or he cheats the gov't...given your distaste for filing for legal protection for the creditors, I assume you don't know how the "dole" works, or you wouldn't suggest it. Do you really know how much unemployment pays? The max in TX is less than $350 per week AND you have to pay taxes on it. About the only place you might can get a job around here is AT the unemployment office. They have had to hire on more CS reps because they are so busy. OP - To give you seem real food for thought. You really don't want to file BK until AFTER you get a job, and then only if you still need to. Why? After the filing date, you cannot add debt to the BK, so if you become sick or injured, or someone in your family does, and you are still unemployed, you have little recourse for those bills, or any others you might accrue while trying to get back on your feet. Wait. Even if you are sued, and you have to file, you can discharge a judgment just as well as a debt. You have to have an accessible phone right now in case of a job opportunity - you might consider one of those throw away cell phones, and only give the number to job prospects - just make sure it doesn't run out of minutes! Then you can ignore your other phone.
It may be winter in the greater part of the U.S. but in many parts people are now dethatching their lawns and even planting gardens or preparing to do so. It isn't winter everywhere and if it is where the poster lives then there is scooping snow and helping people out of snowdrifts with that truck. Once again, it isn't too cold to paint in many parts of the country. People also paint rooms inside their homes too. Painters also do commercial painting all year around as new stores and shopping centers are being built. New homes are also painting all year around Even though the economy is bad, the percentage of businesses that are failing is very small compared to the number who are still making good profits in spite of the economy. They have been in business for many, many years and have enough of a cushion to endure the storm. Despite all the bad news the economy isn't in the grave yard yet and only a small percentage of businesses are going under in most parts of the country. It isn't all doom and gloom. Despite all the howling about foreclosures, only about 6 percent of all homeowners are in foreclosure or even in trouble. Most homeowners are in a stable financial situation and not in the least bit of trouble. Again, that depends on where you are. If you live in Detroit or Flint Michigan or other city that is in a deep unemployment situation then yes, those lines will be long indeed. If you live in the average city they will not be much longer than they ever have been. In many cities, there is little indication of deepening poverty while in others the situation is indeed deplorable. So it depends on where the poster lives. I have a lady relative who works for the welfare department here. She talks about it quite a bit so I do have at least some idea about how it works. No, I don't know how much unemployment pays then because I had no idea that it paid even that much. OK, but why all the doom and gloom? We have no idea where the poster lives so we have no idea what he may or may not be able to do to improve his situation. Also you have given excellent reasons why he should not be worrying about filing bankruptcy just yet. Let's try to stay on the bright side instead of the doom and gloom side. There usually are other alternatives available if one thinks and uses some brainpower to try to come up with viable alternatives. Most people who are in deep financial trouble simply let worry beat them into despair and make unwise decisions based on fear and despair. That isn't good.
The quote for the repair of the head gasket for a 1994 Toyota 4Runner is $1800 and up. I'm not sure where you get your numbers from, but it's certainly not from any shop in the USA. I'll tell you what. If you can simply get an ESTIMATE from any decent shop within 100 miles of Portland, Oregon for less than $500, I'll personally give you $250. Your opinion on this matter, at the very least, borders on total irrelevancy. Also, for you to suggest that I am seeking advice on how to use the courts to avoid my payments strongly suggests that you didn't read my original post. Which would explain why you felt the need to give me a diatribe on government. In addition, my unemployment is $118 a week. My rent is $400 a month. And Portland's unemployment is now at 9% and climbing strongly. Again, all I asked for was advice on how to handle the situation. If you don't have something to add to that conversation, that's fine.
If they haven't gone to colledtions.You have a chance if you find a job.If you file before charge off your better off.I mean let's face it without a job your limited to what you can do.Final you have to do what's best for you.See a bk attorney a talk is cheap free.Good luck
No, the numbers I mentioned are not from any shop in the USA. The numbers I mentioned are approximately the cost of the head gasket, the tube of head gasket cement, rental of a torque wrench, and an owners manual to tell you how to take it apart, install the gasket and put it back together and that is all. That is also all any shop needs to get the work done. So at the very outside that $1800 shop would have a materials investment of less than $100.00. The other $1700 is for labor, overhead, and profit. I'd almost be willing to bet that you could buy a good used engine for that truck complete for less than $1800. Matter of fact I just Googled for an engine for that truck and got $1425 quote for such an engine complete. I'd also be willing to bet that if you really get down and hunt you could find a good complete engine for that truck for under $1,000. Changing out the engine can be done easily in a couple of days and with an unemployment rate the size of that you say is prevalent in your city I'd also be willing to bet you could find someone well qualified to change it out for about $250 to $300. I am well aware that you probably would not want to go to all that much trouble but the point I make is that $1800 to change that gasket is way out of line for what you can get it done for if you shop around and hunt for someone to do it that don't have all that overhead to pay. Bound to be a lot of good mechanics out there looking for any kind of work they can get. $1800 is just about half of what the whole vehicle is worth. I also saw some 1994 Toyota 4runners for sale for $3500 and up to $5,000 so $1800 is somewhat close to half of what the whole vehicle is worth therefore $1800 for a head gasket is way out of line. I know people who make more than that selling scrap metal they collect just driving around town and don't even have a truck to do it with.
Jlynn has some good advice. If you file now and then have more major expenses, you can't file again. Reread what she said--it may have gotten lost in this other discussion.
Please, let's do our best to keep the thread on topic and try to help warminghut, who has simply come here looking for some advice and guidance regarding his credit situation. @warminghut- Hedwig is right. Jylnn posted some good advice that's worth reading a second time. Where's Apex? Do you have some insight to add as well?
bankroupy no no hey warm, let me tell you i ve been there done that, would i do it again NO-WAY, its a pain in the ass to deal with. its all good when your with the lawyer paying him the 850 or more to file it and then go to court to file and all your deaths are wiped clean except the ones you exzempt like 1- car cause they take the 2nd one, and they take all secured deths..n e thing that has collederal.. they also take any 401 saveings, personel saveings, personel gold,silver, guns, coins, collectables, anythings worth valvue,,( that you say you have ). after court well you have no credit at all you cant even open a bank account for a while, and some banks will cancel your debit card. also car insurance? no-way unless you allready got it, then if they do a recap well they can cancel it also if they see fit to do! rent? that to they can denie you that also. light bill, water bills, gas bills ? them too can be a pain to get turn on for rent or a house. and the harrassment you get from people that know you file chapter 7 or 13? your name goes on a list through all the creditors and all 3 credit bueros, for 7 10 years.THAT IS A HELL OF A LONG TIME TO GO belive me i know! 3 years from now say your tuck goes to hell, you got few choices pay cash, borrow money from family, or pay a un-godly finince charge if you can find someone to lend you the money > with a co sign <. ITS A PAIN IN THE ASS. good thing is you have no deths true..you can rebuild your credit but it takes a long time to do.... i filed in 86 with a credit score like you of bout 740. makeing good money and lost my job due to cutbacks, went from a income liveing of 60 plus to 18. someone told me to file and i wouldn;t have anything to worry bout well WRONG... ITS JUST AS BAD AFTER TOO.. just got score up to 720 20 years later damm OK, look for these... work with all your creditors dont ignore them, call them ,write them, pleaed with them, tell them what has happen most will will with you if you try to work with them. they would rather get paid then write it off, tell them your income copy them a pay stub to show them income and how much you can pay them. talk to the mechanics at the dealers most will do the work at home for little of nuthing, half of it, case of beer, cut thier grass for a month something? hell i got a car fix by asking the dealer to wash cars on the lot sunday while they were closed for a month. just took waterhose and rinse them off. hope this helps you as for a job, well cant tell you much, except going from a 20 dollor hr to 7 hr is hard to swallow but $7 hr is better than $0 an hr so you take it from there. also its easier to find jobs when you got one then not have one. talk to a lawyer, find someone local that has file in your area ask them the pros and cons remember a lawyer is only thier for money..AFTER HE GETS CREDITORS TO STOP CALLING AND FILES FOR YOU, AND ALL IS DONE! YOUR ON YOUR OWN GOOD LUCK hope this helps