I have several delinquent CC accounts, for significant amounts (> $10,000 each). I used to make 6 figures, but have been unemployed for five years, and depleted all savings, 401K etc. I quit making minimum payments about 6 months ago. Most accounts have been turned over to CAs and/or attorneys, but no lawsuits filed yet. I kept hoping things would turn around for me, as I'd l really like to enjoy the financial success of my past, and feel morally obligated to repay my debts. However, at this point, I'm leaning toward Chapter 13. If I wait any longer, I'm afraid suits will be filed, resulting in judgments which are non-dischargeable through Bankruptcy. I think that a bankruptcy would fall off my credit reports well before any judgment. I live in Nebraska and its my understanding that the judgment is good for 20 years; whereas Ch. 13 has a seven year statute of limitations. Is there anything else I should consider before making a decision about bankruptcy? Your advice is much appreciated.
I've looked further into Chapter 13 Bankruptcy and discovered that you must have regular income in order to be eligible. I don't think the child support I receive ($ 1,000/month) will cut it. It doesn't even cover our basics.
At this point, file chapter 7. It's got a ten-year SOL, but it's better than a judgment for twenty, plus it'll give you finality.
I'd say a judgment is better than bankruptcy. Bankruptcy is going to stay on your credit report for 10 years. A judgment will only stay for 7 years. That's just for starters. Although there are no online resources which can be relied upon to be 100% accurate, I think that HTTP://WWW.LAWDOG.COM is probably the most reliable source of information since they update with more regularity than most others do. Here is what they have to say. Since yours is a credit card debt(s) they have to bring that action within 4 years in Nebraska and some other states from the time it became or should have became obvious that you had gone into default. Some states say that the SOL begins on the date upon which you were supposed to make your last payment but failed to do so and others say that it starts on the chargeoff date. You will have to check Nebraska law to see what it says about statute of limitations to bring legal action in the first place. So you have three or four different statute of limitations to think about. If they fail to bring legal action within the 4 year period you will have to file an answer with the court as well as a set of affirmative defenses then follow that up with a motion to dismiss with prejudice. The court would have little option other than to dismiss their case. If you fail to answer and file motion to dismiss they can and probably will get a judgment no matter how long ago it was since the Statute of Limitations started. You must plead the SOL if it is applicable to your situation at the time or you will most likely lose the defense. Another defense you might raise if they sue you is to file a motion to dismiss for non-collectability. That will sometimes get a motion for judgment dismissed if you can prove that you are on a government pension such as SSI or other government pension since they can't garnish any goverment pension so that should also apply to other situations such as in the case of a long time welfare recipient and might hold in your situation as well but would not be as likely to win as it would if you were on a government pension. Just remember that although a bankruptcy won't stay on your credit reports for more than 10 years it will remain on your public record at the courthouse for the rest of your life and beyond. Judgments do that too but the difference is that if you ever make application for a loan in the future and they ask if you have ever filed bankruptcy you will always have to answer in the affirmative or you could be charged with providing false information on a loan application. That is a federal offense. They often ask whether you have ever filed bankruptcy or not but seldom if ever ask whether or not you have ever been sued.
