Ready to file chapter 7 - need advice

[richardson]

I have an appointment with a bankruptcy lawyer tomorrow morning but I need some advice about whether to go through with a Chapter 7 or not.

I have about $70K in credit card debt. I haven't paid it in 4 years or so and am currently 'judgement-proof' (I have no assets). But I'm not likely to remain so. I will probably get an $80K job next year (I went back to school).

I have 4 collection companies listed on my credit report who have bought my debt, the amounts vary from $11K to $25K. There aren't any judgements listed on my credit report right now.

So I was thinking of waiting it out. It's only 3 years more and then things will start to drop off. Or maybe I could arrange a settlement.

But as I understand it, if the agencies get judgements against me they could hound me for 20 years. It seems to me that there is little reason for them not to do so before the 6 year statute of limitations, given the amount of money involved. And with the new laws, they know that they have the upper hand. So I think that I should declare now, before the new laws take effect and just get a clean slate. That way I can start to rebuild my credit and start a normal financial life without worrying about being sued.

So am I thinking correctly or being too paranoid about the agencies getting a judgement? If they haven't done it in 4 years, are they likely to do so in the next 2? What would trigger them going after me?

Thanks for any advice!

[sunshine08]

You state that you are hoping to get a good job soon and try and attain assets etc. Well your credit report will cause you difficulty in this area. You will pay much higher interest rates if/when yo uget credit. Remember that the companies that "purchased" your accounts are waiting and watching you over your shoulder to seize the opportunity to collect a percentage of something is better than nothing. They have nothing to lose right?
Talk with you attorney and he will give you several scenerios and possible outcomes to them. Make a list of questions to ask him.

[richardson]

Well, no, if I don't file then I won't be buying things. But I still might get a good job and just not save any money. How would the agencies know that I was gainfully employed if I don't make any credit transactions?

You state that you are hoping to get a good job soon and try and attain assets etc. Well your credit report will cause you difficulty in this area. You will pay much higher interest rates if/when yo uget credit. Remember that the companies that "purchased" your accounts are waiting and watching you over your shoulder to seize the opportunity to collect a percentage of something is better than nothing. They have nothing to lose right?
Talk with you attorney and he will give you several scenerios and possible outcomes to them. Make a list of questions to ask him.

[StaciMM]

I don't really know the answer, but they have ways... If you get a decent job, there is a good likelihood you'll get a judgement and then a garnishment...

[richardson]

What if I'm self-employed? Is there some trigger that makes them get a judgement? Won't they do it anyway just in case? I mean, for $25K I would think that they would. But they haven't so far...

I don't really know the answer, but they have ways... If you get a decent job, there is a good likelihood you'll get a judgement and then a garnishment...

[StaciMM]

I guess it all depends on the creditor-whether or not they'll take action. A good likelihood is the original creditors may sell the accounts to someone else just before the SOL runs out, and the new owner could file for a judgement immediately to prolong their collection efforts. If one or more do get a judgement, they could access funds from your checking account if you don't have an income that they can garnish.

One angle to keep in mind... If you decide to take your chances, and they DO get a judgement, there will be more limitations on filing after the 10/17 w/ the law changes. Even if that is not a major issue for you, you'll be getting your 'fresh start' in a year or 2, when you could have been a year or 2 post BK.

If it is not likely that you're going to be able to resolve these accounts (by paying them) any time soon, filing BK would probably be a good idea.