New Poster... Bankruptcy Dilemma

Discussion in 'Credit Talk' started by lsmith, Jun 27, 2001.

  1. lsmith

    lsmith Member

    Hello Everyone - I have been peeking in from time to time and was pursuaded to post.

    My husbandand I filed Chapter 11 2 years ago. We have no credit cards and everything was included in the bankruptcy. However, we have hopes of selling our house and buying a new one, within a year. Is this a wise idea or should we wait until it's over. I really don't know what type of situation we've gotten ourselves into. At the time we were having a lot of problems and this seemed to be the last result (as I guess it always seems). How will the BK reflect on our credit?

    What would be other consequences of dismissing the BK besides having to pay the creditors? ANY information would help whether related to the previous questions or simply my needing to know.

  2. on the go

    on the go Well-Known Member

    I believe it is best to try to avoid bk. I did a ch. 7 6yrs. ago and even though I have been able to reestablish myself that bk. will still be there for 4 more years. It dose hurt your score..... There is life after bk. but its not easy and slow. I would recommend settling and nego. your debt with creditors and once you have settled your situation I would work on credit repair to fix any neg. that may have been made.
  3. lsmith

    lsmith Member

    Thanks for the suggestion. This has been a pretty long road already.
  4. breeze

    breeze Well-Known Member

    I disagree. You have already done all the damage that can be done. bk is bk.

    Can you change it to ch 7? I have been there also. It is easier to come back from ch 7 than it is to spend all that time paying off the debt and still have them reported as settled, written off, etc. in many cases for 7 more years. With ch 7, you file and it is over, You can begin to rebuild immediately.

    All bankruptcies stay on your CR for 10 yrs. and they are actually on the "public record" forever, if anyone wants to go check, they will see it 20 years later.

    Filing and then changing your mind (as you are suggesting) doesn't necessarily take the record of the filing away, either. There are people posting on this board now, frustrated because just that situation is being reported on their CR.

    I don't advocate people not paying their debts, but since you are already there, get the remedy!

    It's like this IMHO: there is medicine to cure your "ills", but instead of taking all the medicine and getting cured, you just took enough to make you sicker, longer.

  5. lmckenzie

    lmckenzie Well-Known Member

    So are you saying that you can reverse a Chapter 13, to a Chapter 7 ?

  6. breeze

    breeze Well-Known Member

    I don't knw - have to ask a lawyer. Thee are plenty on this board <VBG> somebody will post an answer, I'm sure. Or you can conslut with the lawyer who is handling your case.

    But if you can change it, I certainly would.

  7. lsmith

    lsmith Member

    Well, I guess that might be something to consider.
    Is there someone out there (a lawyer or someone who has reveresed from Chap. 11 to 7) that knows the answer?

    I guess my only fear (11 or 7) is that my credit is now so messed up that we will not be able to obtain anything else because of the BK (unless we pay out of the butt). Of course when we did BK we weren't even thinking about trying to obtain anything in the future, just getting out of an awful situation.

    This situation is showing me that money means nothing w/o credit to go along w/it (that's deep). I could probably look at the bright side (yeah right) and say that I'll only be 35 when it comes off, but that's a long time. WHAT HAVE WE DONE!!!!????
  8. lsmith

    lsmith Member

    Breeze - How is it easier to come back from chap 7? In chap 7, you run the risk of having your house foreclosed or car repossessed. Or could you exclude the house and car from chap 7?
  9. breeze

    breeze Well-Known Member

    You can claim the "homestead exemption" if you have never filed for bk before - that excludes the house and your personal belongings. You can keep the car by reaffirming with the creditor.

  10. G. Fisher

    G. Fisher Banned

    You have a Chapter 13 personal bankruptcy, not a Chapter 11 business reorganization of debt, right?

    If so, see HUD handbook 4155.1 about credit qualifications for FHA loans. You're eligible, right now, for an FHA loan-- and the lender can still make a buck without raising the rate.

    Why are you considering the conversion to Chapter 7? You're probably paying 10 cents on the dollar for your debt through the 13-- is that overwhelming you?
  11. amaineman

    amaineman Well-Known Member

    A lawyer can petition that Chapter 13 is amended to Chapter 7, this keeps the original filing date.

    I know someone who filed Chapter 13 in 1991 it was amended in 1996 to Chapter 7 and will disappear from the credit reports by the end of this year (tenth year).
  12. KristyW

    KristyW Well-Known Member

    Hire a lawyer for exact advice as every state is different, but yes, you can convert a 13 to a 7. They both may show up.

    As for your assets, you can protect upto $100K in your home equity in most states, and if you need the car to work and without it you will be in hardship, typically they will let you keep the car if you don't have an outrageous amount of equity in it.

    Again, you need to consult a lawyer.

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