New to this

[Zoer418]

I am thinking of filing for bankruptcy. I am fairly young and wonder if that will be a factor at all. I was also wondering if there is a minimum amount that you need to owe. And one last question (I promise), do you need to be behind in payments. I am up to date with mine, but there is no money left after I pay my basic living expenses. That is why I wanted to file. Any help will be greatly appreciated. thanks

[JeepMom]

My sis was 20/21 when she filed I think.

[bkbiker]

Hi,

Just quick questions, how much money do you owe and do you own any real property; like a house or car

If you hire an attorney the cost to file will start at about $1,500 and just goes up from there.

Good luck,
bkbiker

[anonymuse]

There are two kinds of BK--Ch 7 & 13. 7 wipes out your debt and 13 puts you on a payment plan. Take a look at the tactical bk manual in the sticky to get an overview.

[Zoer418]

I owe a little more than $11,000. it doesn't seem like much but It's getting hard. I do have a car but I'm still paying that off (and I don't want to lose it), no real property. I actually am in a Credit counseling service and I thought that it would be helping but really its not.

I actually have a consultation set up to see an attorney this weekend. I just thought I would get some more info from this forum.

[BassBoy]

$11 G's is not that much. IMO, I think you could possibly avoid BK all together. Does the $11 G's include what you owe on your car? How much is actual CC debt?

[bkbiker]

Hi ZoeR,

As Bassboy said 11 thousand dollars in bankruptcy is not that much, however I do understand that this is a lot of money to you, just a couple of thoughts;

After you file bankruptcy, your credit is shot to hell, and it will be some time before you can borrow any substantial amount of money, also the credit cards you can get will charge you fees and high interest.

This bankruptcy will stay on your credit report for 10 years

You can not file chapter 7 bankruptcy again for 8 years now, what if something really bad happen and you needed to file in a couple of years?

You could just stop paying your credit card bills, there is no law that says you have to pay, after a few months the credit card Co.s will change their tones and will offer you better terms to pay off if you still wanted to.

If you can wait out the statute of limitation (SOL) for your state, you will not legally owe this money.

You can write the collection companies and demand that they do not contact you anymore.

Maybe your life situations will change in the coming years and this debt will all of a sudden look small.

Please do not let any lawyer talk you into filing before you have really thought this through; remember that this lawyer really just wants your money!

Good luck,
bkbi

[JeepMom]

Hi,

Just quick questions, how much money do you owe and do you own any real property; like a house or car

If you hire an attorney the cost to file will start at about $1,500 and just goes up from there.

Good luck,
bkbiker

I filed joint with dh for $400, depends on where you live.

[anonymuse]

Like everyone says, $11K is not a lot of money (although I know it definitely feels that way for you.) I'm guessing that you are maybe younger than some of us (in your 20s perhaps.) And believe me--at that stage in my life anything over $1K was huge!

Plus there's the BK fees & the fees for the classes which will set you back another $400-450.

You want to be paying more than the minimum to make some headway on those bills. (What is your monthly minimum?) Without considering interest, this could be paid off in about 5 years for $200 a month.

Is a part time job a possibility?

[BassBoy]

How to Negotiate with Creditors

Creditors are often willing to negotiate

Creditors are often willing to negotiate more favorable terms in order to avoid more serious debt problems, which may result in client falling further behind in payments or defaulting on their balances.

Your ability to negotiate a repayment plan with creditors will depend on whether they believe you will honor the agreement. Convincing them of your good faith will go a long way in helping you get along. Being honest and open with your creditors is important. Explaining the situation and telling them again that you want to repay the debt makes them feel better. Contact them before they call you, answer their questions quickly, and keep communications open.

Creditors might be willing to settle their claim for a smaller cash payment, or they might be willing to stretch out the loan and reduce the size of the payments. This would allow you to pay off the debt by making smaller payments over a longer period of time. The creditor would eventually receive the full economic benefit of its bargain.


Which debts are more negotiable

Rarely negotiable - Mortgage, rent, child support, and income tax are rarely negotiable. However, unsecured, or noncollateral, debts like credit card bills won't be that difficult to negotiate a better term. Many of these creditors would rather willing to work out a reasonable repayment deal with you directly, than turning your account over to a collection agency.


Prepare a definite plan

Review your finances and evaluate what payments you can pay.

1) List all your debts
2) List the monthly payments and what you can afford to make
3) Determine your negotiating targets


Implement your plan

1) Call your creditors and explain your situation. Let your creditors know the details of your particular situation so that they can take those circumstances into account while developing a plan that will work.

2) Tell the creditor that you have a realistic repayment plan that will allow you to keep your account in good standing while meeting the needs of your other creditors as well. Propose a specific reduction for your payment and suggest the number of months that this plan will remain in effect.

3) Be polite but firm while negotiating terms on your accounts.

4) Keep careful records of whom you talked to, the date and time of your conversation, and what was agreed to.

5) Follow up your conversation with a letter to the person you spoke with.

6) Never agree to a payment that you can't afford to make.

7) Stick to the terms of the agreement, once you have made a commitment to pay. Otherwise the creditor will find it difficult to trust you in the future.


Options which you may wish to discuss with your creditor include:

*Making interest-only payments for a set period of time

*Making reduced or no payments for a set period of time

*Adding the arrears to the total amount due ("capitalizing the arrears")

*Agreeing a schedule for repayment of the arrears. Repayments must be reasonable given your income and outgoings.
*Offering a lump sum in full and final settlement of the debt

*Writing off whole or part of the debt

*Making payments from your benefits (this can only be done in certain circumstances)

*Obtaining gas and electricity pre-payment meters.


If the creditors will not accept your proposals

In order to persuade your creditors to accept your proposals, you will need to send them a letter explaining your situation , and including details of your debts, your outgoings, your income and how you propose to pay your debts. Be sure to include in your outgoings any money which you have agreed to pay to your priority creditors.

If your creditors refuse to accept your offer, ask them to reconsider. Point out if other creditors have agreed to the offer. Be persistent. If your creditors are still not happy with your proposals, they may take you to court. Take advice if this happens.

It is important to respond to court documents within the deadlines stated, so that the court knows what you can afford, and to attend any court hearings. Ultimately, the court will decide what installments you must pay taking into account your expenditure and income.


Nonprofit Credit Counseling Services can help you

If you find it difficult for you to negotiate with your creditors by yourself, your best bet may be to seek the help of a nonprofit consumer credit counseling service (CCCS). They have more negotiating power than individuals. These centers charge a small monthly service fee. However, creditors provide most of the support for financial counseling services.

The repayment plans arranged through credit counseling centers enable you to make monthly payments which are then re-distributed by the program among creditors until all your debts are paid in full. Creditors usually prefer this kind of plan, since they will eventually get more of their money with this approach than they will under "straight" or "Chapter 7" bankruptcy.

Under a repayment plan through a financial counseling service, you still might have to pay interest charges on your debts. However, many creditors will waive interest charges and delinquency fees.

[bkbiker]

[Zoer418]

Wow, I'm really late.

Thanks for all your input everybody.

I just finished calculating my actual debt. Wowzers!!! Its $20,500!!! Credit cards is more than half than that. And more than 50 percent of my income goes to paying this crap off.

bassboy-very usefull info. wish i would of had it before I decided to go with a credit counseling service. interest rates didn't go down as much as I thought they were. And my balances haven't moved as much as they would've had I not went with a cccs.

anonymuse-yes i have considered part-time. but it's hard when I already work full-time. I know there is working late nights, but I have tried that once already and it affected my attendance at my ft job. I cannot afford to mess with my ft job right now. If I could afford to pay more than the minimum , then I would already have been doing that. But right now, that's all I can send.

bkbiker-i don't ever want to touch another credit card again in my life!!! I know i'll need credit when I want to buy a house, but I have learned my lesson with credit cards!!! The only cc I will get (only if I get one) are those secured ones and that will only be to build my credit up again. I know things could change in maybe a couple of months, or years, but right now, I am just so overwhelmed by all this debt.

Thanks again for all your responses everyone. You have no idea how ashamed I feel having to even consider filing for bankruptcy. I can't believe I let it get this out of control. I am only 24 yo for crying out loud!!! I really wanted to be responsible and pay off everything I owe, but right now bk seems like the way to go. My consultation is this weekend ( I had to reschedule) and I guess I'll know what I am finally going to do.

[BassBoy]

Okay, $20,500 is a little more extreme. Doesn't it put you in awe when you finally sit down and do the math? When we went to file BK, I about damn near crapped myself over the amount of our medical bills (only a small fraction of our debt though). I had no clue. I was stunned.