Hello I have been considering chp7 bk and want to see if this is the way to go? My state of residence is Florida. I have 5 major accounts with $20,000 owed and no longer have a job. First charge-off was April with GMAC for $3,400. Account turned over to NCO Financial, I wrote letter disputing charge July 10. Received green RRR card back, no response from company. Bank of Am*rica owed approx 7k. 60 days past due, have received automated calls to contact them at 1-800 #. Have not responded. Citib*nk owed approx 5k, current on payments. MBN* owed 2k, current on payments. NextC*rd owed $3,200. Past due since Feb 2002. Sent cease & desist letter on March 10, 2002. Received green RRR card back, have not been contacted other than monthly statement since then. I have 7k in student loans, no mortgage and do not own a house. No motor vehicle as well. Living at home with parent and have returned to college full time. One bank account closed 6 months prior, none other than primary checking currently. No stocks or CD's owned. Own $150 in savings bonds and have $200 in cash on hand. Assets are much less than $1,000 protected limit in Florida. Now what do I do? I had been current on all but one bill and lost my job at the Postal Service (non-career status). Luckily I am at the age that I can move on from all my mistakes. Bankruptcy can be a damaging thing to credit for so long so maybe there is an alternative for me? Appreciate any input you can give, especially the senior members or someone who has delt with the creditors I have listed. Thank you. Robert
Are you working? How are you keeping current on the other accts? Yours is a tough question. If you will be able to keep up with what is current, and just have those 2 baddies, maybe some settlement could be worked out. If you anticipate not being able to keep current on the good accts and there is no prospect of settling the bad ones, then maybe a bk is a good idea. But, only an atty can properly advise you and I suggest you speak with one. Don't forget that the bk laws may be changing so if you are planning to bk, you should speak with an atty asap.
The worst that can happen is that all your creditors file for judgments. If you have no seizable assets, are not employed in a job where you are getting more than 40X the min. wage weekly,(garnishment exclusion) and do not plan to purchase a home or need credit in the next 7 years,then you might consider just letting the loans default. Although judgments are renewable for additional 5 year periods,you will at least be keeping your options open,and you would be able to keep current any store or low balance cc you now have, instead of having to declare them on BK.
Unfortunately I have no income so I won't be able to stay current on the two good accounts for long. If the debts are renewable every 5 years (remember I live in FL) then they could string it out for 20-30 years if the creditors wished to? I have read up on the bankruptcy laws and have been to atleast four attorneys. They say I am a great candidate for Chp7 BK. I hope to avoid doing that and thought there was an alternative. The employment situation around my part of FL is not particularly good. One thing I should note is I can go back to work at the Postal Service in a year if I wish to. That's not a maybe but a definite Robert
First off student loans are not allowed in chap 7...mine weren't in 91. You have to continue to pay them and can call them to get a financial hardship which will protect your credit on that account. You can get a financial hardship for 1 yr and that should be enough time to find a job. If I were you I would steer away from bankruptcy unless absolutely necessary. It affects your credit for 10 yrs, not 7 like a bad debt. If you are current on some accts. then I would stay current on them and work out arrangements with the ones you can't pay right now. Pay them what you can and honor the debt. It will help you in the long run. If you chap 7 them they are worse then attempting to pay them. Have you called CCCS (consumer credit counseling services)? They can set you on a budget but the important thing is to find a job, any job to pay what you can. My chap 7 fell off in 2001 and it took me a good 4 yrs to establish more credit. We bought a home and car and now we're ok but those 10 yrs hurt us alot. It's hard getting denied because of a bankruptcy....when that is the only reason they want to deny you. You kick yourself in the butt thinking how you screwed up. I am glad I learned from my mistakes and have had perfect credit since 91 but it's really a hard road so think about it alot. Good luck!
You can go to them to get a budget set up. You do not have to use their services! I told him to go to them for a budget....starting an acct with them is a whole nother story. It will affect your credit. But you know if it did at least it would be he's paying his debts instead of chp 7 and discharging them.
OK. maybe for a budget. But your comment at least he'd be paying his debts instead of bking, while the best situation, he'd be punished credit wise for paying his debts thru cccs.
But I would think lenders would look at you better if you at least make a conserted effort to pay your bills then the alternative-bankruptcy. Yeah, CCCS looks like bankruptcy but it isn't true bankruptcy and he'd be making payments. But if he has no job then he wouldn't qualify for CCCS anyways. What he need to do is find any type of job. There has got to be a Mcdonalds, Burger King, or something to that effect nearby him....grocery store? At least he'd have some money coming in while he's looking for the job he really wants. (unless of course he wants to work in fast food
I have not filed bk. I had a lot of bills and have attempted to pay them back, but guess what....???? there are people who file ch7 who have higher credit scores than I do! If you don't want to do a ch7, and it seem like you are conflicted ( 4 atty's), try communicating with the debtors and see what you can work out. It seems like the main barrier is your lack of employment... did you have credit insurance on any of the cards? i ask because sometimes people pay for it and then don't use it when hard times come. I doubt any creditor is going to work out a plan for you if you do not have a job... so you need to consider that first and foremost. If you decide to bk7, don't worry about it, you will survive it... just consider the lesson you learn from it and work hard to keep it from happening ever again!
I had excellent credit prior to suffering a job loss. Tried to keep up with bills and the creditors wouldn't give in at all. They wouldn't accept what I could realistically afford to pay. As for credit counseling, stay away from them. Even if you think its not the same thing as BK creditors will still look at you just like you did have a BK. The difference will be that you probably still will owe those creditors and if you had a BK you would owe a whopping ZERO! Look, I filed a chp 7 BK and before it was discharged I had all kinds of credit offers in the mail. Some were sub-prime but a few were just regular credit cards. My score after filing in May of this year is 595. I have just started working on my credit report and I bet in the next 6 months it will be in the low to mid 600's. People who go to credit counseling fair much worse than I did after filing BK. I'm not advising you to file a BK as that is your personal decision but just search the board and you will find a lot of information here to help guide you in your decision. If you decide to work with your creditors get everything in writing prior to making committments. You might find a job and be able to handle the payments since you are living with parents. Don't make a rushed decision. If you do find a job and you have some late payments on your report, start paying them back and then request a goodwill adjustment. There are a lot of alternatives for you just take your time and make the best decision for yourself.
Judgments are renewable for 5 year periods up to a total of 20 years, but it is an expensive and difficult proccess -an is probably only going to be used in BIG cases (over $10,000)- if none of your accounts are over 5-6 thou. they would likely not renew. However, if you are contemplating any PO job, you had better take a good look at the application before you decide one way or another.Many job applications PREFER BK to judgments
XHCX- As a paralegal who practiced bk law and a former regular here on CN I am considered by some members here as an expert on bk so I will give you my educated opinion. If I were you I would file a bk 7 ASAP as the laws will probably be changing after the Nov. elections. You will be able to discharge all of your debts except the student loans. The stigma of bk is now considered an old fashioned perspective as with all the layoffs in this economy and the threat of radical bk reform on the horizon the bk filings have increased exponentially. The bk 7 will remain on your credit report for 10 years but creditors know that you will not be able to file again for 6 yrs and are usually willing to extend credit based on your current income and debt load and disregard the past bk discharged debt (the years between bk filings will increase after bk reform). So I think it is a no brainer whether to try and stay under the radar from judgments that could be filed and renewed or to get these debts off your back in 4-6 months. The filing fee for a bk 7 is $200 and atty fees range from $600-$750 depending on your locale. So beg or borrow the money as it will be well spent. As for your student loans...these cannot be discharged in bk but if you are not working you can get a forbearance until you are gainfully employed again and then you can have them rehabbed through the dept. of education. If I were your counsel this would be my expert advice. Hope this helps. clc
You are a great candidate for BK....If it were me I'd file. There area lot of people here that have built good credit after BK a lot easier than paying everybody and still having bad credit. My mother filed and bought a house for 200k 2 years after filing and now has scores in the high 600's.
sassy- I certainly don't know what so "amazing" to you about it. It definitely changes the tone when you take sentences out of context. I backed up what I said with the relevant facts. I am posting here again as a result of many emails sent to me by CNers requesting my return as bk advice was needed. So if your reply is one of derision I have to tell you that you're in the minority here. I will not get into a flame thread over this as I have a hell of alot of more important things to do. clc
You're a good bk candidate. whether to file or not is up to you. If you're several years from graduating.. it may keep a lot of stress off you while you're concentrating on studying... judgments suck. collection agency calls are worse. I tried both avenues (paying then bking) and My only regret is all the time money and emotions I wasted trying to pay debts that I later bk'd... the lesson? decide and do... and do it quickly... if you can't keep up the payments then you're throwing good money after bad. what will it accomplish if you pay 2 more months of payments then bk? My best advice here is actually regarding the student loans. Regardless of the credit effects of being late... do NOT let your student loans go late or go into default... It's just too easy to keep them current. Unemployment deferral... hardship forbearance... in school deferral... all keep the account current and the deferrals will have no interest accrue on subsidized portions of your loans. The credit effect of default here isn't the issue.. the collection costs of student loans are NUTS... going up to 40%... I watched a friend's loans go from 12k to now over 38k in only a few years. Dumb dumb dumb... b/c it's just needless. Make certain to file the appropriate forms and keep the student loans current at all costs You may also wish to consolidate your loans if you have a bunch of different loans (lots of trade lines)... it's easier to keep up with... and when you consolidate... the number of forbearances and deferrals start over again so you can defer/ forbear your loans for quite a while legally by consolidating every few years. Interest rates have never been better... as for the rest... regardless of what you think about the credit cards... bking them isn't the end of the world.. amazingly enough... there is life with/without credit... and certainly after a bk... if you're going to do it.. do it now. After discharge, get 1 credit card or so.. Cap1 is a good choice. Keep it and after 24 mos of use your score will be reasonable. You can literally charge a pack of gum per month and pay it off.. and thus you put data into the model every month. You can then get a car/mortgage with 24 mos of clean history. and contrary to most info... 1-2 credit cards is all it takes to rebuild. It's that there needs to be info in the model that's new and clean... and that's easy to do good luck regardless of what you choose. You also don't need an atty... you can file the paperwork yourself and save 500+ dollars or use an atty if that makes it easier for you.
Wait!! Work it out. I have been originating mortgages for individuals who had or are in your situation and they regret that they had ever filed. It will handcuff you for a long time. Repair those lines as best you can by making the mininum payments, payment plans, consolidation etc.
i personally regret not filing bk..its been almost 10 years and I still have collection accounts im trying to get off of my report from way back when. even tho the 7 years has past on just about everything, there are still some collection agencies trying to get money out of me. its not worth the heartache and stress. I have a family now, my credit sucks. most people I know own a house and such. I can't even get the cruddy cookie cutter homes that unemployed folks get without them requesting a 50% down payment or whatever. if you are going to do it, do it now. don't put it off, the sooner you do it, the sooner the reporting period for it starts.
