My fiancee owes 17,000 in credit card debt and is thinking about filing BK7. She also owes 12,000 on a car loan. She makes $10/hr at Best Buy customer service desk. One credit card is maxed out at 9800 and the other ranges in sizes from 1000 to 4500. Her best friend in high school (her same age, he is 21 also) filed BK7 in 2002 and said that it was the best thing he had ever done. He said two months after the BK he was approved for a secured card, and now, two years later he has been approved for a home loan, and has a $20k car loan at 4.7%, not to mention 3 credit cards that he manages much better now that he learned his lesson. Soo, she is seriously considering it and we are going to see any attorney this week, we just have some questions. 1. She doesn't want to file on her car because she wants to sell it to get a cheaper one. 2. One of her loans is a secured for $3,000, and the collateral is her laptop and some other items she doesn't want to lose, can this also be excluded from the BK. 3. Her friend advised her that she should go ahead and max out all of her cards and then stop paying on them to get the process started, that is what his attorney advised him when he first consulted with his attorney. EDIT: Forgot, she also owes about $1,000 on a school loan. And, she wants to start going back to school so she can eventually find some work that pays enough to support her means =) Will filing BK affect getting a school loan?
You must list all of your assets / liabilities on your BK paperwork. You can of course reaffirm the debt with the car loan. However, what can she get by selling the car? will it pay off the loan? probably not She can reaffirm the debt if the creditor agrees to it *Technically* maxing out your cards with the intent of declaring BK is considered fraud and will be looked at carefully by the trustee, especially if the charges are not for necessities or for vacations, etc! Student loans are not dischargeable in BK, however a BK will not prevent her from getting additional loans, as long as she is current with payments on the existing loan
So, let me get this straight. Your fiancee runs up $17000 in credit card debt and just doesn't want to pay it? After all, those idiot credit card companies were dumb enough to give her credit in the first place. Not to get moralistic here, but what gives? Do what you want, but I'd be real careful with what cards she gets in the future. I'd keep my accounts totally separate, or you'll just be doing this again in another 3 years. People who think like this give debtors a bad name.
Re: Re: Re: My 21 year old fiancee owes 17k Thanks, pd11604. I love learning new things. I was being a little facetious, since that is all it took her to get into that state in the first place.
Re: Re: Re: My 21 year old fiancee owes 17k RichC, no offense taken. She has ethics, so the answer is "no" she is not doing this because she doesn't want to pay back her debt. Making $10/hr part time, it has now become nearly impossible to make the minimum payments on her car payment, car insurance, and 17,000 worth of credit cards. Her accounts are just now starting to snow ball into being a couple months behind, and it will eventually get to the point where they will be asking for amounts which would be impossible to pay. Before it gets to that point... before the 30/60/90 days late payments starting showing up on her credit, she was advised by her friend to file now before her credit is hurt more than it needs to be.... basically file BK before any of the accounts write off. Your thoughts?
Re: Re: Re: My 21 year old fiancee owes 17k 1) Do NOT max out cards. This will throw up red flags everywhere and she will be subject to a Fraud Investigation. Very Bad. Anything you put on the card six months prior to filing will be looked at. 2) If a creditor shows up to her court date, they may ask for, and get, their stuff back and/or any collateral. 3) You could reaffirm and get to keep the car. 4) BK is a great tool to help out those who are over their heads. I'm not going on a soapbox here but she did know what she was doing as she was charging up those cards and looking at the balances every month knowing she was getting deeper and deeper in debt with no end in sight. I would not marry into any of that debt. I would get her to clean up (or file) and have it all completed (discharged) before you get married. Believe me. Once you marry her debt is now your debt. I know you love her, yadda yadda yadda but credit is a very serious business. Good luck.
Re: Re: Re: My 21 year old fiancee owes 17k 10 years man . its a long time 31 years+ old lady the stench of bad credit may be worth paying it off. get a 2nd job or something. 4 years of hard work is way better than 7-10 years of bad credit!
Re: Re: Re: Re: My 21 year old fiancee owes 17k indeed we got from children to parents with houses and cars and big jobs (a BK on file can lose you a nice job!) in those many years. ask me how i know. i've done the 7 year+ stretch. it sux, and i still get haunted by some old ghosts..
Re: Re: Re: Re: My 21 year old fiancee owes 17k I agree with broncsboi and sam. She needs to get another job. Either a better, full time job or another part time job. Even working at 7-11 or McDonalds. And EVERY PENNY of that money goes to paying off bills. Not one cent for sodas, movies, or anything. In fact, anything that she can cut back (taking lunch instead of buying, cancel the cable, etc) she should cut back, and pay that money on her debts. Besides the fact that she won't have a BK hanging over her for the rest of her life (yes, for some things it can be reported FOREVER), she will learn a very valuable lesson by having to work extra to pay the bills off. Or I hope she will, anyway. She'll learn to think twice before buying things she can't afford. I also agree that you should seriously think about whether or not she should be your fiance. If you make it a condition that she get out of debt first, that may also be an incentive.
Re: Re: Re: Re: My 21 year old fiancee owes 17k One other thing.... If you want to help her, do it by working the process for her. Make a list of all her accounts, their balances, their interest rates and contact phone numbers. People hate dealing directly with this stuf...makes us all feel guilty, ashamed, etc. So YOU can start calling them, particularly the ones with large balances and tell them the predicament. Ask them to work with you to lower the payments. Do NOT have them close accounts! By doing this, you'd be surprised what you can negotiate with vendors. You might be able to get the minimum payments down so far on most of them that you can then gang up on them one at a time with extra money. And I agree...I don't buy it. There ARE things you can do with little or no formal training that make you more than $10 an hour. College is a long term strategy (and a good one) but NOT a tactical one. She needs to take control of this and figure out an interim step for her life UNTIL her college stuff pays off. In my experience, both personal and with friends, is that if people don't repay or work this problem at ALL before they BK, they will not have learned the lesson and will fall into the same trap again. The shame and embarrasement she feels NOW, while contemplating it will fade. And at that age, things like credit, credit ratings, FICO scores, etc are all abstract things. aiki
