Preparing for Bankruptcy -- LONG

Cynthia, just ignore those comments. Sometimes people get a little carried away. I and many others here are willing to help you. Have you send Bill Bauer any correspondance yet?

Another food for thought, get a pay bar, then you can get a little bit of money to surf the net, lol!

 

And those are good points...I respect your opinion. But.....

Are my rates prime? I am sure they are not. But, Most of my CC's are in the 11-15 range- that's not bad. Not to mention that those CC's now keep a little or no balance as opposed to the situation that I was in pre-BK.

As far as jobs....it has yet to come up in any situation in my job. I am currently a consultant with one of the top 5 technology consulting firms in the world. My focus is in security- many of the situations I am used for require either government security clearance (which I hold several of) or standard backround checks. I have worked in the White House, the Pentagon, for the NSA, the FBI, and during the first four months of this year with the SS. I have done work for 3 of the top 5 banking institutions in the country. I designed (a team of three) the backbone for the largest public school system in the country. Whether it be a project for the government, a financial institution, an educational system, etc, I have never once been questioned or turned down do to financial history. I don't see where that comes into place.

As far as lawyers, the one that 'guided' me through the process cost $400.00 total. I don't know if that is high, low, or whatever, but thats what it was. $200.00 when I signed on with him after his (free) analysis, $200.00 after my hearing. This included guiding me through the re-affermation letters and pointing me the way to credit post BK. (and I deducted the 400.00 on my tax return)

I do not know what one would consider 'Prime' here...I know the opinion differs..but in the past 3.5 years, to spell it all out, I have obtained.....

Ford Motor Credit- 99 Vehicle, New, 22,000.00, 1500.00 down, 8%

Ford Motor Credit- 95, Used (obviously), 10,000.00, 1000.00 down, 10% (not bad for a 95)

Mortgage (been sold 4 times, various lenders), 164,000.00 House, new, 8k down, 10% (high, but I did not 'have' to put ANY down). I am currently refinancing this loan for 6.5%. That's prime.

Amex- had before BK, they let me keep, doesn't count.

Providian Gold- 5500.00 11.x%
Get Smart Gold- 1000.00 16.x%
Capital One- 3500.00 13.x %
Capital One Gold- 1000.00 13.x%
Household- 500.00 19.x% (getting rid off)
Target -retail- 300.00

Before my BK, which was due to a medical mistake in college and not poor management on my part, ALL my income PLUS went to bills, interest, etc...I was making about 40k a year- with zero to show for it.

Because of my BK I was able to live again..with money to get more training, move to a better market, and get myself in a better position. I now have a six figure salary with practicaly zero liability and can live my life as a real person. I have savings to cover surprises that may come up. I invest almost 15% of my salary. I do not have to cross my fingers when I hand the clerk my charge card. I do not have to worry when the phone rings. I would not have had any of this if it was not for my BK.

Am I embarrassed about what I did? No. I did what I had to do to survive. Do I wish there was a better way? Sure. I did not want that to happen. I also did not want to spend more than three months in a hospital bed (four surgeries in my early 20's)because an emergency room doctor was having a bad day and failed to diganose my ruptured appendix.

Life can be bad- it's up to us to make the decisions we need to survive.

I do not advocate BK. It is bad. It puts a bad mark on your credit. Debtors do not get paid.

But, what's her alternative? She cannot pay her minimums. Consumer Counceling is WORSE than BK in my mind. From my experience the CCS mark is as bad as BK- without the benefits of owing nothing. It does not eliminate any pressure or stress. A part time job addded to the job she has now is not going to make a difference.

What if she was able to get a little more income? How long is it going to take, devoting 110% of her money, time, resources to the debt, to pay it off? 5 years? 6 years? 7 years?

Does the BK still look that bad?

I filed BK. I am still proud of who I am. I do good things in my community, I pay my taxes, I live a normal life.

I would not be able to say these things if I had not done that.

FWIW, my BK is only on 2 of my three credit reports. My scores (all three) are mid 600's. Again, it has only been 3.5 years.

My life WAS 'worse than I could imagine'. then I filed BK and started my life as a normal person again.

Please- this is not advice to file. DO everything you can not to file. BUT- filing is not that bad. It does not make you a bad person. There comes a time in everyones life when they have to take charge of their situation to survive.

If you file BK-

you will have to go through several interviews with your attorney, and you will be nervous...

you will have to go to a hearing, and you will be nervous...

but afterwards you WILL go home...

and the next day the sun WILL rise...

and from now on the collectors WILL NOT call...

and you will begin the rest of your life.


Shawn

 

While I don't know you, you really don't seem to fit my profile of a deadbeat. Deadbeats don't pay child support. Deadbeats have money, but don't pay their bills. That doesn't sound like you. Get that word out of your head.

There are people here who will help.

There are also people here with other opinions.

It's this combination...yin/yang....that makes this board what it is.

What you need to do is what you feel is right. We can tell you the consequenses, we canshare our experiences, but we can't tell you what to actually do.

Don't let anyone here 'Tell' you what to do. Use our opinions, good and bad, what you want to hear and what you don't want to hear, to make your decision. Do what you feel is right.

The most important part is that you fully understand everything about this experience, you learn from it, you grown from it.

As 'bad' as it is, BK was the 'best' thing that ever happened to me. I am a totally new person because of it. Because I have no more bills? No. Because I learned about myself and the world around me. I learned what really matters and obtained the character it takes to survive.

Do what is right....

Shawn

 

I agree with supershawn completely. Excellent advice and presented in a very thoughtful and caring way.

As for the original question, you should be aware that some banks my close your account whether it is included in the bk or not. I dont know which, though. If it was me, I'd go ahead and get an fcnb, orchard, capone, etc. and just see what happens. If they survive, great, if not oh well. Retail cards most likely will survive, so definitely get a macy's, robinsons may, whatever, cards before the bk.

 

Cynthia,

Was where you are now last year. What a mess that was! I did file Chapt. 7 last year. I had no choice but to file as my situation was similar to yours only add a home where the property taxes doubled on us to add to this lovely mess. What happened to me is I temporarily lost all my sight in 1999 (due to diabetes) and was off work for over four months. Went through several major eye surgeries (thank god for my husband's health insurance). Did not know for sure whether my sight would come back thus I did not know if I would ever drive again or possibly be able to do my job again. I did regain the sight in one eye and some back in the other, but for all intents and purposes am legally blind in that eye. I can drive and work (only part time now, though), but from the time off and the reduced schedule, the damage was done. Then when I came home from work one day last year to find that my property taxes had doubled causing my mortgage payment to increase $300, I knew I had reached the inevitable.

Did I just charge my bills up only to file BK? No. Did I want to file BK? No. I went through emotional stress prior to the BK and I went through some depression after the BK only because I lost my house and took that very hard. Am I better off a year later? Yes. Emotionally, I am much better and financially as well. It is not going to be an easy road to rebuild, but I am doing so. I would rather do without the credit, but the harsh reality is that you need credit to buy a car, a house, and rent a place to live among other things.

I also do not advocate bankruptcy, but there comes a point where it is impossible to crawl out otherwise and it sounds as though you are at that point. I cannot advise you on what to do, you can only make that decision. My heart is with you and I know fully what you are going through.

Where am I a year later? I am renting a nice apartment, financed a vehicle six months ago (my rate is not the best, but I hope to refinance), I did manage to keep some of my credit cards because I did not owe anything on them (most of what I ended up filing was secured debt), have 3 small secured installment loans, and have obtained four credit cards (two MC's and two Visa's). I have an unsecured FCNB, a secured CU Visa (my rate is 15%; not "prime", but not bad a year post BK), a Cap 1 Gold Visa (partially secured), and an unsecured K-Mart Gold MC (also a Cap 1 card). Of course my rates are not prime, but then again I don't carry high balances on them. Yes, there are cards that will cancel you after the BK even if you owe them nothing. Home Depot is one that will. Sears closed my account and then re-instated it after I asked them to review it. I too watch my money and how I spend it now because you just never know what might happen to you.

Good luck to you!

Shawn,

I agree with you totally and applaud all your comments. Your advise, I am sure was most helpful to Cynthia. Yes there is life after BK and credit hell! I especially liked you comments about the negativity in regards to the car loan (I was there myself). Everyone seems to think there is an easy solution to that one, but there really is not. If I didn't need the title to the car in order to sell it, pay the difference in installments, and avoid a repo, I would have done it in a heartbeat.

BTW, $400 in attorney's fees was a bargain compared to what is charged in my area. Yes, you can do payments do the attorney to file a BK. You did better than me! LOL

 

I've never filed bk myself but, I've 2 friends who have had to do so.
As far as subprime credit afterwards, it depends on how you handle yourself. With 2 years of perfect credit history after bk, you will qualify for FHA loans at a conventional rate. They are a pain to close but, the rates are conventional. One of my fiends was discharged in Aug. of 1999. In dec. of 2000 he bought a new car from Ford and got the .9% financing. Neither of then dealt with subprime credit cards or secured cards. They both have good jobs and one kept his home {the equity was just below what our states allows for exemption} Both of them went to small local banks with there w-2's and a bank officer arranged for them to get a mc with a $1000 cl.
I'd just say if you pay your bills and have a good job, you will be able to recover.

 

Cynthia:

was reading through the comments on this board, and thought I would throw my two cents in.

First, I think (almost) everyone here knows to some extent, perhaps w/different contributing factors, how you feel. Any judgemental statements should be taken as just that. You have far more to worry about than how you can control other than someone's emotional reaction to your situation.

Second, I think that objectivity is the key to getting above and beyond your present situation. By that, I mean you have to do what you have to do, and somewhere along the line you may have to do something that may not seem right-to you, to other posters, etc. But the answer lies in the context of what you are trying to accomplish-getting out of debt, and the truth to the matter is that the credit industry is not exactly fraught w/angels.

I know what it is like to wake up to a financial nightmare, to hate to answer the phone, to not realize how you are going to make ends meet. But the essential issue here is to stop-take time and use your objective reasoning to figure out how to make this work for you. Count on any solution taking a couple of years to see substantial results. That may be hard to swallow now, but in comparison to seven years of bad credit? Or more?

When I first acknowledged I was in over my head was when I was already behind on bills related to a health issue. Then I got a huge medical bill that wasn't expected, on top of everything else. When I admitted my predicament to myself, that's when I found among my support system this aversion to bankruptcy. All of my friends and family were just adamant that I reject it-but seeing the stories of that here, I can say that I wish I would've more seriously considerred it at that time.

Instead, I did the CCCS thing. I am really surprised no one else here has chimed in about this-although some do have success w/it, my experience w/ CCCS made a bad experience worse. They took my monthly payment, but then paid creditors late, or not at all. I actually had to quit the program in order to get ten months of payments dispersed to one of my creditors. And my reports were trashed more so than they were prior to CCCS-CCCS failed to mention that some creditors will list the account as late even though CCCS received my payments on time.

As for second jobs-be careful w/ that one as well-I tried that as well and it actually pushed me into a higher tax bracket, and I had to pay more taxes.

When I quit CCCS-I negotiataed payment terms w/ most of my creditors and am paying them back right now. I would avoid getting any more secured or unsecured cards now...MBNA was one of them-they are actually my lowest interest rate right now.

Your credit report will take a hit-either by letting one or more accounts charge off, or by voluntary re-po of your car. So, like I said, objectively decide which solution is best for you and take it from there. There are a lot of people on the board that can and will help you w/advice and suggestions.

Good luck.

 

Sean,

You sort of sound like you work for a cc company.

 

BK will stop collectors/bills as soon as it is filed. All accounts will show as 'included in bk'- unless you managed to keep them out of it somehow. Mine showed 'included in bk- $0 past due $0 due' even though the totals were over 20k.

I wouldn't try to get anything before you file- if you loose it in bk (they will know even if you try to keep it out), it will be harder to get after bk. There are several cards that are easy to get right after bk.

Another thing- and this is not advice to do this, just stating fact- disputing items right after bk, when all the smoke and paperwork is still in the air- works very well. I wish I knew more about it then.

Any money you send in now, if you are going to do BK, is just throwing good money after bad. It is going to do you no good. Nothing is going to be reported to you reports until at least 30 days after the due date. And no lates are going to show after the bk anyway.

I don't know how many things I sold, odd jobs I took, dinners I went without to 'hang on' a month or two longer before having to do bk. I practically killed myself fighting a losing battle.

Have you talked to a bk lawyer yet? You need to do that ASAP, even if you might not file later. Almost all have free consultations where they will look over the situation.

Shawn

 

Shawn:

I have no experience with any of this, but I just wanted to tell you how kind and thoughtful you seem to be. I was VERY impressed with your intelligent comments!

 

Once again, Shawn is right on the money! If your intention is to file, do not pay the bills, it is throwing good money after bad. My attorney put it that way exactly. Do not try to get any more credit until after the discharge. I think if I remember correctly one of the questions the trustee asks is if you made any large purchases on credit or opened any new accounts in the last 6 months (I think or something to that effect).

Also, correct about the dispute process right after BK. I cannot stress how important it is to get your credit report after the BK is discharged. You might be surprised to find out just how many of the creditors you included in your BK are reporting the accounts incorrectly. You can dispute through the CRA first and if these items still come back verified as mine did, go after the creditor directly. I have had success in doing this with two of the three that have reported my accounts included in BK with their respective companies incorrectly. I will know for sure within the next month or so how these accounts now report on my credit report. Disputing is a valuable tool when it comes to rebuilding.

CCS would not work with me because much of my debt was tied between our house, our second mortgage, and our two car loans (as I said, very little of my debt was credit card related). They couldn't negotiate the secured debt. So I too, did try to do the CCS thing.

Also, if you live in or near a large city, you can go and see several BK attorney's for a free consultation. They will go over your debts with you and explain the whole process. Then you will be able to get a better picture about this and be able to make a better determination at what will work for you.

 

A friend of mine went thru a bankruptcy 4 years ago and it was discharged 2 years after...he just bought a house $100,000 loan at 7.99% FHA loan. How in the hell can this happen. I have a Paid charge off thats 5 years old and a couple of late payments, unless you look at TU and then apparently I open credit cards and NEVER pay them, anyway, my hubby has a car payment that was never late and is now paid off, a PAID charge off and a bunch of PAID medical bills. Long story short all our 'delinquent' bills are paid and we can't finance GUM!

 

No I don't work for a cc company.....nor would I ever.

 

Sometimes I think this board is full of real simpletons who could care less about running up bills and then filing BK.......

 

Well, I have to say, I don't quite understand how someone with a 4 year old bankrupcy can buy a house and someone with PAID chargeoffs can't.

Could someone enlighten me here? Is this because of the absence of positive trade lines?

 

Sean-

In what post here did someone say anything positive about running up bills and filing BK?

On the contrary, I think the opposite was quite a few times.

BK is NOT a positive thing. It is NOT something to look forward to. BUT, it is a method of last resort for a lot of people.

You never know what situation you might find yourself in one day.

Shawn

 

Camove,

People on this board tend to be less then truthful. If these characters were honest they would fess up to the fact that they can't buy sh**, and are stuck in this land of subprime hell. They may be able to get a car financed for 24% APR, and have a $350 line of credit on a secured credit card with a 21% APR. The truth is they fuc*** up and are paying the price dearly. They like to see other people get into the same situation that they are in. Believe me Camove, BK is no bed of roses. As far as your charge-off, that pales in comparison to a BK. You can control the charge off by either disputng it with the CRA's or getting on a payment plan which you would request to have the charge off removed after it is paid. Best of luck to you and seriously think twice about the move to lala land.

Sean