I have a total of $20.8k in credit card and store card debts (if their figures are OK, which I don't assume), plus a university departmental debt (soon to be payable in monthly installments) of $9.5k, and a substantial Sallie Mae debt from over a decade in graduate school. I was unemployed for much of last summer, and have been doing temp work for $10/hour for much of this year. My credit cards are from American Express (Personal and Optima), AT&T Universal, Capital One, Discover Card, Wachovia, and Wells Fargo; and my store card is with Macy's. My last credit card payments were made in September, 2001. I am hoping to receive a Ph.D. diploma in coming weeks, and hope that eventually this will make possible a college professorship providing an incomeof overf $30 (maybe someday $40k). But in the meanwhile, my income is low while I'm job hunting. There's a possibility that a prep school might hire me, but I doubt it would pay as much as a college (but perhaps it might pay at the low end of college salaries). My Am Ex Optima account is in default, and my Am Ex Personal account has gone to a bill collector. My two Discover Cards have charged off, and Discover is threatening legal action if I don't meet their financial demands in a few days. Capital One is threatening legal action. Macy's is threatening further collection action. Wachovia's bill collector threatens that it's planning to make some kind of decision within days. Wells Fargo has made a final demand for payment prior to charge-off, and has threatened legal action. I don't have the funds to pay off these creditors. And I don't have a stable income, so I'm not in a position to enter into an agreement to pay a certain amount per month for a period of years. Up to this point, I have not filed Chapter 7, with the thought in mind that I don't know for sure that any of the creditors will take legal action against me, and that even if one or more did, it's possible that legal proceedings could take a substantial period of time before resolution, and that during this time period I might be able to get a better job, which might permit the option of working out an agreement to pay off debts over a period of years (such as via CCCS). However, Discover Card wrote me a letter received today: "We have been authorized to proceed with legal action to secure the balance owing. If we do not hear from you within ten (1) days of the date of this letter, your account will be forwarded to an Attorney to obtain judgment against you." Should I conclude that I have no realistic option other than filing for bankruptcy? And should I file ASAP, given the possibility that the option of Chapter 7 bankruptcy could be drastically changed depending upon the outcome of Senate-House conference committee deliberations? If I proceed with filing for bankruptcy, what suggestions do you have for where I could turn for resources and suggestions about how to proceed, and later how to minimize the damage to my ability to get an apartment, car, etc.? On a personal note, how do you deal with the shame about failure in this area? Thank you for any help you can give.
Yes, go and file. But remember 10 years on your credit record. Will going Bankrupt have any bearing with geting a job in your profession. Do they check your credit?? After you file you can reestablish your credit with a secured credit card etc. Don't worry be happy. Bankruptcy is common in todays world. Just learn from your mistakes !!!
I may be wrong, but I think I read somewhere that you cannot discharge student loan debt in a BK. Can anyone confirm this? Just as an aside -- please don't take this wrong, but I'm really curious. In what part of the country or in what field would someone with a doctorate make only $30,000?
You can discharge SOME student loans, but you need to pass certain hardship tests. Generally they are not dischargeable. Student loans are so frickin' complicated, there are so many kinds, and they all have their own rules. I'd go to the student loan webpage: http://www.ed.gov
My doctorate is in the field of religion. Some professors at major research universities can make around $40,000/year. However, others at small Christian colleges can make around $26,000. I'm only beginning the job hunt, and am just starting out in my profession, so I'm erring on the side of caution regarding how much I might be earning at the beginning of my career.
Ah -- that explains it. It's admirable to be in a field where the motivation is faith rather than profit.
Some people are what they call "judgement proof" meaning they can't take what you don't have. What other assets do you have? But judgements can keep getting renewed, they basically can wait around until you do have assets to attach. Do yourself a favor and make an appointment to go speak to a lawyer who specializes in bk. You'll get answers on what would pertain to your specific case. It usually helps you decide whether filing is your next step once you know what will happen in your state and court. I've read that student loans are next to impossible to get discharged. The "hardship" rule can be interpreted differently by each court and if they feel you've benefited from your education at all, forget it. The attorney will let you know what your chances may be. The "shame" you'll feel and how you deal with it, is totally up to you. I can tell you I filed for severe health and job transfer issues and I KNEW it was my only option left once I had ruled out ALL others. I did try every other option before I had to file, so my "shame" level is non-existant for me. I accepted it was what I had to do and am now focused on rebuilding and sparingly using credit to obtain a loan in the future. I know some people file just to file, but all of the people I know who have filed did it out of complete desperation. They did whatever they could to avoid it until they knew all the options had run out. You do what's best for you. Try anything you can before you'd have to take that step.
I don't know what part of the country you are in. But, my wife gets about $34,000 a year teaching in a Christian school. She has a Masters. I know in Georgia, they pay even better. High school is not bad if you find the right school.
I agree, you should speak with a BK lawyer first. My husband and I had to file BK after he got out of the service and was unable to find work. We felt real guilt. But from what I have learned on this board, and through personal experience, you try to do the right thing and pay your bills in installments or through a CCS, and you are worse off! I would not suggest a CCS, we went that route once before and it caused us a lot of grief. After you file, if you decide to, get a secured CC, rebuild credit slowly, and avoid making the same mistakes, I'm learning myself. My BK will finally come off reports in August this year!
Whatever you do, DO NOT go to CCCS. I should have filed a year ago but I trusted them to help out. My accounts just became more delinquent and my balance really hasn't gone down. I'd be a year into cleaning up my bk if it wasn't for my veryunwise decision to go through CCCS. Remember, they don't work for you!
There are many, many types of Student loans, true. In my Bk, I asked the question for a close friend. (Our student loans were paid off when we filed. So, it wasn't an issue.) According to our attorney, if the loans were at least 10 years old. That is, you had to have been paying on them for 10 years or more. If that test is met, there were other tests to meet as well. The ten year thing was the big hurdle for most people.
That 10 year rule was amended back in 94 or 95 to not allow any to be discharged except by hardship. See US Title 11 section 523 - Exceptions to Discharge (8) "for an educational benefit overpayment or loan made, insured or guaranteed by a governmental unit, or made under any program funded in whole or in part by a governmental unit or nonprofit institution, or for an obligation to repay funds received as an educational benefit, scholarship or stipend, unless excepting such debt from discharge under this paragraph will impose an undue hardship on the debtor and the debtor's dependents" I wanted to add that I did look into 3 different debt management places (like CCCS) before we decided to file but (now I think "luckily") they couldn't make a difference in our outgoing payments so we couldn't use them. Now I'm pretty sure I probably wouldn't go that route after reading so much bad publicity about them, but like I said, at the time I did try. Filing is (usually) always your own decision to make, it's a choice. The more you feel you've at least explored your alternatives, the less "shameful" I believe it should be. Good luck.
Let's say hypothetically that I could get a high school teaching position for $34k/year beginning this August or September, and that I could continue to work for $10/hour for most of the remaining period, excluding time for relocating to the school. Would it still make the most sense for me to file for bankruptcy, given the facts as described in my first post on this thread?
Unwise How did you get so far into debt? Did your income change dramatically downward after receiving your cards? If not, then I think that the credit card companies must have some culpability and accept some of the blame for your current situation(not that I am trying to say that you are blameless or not since I am not in a position to say either way). There have been far to many examples of card companies marketing their cards irresponsibly. Let me also add my voice to the chorus that is saying... STAY AWAY FROM CREDIT COUNSELING OF ANY TYPE. I am in the mortgage industry and companies like CCCS are considered the kiss of death to try to get a mortgage. Also let me add that it is almost impossible to get stfederally guaranteed student loans discharged in a BK. You would have to be able to prove that paying them back will pose an untenable hardship on you and your family. Good luck to you. fla-tan
Factors contributing to my getting so far into debt included my having a low income--including periods of no income during summers unemployed, which necessitated my seeking departmental loans to alleviate summer unemployment--while working on my dissertation as a graduate student, while needing numerous books in order to complete my dissertation. Summers have been the most difficult since university paychecks (whether for fellowships or teaching writing) have not included summer support, and temp work has varied considerably in availability. During the school year, when I have received support, it has often been about $1500/month. I have not done the best job budgeting, which I find quite difficult (I realize I'm hardly the first to feel that way).
Just my two cents-- Yes. from what you've said here I think that you should file for bankruptcy. You owe a lot of money compared to what you're going to be making in the future and the sooner you file the sooner it will be over with both with the creditors and later with the removal of this negative spot from your credit reports. And the sooner you can begin to rebuild yourself into the credit worthy person you sound like you want to be. Unless you exaggerated your income greatly to your creditors, then I think that it's on them that you were given so much credit without realistic means to pay it back. You might not feel great regardless of your decision but this way you can get somewhat of a fresh start. Sounds like you'll still have to pay your student loans though. Maybe try to get your deferments and then consolidate your loans to get additonal deferments. (Yes, you can do it twice, once before and once after consolidation) You didn't mention if the departmental loans could be discharged in BK. Hopefully they can. And as I (and it seems like others here) are trying to do--learn for your mistakes.
