my first post....been reading this board for couple weeks and am in the "Research Newbie" stage but need some advice now on this. Background - DH and I have approx. $75K in deliquent unsecured debt most of which is CC debt but $15K is balance from surrender Nissan DOLA Feb. '03 now in hands of CA. We have not made payments on any of this CC debt for a year and all accounts have been sold to CAs. $14K in deliquent secured debt but $9K is time-share that was surrender last year and have not heard anything from OC or a CA on this. Other secured debt is Rogers & Hollands for our wedding rings that we stopped paying 4 months ago when we planned to file BK7. Since then we have wised up, found this board, learned a lot and plan to dispute and fight our way to a clean CR and avoid BK at all costs. Currently we have an auto loan with Harris Bank for F150 with payments of $432/month for 3 1/2 more years. Even with NOT paying any CC debt all these months, we are still having finacial trouble. My husband is in night school till Oct. '04 which is $400/month. We are both independent contractors and cannot even afford health insurance at this time. My DH wants to surrender the F150 to get out of the payments since our credit is already trashed and buy a used truck for $3 to $4K when I receive a lawsuit settlement next month. I am only receiving $8K so it will not solve all of CC debt problems. Here are my questions: 1) even though we have ruined our credit and one more charge off will not make much difference, surrendering the truck now will have a DOLA in '04 when all the rest are 6-12 months old (majority being 12mos). How much of a difference will this make in our fight to dispute and clean up our CR? 2) how likely will Harris Bank sue for the balance and get a judgement and for that matter Nissan too? I think it is a good sign that Nissan sold off the debt to a CA and did not seek a judgement but will the CA pursue it to judgement since it is almost $15K? From what I understand it will be impossible to dispute a car loan since the OC can easily produce the month by month payments/balances but what about a CA? Surrendering the F150 now will free up $432 a month which we can start saving to help get out of this hole and build up a cash reserve for the bleak years ahead till our credit is repaired OR we can continue with this loan till payoff in 3 and 1/2 years and it will be the beginning of positive credit starting from now forward. We are tore in what to do and keep changing our decision so any input from some veterans would be appreciated. Thanks!
I'm certainly no expert but in my personal opinion you might be better off filing BK. One problem you might find with disputing is that you might wake a sleeping giant and find yourself in the defendant's chair. If you wait until the SOLs expire you can avoid being sued successfully but will have very little access to credit for at least 3-6 years and then only better if your clean up efforts are successful. Are you sure Nissan *sold* the debt to NCO rather than just placed it for collection? If it was merely placed then Nissan could recall the debt at any time. Because the COs are so recent the DOLAs should only affect your clean up effort if you plan to wait something out, like the SOLs. It is difficult to tell how likely it would be for Nissan or Harris Bank to sue you. There are a lot of factors. It is likely that insurance has already made Nissan whole and would likely do the same for Harris so their motivation to sue might be somewhat reduced. Another factor is how your state treats judgements, ie can your wages be garnished, how easy is it to attach assets, or garnish bank accounts? Another factor is their compliance with your states vehicle finance laws. Like I said, my personal opinion is that BK might be your best choice. Done properly you can begin rebuilding right away without worrying about being sued. Yes credit will be more expensive but in the long run it might be the safest and least anxiety causing move. There are people here who indicate reasonable success in obtaining credit in both the near and long term after BK. If you're not too far upside down you might come out ahead selling the F150 yourself. If you surrender it to the bank they're going to auction it at wholesale. That means they don't give a crap how much it brings in. If you sell it yourself and pay off the loan immediately you can save yourself a headache. I don't mean to sound so negative. There are many many success stories here and it is important to remain positive but don't let that positive outlook cloud you view of reality.
I appreciate your advice. I have thoroughly research BK, its affect, and rebuilding afterward but I and my husband know for sure it is not what we want to do at this point. It could be something necessary in the future for something like big medical bills (as I mentioned before we are without health insurance and I have had 4 previous brain surgeries). Even if we obtain private health insurance, I have been told that any more problems connected to my past brain surgeries will not be covered. I can't tell you how important it is to me to be "in the driver's sear" dealing with these problems. With a BK, we give up ALL control, take a backseat, let the courts decide everything and must answer "Yes" to the forever question, "Have you ever declared BK?" no matter if the 10 years have past or not. No one ever has to answer, "Did you ever not pay your debts?" Not fair in my opinion. You're right.....I don't know for sure if Nissan sold the debt or just placed it in collections. I assumed it was sold since I started receiving letters from AMO Recoveries out of Norcross, GA. Their letters really crack me up. The very first notice I received from them read like a bill/statement and only said, "We are sending you this reminder to help you meet your payment obligation on schedule. Please note the amount above and make your payment so that we may have it in the office by the due date." They were stating that I had a payment of $428.19 due in 12 days which I knew nothing about (never talked with them before or received any letter). Then a few weeks later a second notice arrived with this headline: "YOU HAVE FAILED TO KEEP YOUR PROMISE" and read: "Your promise to pay $428.19 has been broken. To stop any further activity we recommend you remit the full balance to our office. I am assuming this is just a collection tacit to make me pick up the phone, call their office and tell them I never made a promise to pay $428 which at that point they will say, "Ok, what can you pay?" Am I right???? I don't know yet how my state treats judgements. Is there a web site with info on this or someone with experience for Illinois? One thing on our side is that we do not have any assets for seizure and both of us are independent contractors so I don't think they can set up wage garnishments plus their is no money in any bank accounts to seize. How can we sell off this truck when we do not have the title? Who would just hand us thousands of dollars with the promise of receiving the title in a few weeks?? Last year we were actually about to surrender this truck to Harris Bank and they asked us to take it to Carmax to get a quote which we could fax to them and they would take this as the value amount which would be better than an auction. The way I look at it is the balance left that we are upside down on can later be negiotated down and settled with deletion since I'm sure Harris doesn't want to waste their time and money on such a small suit when they can easily see our horrible credit, no assets, and no cash. Agree?? Anyone else with more options feel free to post a reply including slykens. Thanks so much!
I agree with a debt load of 75k BK is almost certainly the right choice. For a single debt of 15k I think you can plan a judgement. I would do the bk. Get it over with and then work on rebuilding.
Protege While I certainly sympathize with your situation, you are clearly (from your original and subsequent posts) still thinking about this with your heart and not your head. The process of BK is and can be a trying one. But let me tell you from experience, the relief comes very quickly. Usually even before everything is actually discharged. The sleepless nights, nasty letters, phone calls and worry evaporate overnight once you make that decision. And for your case, what are you protecting? The ability to say "No, I've never declared bankruptcy." Who on earth would ask you this? I've certainly never been asked...I think my mortgage lender paperwork had that question, but if I had answered in the affirmative, they are completely used to seeing/dealing with such situations. Things you might NOT know: People typically can get secured cards immediately. Unsecured cards I've heard of people getting within the first YEAR after the bankruptcy. No such thing if you tried/needed ANY credit (like for a medical bill) now. People can EASILY buy houses within three years of a BK. Might not be the best rate...but you can also refinance a couple years after that once the BK is 5+ years old and get great rates. Most BK will allow you to keep both your house AND one car. Your F150 may not need to be surrendered at all....since all your other debt willbe gone. A final note...virtually EVERY group health plan I've ever seen MUST take pre-existing conditions no matter what. If you go out and buy your own, then the subsequent brain work would be excluded. Again, here in CA, I've known about three cases personally where people had very very serious life threatening chronic conditions and this held true...all from different health plans. So you might want to investigate this and get employed by virtually anyone that will offer you a plan. aiki
I'm sorry but you have the totally wrong perspective on this and I think you don't fully understand our position. First of all, my husband and I work for ourselves and will continue to do so. I am never going back to working for someone else no matter how wonderful the benefits. My husband on the other hand will be entering a new field when he finishes night school and might end up with a company and have health benfits for us. Hopefully that will be the case and this will be a mute point but he is not deciding which job to take based on benefits as the most important item. As for pre-existing conditions Illinois law allows Insurance Companies to exclude items as pre-existing condition if you have been without health insurance for even one day - any lapse in coverage. Since I could not afford to pay COBRA after I left my last employer position 2 years ago, I have lapsed in health coverage and can now have pre-existing exclusions. Second, I do not need a BK to remove any stress and worry. I am not receiving any harassing phone calls. In fact, I am receiving barely any calls since we have moved, changed phone numbers, no forwarding number and have privacy manager which blocks any unidentified callers. Honestly, I am not having ANY sleepless nights over this. I know what we are dealing with and am prepared to fight my way through this and am actually looking forward to the challenge. Can you understand this position?? BK is an easy and weak way out in my option. Their is no home for anyone to take and no monetary assets. I am the one with the control here and the CAs have nothing to go after and will either go away or I will push them away. As for the "declare BK" question.....this question appears on any and all credit application and most places will not process your app. once they see this positive answer and you will never get the chance to explain. It is even on job application (which I will not be filling out anyway). We want to use this situation as an opportunity to turn our lives completely around. We should have never put ourselves in a 5 year car loan at this interest rate when we were struggling financially. We have made major spending and budgeting changes and are now starting to save money every month but do not want to be stuck with 42 more payments of $432 for a 2001 Truck that is not worth half of what we owe because we made a mistake and were "brainwashed" with the "it doesn't matter what it costs, just what the payments are" philosphy at the car dealer. I hope you do not take offense to this reply and can see another perspective and choice available. I have read many posts on this board of people who wished they had this information BEFORE declaring BK and say they never would have. I would hope someone who understands the other side and where I am coming from would post a reply to this also. Thanks!
Been in your position. The tens of thousands in debt, surrendered cars, the whole 9. File BK7. Unfortunately, you're going to need credit again. I know it's tough, though. We stopped paying on everything before we filed BK and we STILL barely got by on Top Ramen and cool showers. The worst would have been if creditors began calling. I'd include the Nissan debt. If the lender hasn't advised you of the deficiency after the surrender, find out in writing. Still, you should include the amount you're responible for under the contract, plus whatever fees they may have racked up after the surrender. The F150 might be a toss up. If you wanna keep making the payments, you'll be able to keep it after BK. But you're best bet might be to turn it in before the BK and include the balance in the BK. Wish you well.
It sounds like you need the $432 more than you need your credit for the moment. Don't keep the F150 for the sole purpose of establishing credit. There are other ways to building positive credit references. With all your recent debt, I don't think it will make too much of a difference with your score. What's the difference between what you owe on the truck and what it's worth? Here are the SOL's for Illinois per Whychat: STATUTE OF LIMITATIONS (IN YEARS) Sales (UCC): 4 Open Acct.: 5 Written Contract: 10 Domestic Judgment: 20 Even though you might be uncollectible now, doesn't mean you won't be in the future. Maybe you should consider BK.
i am really confused by your posts. you can't/don't want to pay your bills, but yet, you are disgraced by bankruptcy? you obviously can't afford to support yourself being selfemployed - you dont even have healthcare - and you won't work for someone else. life is not handed out on silver platters. you are choosing a lifestyle you cannot afford. initally i had stated in another thread that bankruptcy was your best option, but after reading your posts again i've changed my mind. i don't think there is an option out there that is going to satisfy you other than your creditors letting you walk away scot-free and leaving you with pristine credit. i truly dont think you want to improve your situation.
Be careful about thinking an independenet contractor status will keep you from being garnished. I do know a collection lawyer and he uses a debtors exam to establish your income and, who you work for and then, will claim this is not income but, an accounts receivable and make a grab for the entire check. That being said, I wouldn't file unless I got sued and lost. An Il. judgment is good for 20 years. http://www.locate123.com/StateLaws.asp#Illinois
If I am reading this right, you have some income and are saving for the road ahead and not concerned with credit at this time. Youâ??re not paying any of your 75K in unsecured debts and no longer want the truck or the payment. Your reserving filing Bankruptcy because you may have additional medical bills to add. I would suspect that some of the creditors may get a judgment and you would have to decide at that time if filing BK is right for you. You may not be collectable right now but if your situation changes you might be. Seems to me that because of the possible large medical bills you might incur postponing filing of BK is prudent and if a creditor backs you into a corner you could always file then. The new bankruptcy legislation may make it harder to get a ch 7 if hubby does take a job and has an income in the future but thatâ??s hard to say. Either way you will have some credit cleanup to complete... just depends on what your future goals are. Good Luck
Re: Should we surrender another veh 8004me, I think you summarized our situation very well and that is what we are looking at. keepmine, you're right, I don't know all of the ways someone can garnish or take income from us here in Illinois. My husband is from Texas and he states that they cannot garnish wages in Texas for debts but things are different in Illinois. Plus he will hopefully have a much better income in his new field and could be "garnishable". kickman, you said, "File BK7. Unfortunately, you're going to need credit again." Did you mean you filed BK7 and it was difficult for you to obtain credit again? Or you are advising us to file BK7 now so that we can begin reuilding credit now? When we started the BK process last summer I had already turned in my Nissan, bought a cheap used car and later in the fall we were ready to surrender the F150 also so we could get out of this high payment loan. We had even borrowed money from my best friend and bought a used truck for $2995. Then, the BK lawyer explained that we would have too much equity in our autos combined and she could not protect both of them. This meant to us that we were stuck with the F150 if we proceeded with BK since that loan equity is upside down. Otherwise, if we tried to throw it in to the BK with 2 used paid for vehicles, the court would make us sell one of them and we could not both work with only 1 vehicle. We ended selling the used truck, paying back my best friend and catching up on the F150 payments so we could keep it in the BK. Since then, we have decided not to file BK at least not at this time. As 8004me says, "BK is prudent and if a creditor backs you into a corner you could always file then." and keepmine, "I wouldn't file unless I got sued and lost. An Il. judgment is good for 20 years." I agree with their viewpoints. Cinderella, yes we do need the $432 a month now more than credit. The current payoff on the 2001 F150 is $15,298 and I believe it is worth $10K (maybe) since it has been used as a work truck with high mileage, beaten up truck bed (no dents) and maintenance work needed. I thought our best option was to surrender, receive attempts to collect the $5,000 - ? balance due, wait it out till they understand we do not have any money to give and then work out a settlement for less WITH DELETION. While we are "waiting it out" we could be saving this payment to be used as a lump sum settlement. jenz, I too have been very confused going through all of this. Part of the situation is that alot of our debt was actually occured with my ex-husband who out of the blue one day quit his $71K job so he could lie on the couch and be put in the hospital for depression and paranoid delusions. I'm totally serious. He was unemployed for 4 months without pay, employed again for 2 months, and then lost that job (Dec. 2001). He was sick enough to have gone on medical disablity from his first job but he just freaked out and quit before we could pursue that. We were divorced by July 2002. I also had a medical leave in Feb. 2002 due to my brain/cyst and did not return to that postition. Jenz, you state, "you obviously can't afford to support yourself being selfemployed". Yes, we can support ourselves with our current income but what first happened is that I did not learn to LIVE at my current income for a whole year after my divorce and was still living like we had $71K income from my ex. That is how I made the stupid mistake of upgrading my old Nissan to a new 2003 Nissan with an even more upside down loan and payment of $630. I also walked away from the divorce with large CC debt incurred by my unemployed ex but under my name to pay. I don't expect to "walk away scot-free" and am willing to settle these debts for what is fair. What I don't believe is fair is either paying for my ex-husband's illness for the rest of my life or being forced into a BK just to get out from under all of this and have that black mark on me for 10 years. Believe me, we have changed our lifestyle, spending and budgeting and have turned a corner. I am just trying to figure out the best path to take from this point forward which would give us decent credit (after some hard work) and be able to purchase a home in the future. I appreciate everyone's opinions and imput whether it agrees with my position or not. Thanks for your time and concern.
Re: Re: Should we surrender another veh Do you believe that you are going to get out from under that much debt and not have a black mark for 10 years? You will be sued, and you will have judgments haunt you for at least a decade. The bankruptcy is the smart choice. No one is judgment proof. Some hospitals and other creditors in the United States are now suing, getting judgments and then having people arrested if they don't pay the judgment.
Re: Re: Re: Should we surrender another veh Where are people being arrested in the United States for consumer debt? Debtors prison were abolished long ago.
Re: Re: Re: Should we surrender another veh if you fail to appear (if you are sued) the plaintiff can have a warrant issued for your arrest and you will be held until the next court date. THAT can and does happen all the time.
Re: Re: Re: Re: Should we surrender another veh Sorry, but that's incorrect. People get arrested every day for failing to fulfill the terms of a debt related court judgment. It is called a Body Attachment, and many creditors have begun using it to collect debts. After getting sued, and failing to either show up in court and/or pay the judgment, the creditor goes back to the judge and requests a body attachment. The judge will then issue a warrant for your arrest, and you will be forced to post bail and come back to court to answer the judge as to why you did not pay.
Re: Re: Re: Re: Re: Should we surre I would never let it get to that point. I would always show up in court and answer to the judge and if at all possible, settle out of court before then. Even if I did end up with a judgement, I would pay it and not need to be arrested. I think you got the wrong impression of what I am trying to do here. Ignoring debts or collections for a time is a tactic in this battle but I am not a dead beat or stupid.
Re: Re: Re: Re: Re: Should we surrender another veh SO THE PRISONS ARE FULL OF DEBTORS SO THE MURDERS AND RAPISTS AND DRUG DEALERS HAVE NO PLACE TO STAY???
