I've been lurking for the past few months and I was just curious. What would be better choice creditwise for a person: Declaring bankruptcy and getting a fresh start without having to deal with creditors or collection agencies OR Just stop paying bills, be put on someone else's card as an AU, lie low for seven years and stop answering the phone. If you just stopped making payments and went into collections, how difficult would it be in the future (say a year or two, to rent an apartment or purchase a new car). Would it be possible for creditors to garnish your wages or file a lawsuit? Sam
Or if you've declared bankruptcy, but the 341 meeting is still a month away, would it better to dismiss the bk and just walk away. Guess I'm trying to find out what's the lesser of the two evils. Unfortunately, I was turned down by the local CCCS and I don't have enough money to make debt negotiation worthwhile
1. The stress of having to live on the down low, and being afraid of the telephone and mailbox would be too much for me. Been there and done that; I hated feeling like a prisoner in my own home. At least with BK, your protected from harrassing calls/letters. 2. As far as new credit, it will be tough, and even if you get new credit, those collection accounts will keep getting sold to new collectors, and reported by new collectors - so your credit reports will take repeated hits. At least with BK, the damage is done once, like a nuclear bomb, but at least it hits once. 3. Yes, they can file a judgement against you, and if they are nasty (equal Sears, and Discover, evidently) they will garnish your wages. BK is there to protect you from involuntary payments. BK is very tough, but if there is just no way a person can pay back their debts in a reasonable time, then I'd do BK 7. It's legal and protects your assets and peace of mind. The only negative about BK is that it is a public record that you will always have to admit to when asked "have you ever filed BK?". It will never go away.
You can be sued and your wages can be garnished. There are couple of threads dealing with this subject today. Of course, this assumes you live in a state that allows garnishment. As to cancelling a 341 hearing-DON'T. The creditors will be turned loose again and if the truste feels your petion was frivioulous, they can deny you the right to refile. In any event, you could not refile for 180 days and the creditors could have their way with you and you would not have any protection from the bankruptcy court. If you do choose bk, play it straight up. Do not p*** off a trustee.
I just declared Bk and while it had been suggested that I just stop paying my bills and then dispute the accounts in a couple of years, I just couldn't stomach the idea of hiding from creditors for the next seven years or trying to dispute the accounts as being wrong. I honestly don't know what's worse creditwise, bankruptcy or collections/chargeoffs, but at least I can sleep at night now. I know I will get a chance to rebuild my credit and someday buy a home. I will have to answer "Yes" if I'm ever asked if I've declared bankruptcy, but on the list of things to be called in this world...murderer, rapist, child molester, Nazi, etc....being called deadbeat ain't bad.
If you want to buy a house, file Chapter 7. If you show you can use credit wisely after a BK, you will be eligible for a FHA loan two years after a discharge. But you have to follow the advice on these board about how to rebuild your credit. Forget a house as long as there are unpaid chargeoffs on your credit reports. Plus, the stress of dealing with collection agencies for years is a killer. Even now I am scared every time the phone rings.
I have 20000 with Capital One, 5000 with Aria and 10000 with MBNA plus a car loan. I was laid off earlier this year then suffered a heart attack. I'm now working at a job making 50% less than I was in January. I've exhausted all my savings and cleaned out my 401K trying to stay afloat. I'm running $1000 in the negative with little hope for improvement in my finances.
Even though I've read the posts for months, I never quite understood how you could dispute information that's true. If I owe $35,000, how can I dispute it and say it's not my debt. Also...even if I could dispute it, how would it appear on my CR and how would it affect my credit. It almost seems like bankruptcy and chargeoffs are viewed equally bad on a CR. I didn't realize until recently that using CCCS is considered only one step above BK. Thank God the local CCCS turned me down and suggested I talk to a bankruptcy lawyer
my husband wanted to file because he had 2 repo's and several credit card charge off's. i had been reading the posts here for months and was doing my damndest to keep him from going through with it because i refused to file, in az this meant when he filed i'd get stuck with his debt and be forced to file with him. one night i got him to sit down and read here. i asked him to just spent 15 mins but he was here for over an hour. that night i bought all 3 credit reports for us online and when we actually saw it on paper it wasnt all that horrific. in 2 months i have gotten rid of 1 of his repos and 2 credit accounts. his scores were in the low 400's and now they are all in the 590's. in the last 2 weeks i have had cap 1 removed off his reports(he was au on my defaulted card) with no problem. my scores are all in the 490 range (gasp!) but last week i had 15 inquiries and 2 gulf state's removed! while my scores are so low i still have gotten 3 unsecured and 2 secured credit cards and a 500.00 loc from (don't laugh) cross country. i guess what i am trying to get at is that if i had not gotten him to sit here and read these posts he would have forced me into bankruptcy but he saw enough to convince him to let me give it a try the creditneter's way so to speak and so far its slow going but well worth it. we lost 350.00 to the lawyer and so far this way hasnt cost us a dime.(except printer ink, i'm out) i have 4 friends who filed and only 1 of them is truely happy he did. sorry to ramble, kelly (BTW he started out 31,000 in debt 2 mos later credit report lists 5889.00 still owed. me 40000 3 mos later still 29000. OUCH)
EXACTLY! you should see me now, i am losing my p/t job sometime in january our stores filed bankruptcy again and i am already putting away my payments in case i can't find another job right away! my sister calls me a freak but i see that 492 score and i tell her I WILL HAVE MY PT CRUISER for X_MAS 2002!
Right before I filed... Creditors were on my hard. They would call me at work, at home on my (new) unlisted number, it was crazy. Someone also slipped in a judgement before I made the decision to file too. I tried hard to pay off creditors (after two major accidents) but I was robbing peter to pay paul and it wasn't working for me. Phone calls can get quite embarrassing too. I agree with MARCI ch 7 was the big Kaboom. I had so much of my salary then it was like being rich! Buying stuff cash was quite adequate the first couple of years. Traveling without a CC was my biggest problem. Lizards plan sounds great but even if I'd known about it at that time, it sure takes staying on-top of things close. Most applications ask have you filed in the last 10 years. If it didn't I'd lie.
I had "just" one fouled up account, Citibank, and I will tell you that those sobs can make life a living hell with the barrage of telephone calls. You've got a date over, and the phone ringing, not answering, answering machine, reluctant to answer phone, (caller id in infancy). That was just ONE messed up account. How many different organizations could come after you? I still don't think I'd choose the BK option, but yet you hear about people who have an easier time of getting Credit Cards then us paid charge off schmucks..
Hey Lizard I read your post in haste then went back and edited mine. You responded quickly. I see your point about the $ and work it involves to collect. I don't doubt your method I just think it takes a special kind of person to stay with it and not get bogged down by the collectors.
We were where you are back in 1997. I'm glad now that I didn't declare BK. What we had to do then was learn to go without any credit to live on. We had to track our spending daily and learn to set up a spending plan at the beginning of each month which INCLUDED things like haircuts, clothes, shoes, prescriptions, doctor and vet visits, etc This way we learned to stop using credit to live on. Having said that, we started with $22,000 in unsecured debt. Today we have paid back all but just shy of $9,000 of that debt. I finally had the guts to pull our credit report a few months ago and was shocked that the people that I've been so religious about paying are continuing to trash our credit (almost five years later). That's when I came to his board. One of our three charge-offs has continued to sell/assign our account and then each time call it a new account, with a different account number and a $1.00 different account balance. I'm getting educated through this board and others, and am starting to fight to repair our credit (with help). Having said that, I STILL am glad that we didn't declare BK. If we had, we would have to have that on our report for another 5 years. This way, at least we have a pretty good hope of getting this off of our credit. Things that I would do differently if I knew then what I know now: 1. I would never EVER have spoken with a creditor over the phone. 2. I would never EVER have paid them a red cent until I had an agreement in writing from them. 3. I wouldn't have been so afraid of going to court. Two of our 17 creditors did take us to court and we ended up having to pay LESS per month than I had previously offered. Elanonuevo
What about the tax implications?? Don't they send you a 1099 on the charged off accounts, irrespective of the deletions? Then you would have to deal with the IRS, that would be a real nightmare, since they have no "rules", plus they can take years to hit you. In a BK 7, there are no 1099's.
Well, I got hit with medical problems lost a year of work ect., and all my great Platinum credit melted down and wasn't worth the plastic it was printed on.LOL All I could hear was the old Tony Robbins story in my head " I went from Wonder Boy to... boy..I was living in a 400 sq. foot bachalor apt. hiding out from my creditors and doing dishes in the bathtub" So thats about what I did. I waited 3 years in my ignorance and just recently found this board. I think Lizardkings plan is the best.. 7 years in hell is too much..3 years is too much...get it over with. Hey anyone wanna make an infromercial with me?
I fully agree with you one million percent.. If I get free of these chains I will keep so clean.... I won't even jack up my cards to buy put options on the S&P. Honest!
Just Walk Away! Read this story. Look under "Interesting Story ( A must Read). Get a: Mail Drop Box Change Your Phone Number And Do Not Accept Certified Mail Get Added as a Joint or AU on Family Members Accounts. Then after about 9 months start disputing. BK is not the answer. Its a bigger problem.
First of all, what kind of credit or we talking about? Secured or Unsecured? If it is secured and I had any equity built up I might negotiate or file BK, but if you dont have either and you could just walk away, that is the easiest thing to do in my opinion. For most it would be very scary if they didnt have the information available to them that we all do on this board. As far as Lizard Kings plan goes, it is definately a winner if you can get it to go in your favor. It could also backfire on you and cause you delays. No plan is foolproof and either way there are some risks involved. You will always have skip tracers out there who will find you, if you gave them any pertinant information in your credit application that could lead them to you. If you didnt give them any info that they could use, you will probably never be found if you follow Lizard Kings plan. The point here is that no matter what plan you follow, all that matters is that it works with some type of expediency, otherwise you may have been better off filing the BK. Some folks get the job done in 6 months, others in 2 or 3 years. Either way it is a whole lot shorter than 7 years of credit hell and a constant public reminder on you records. A lot of it depends on the type of creditors we are talking about and how much the debts are for. THe bigger the debt the more likely they will pursue you. The validation process may come in real handy for you depending on what type of debt you are dealing with.... Good Luck!!
Nothing that that $3.45 for a certified Cease and Desist on the phone calls letter wouldn't solve. Plus after the SOL for the debt is passed most collection accounts just simply languish at some second tier collection agency in their dead-beat files See answer one. Just a blatant falsehood Marci. Most if not all the states have a Head of household protection from garnishment. Plus you have the right to contest the Writ of Garnishment in court. Most judgements are invalid on their face. Wrong or no affidavits filed, attorney lumped their fee in judgment. A myriad of mistakes. Are you a lawyer? Not meaning to start a flame war but. But since your facts on most of your points are wrong, stick to cleaning up your own credit Gish a perfect four for four WRONG. BK go away at 10 years. It's in the FCRA. Read it...please
