College student now living at home

[Aizen]

Hi, I just discovered the forums and hope I could get some help here.

I owe about $14,000 of credit card bills and I'm only 22. =( I still go to school full time and work a part-time job.

My questions,

~A Chapter 7 requires citizenship?
~I live at home with my parents who claim me dependant. Would they be affected by this?
~How many pay-stubs do I need for proof of income. I get paid the same hourly wage for 20 hours a week, would 2-3 pay stubs be sufficient?


Any help is appreciated. I'm hoping that I could save up a few checks to afford the actual bankruptcy cost. I probably would ask for more guidance later on. But it seem like Chapter 7 is the only way to go for me.

[Aizen]

Anyone?

[FilingOnMyOwn]

I don't know for sure but I think you'd be ok on all that. It won't affect your parents.

[SinkingFast]

You'll need your last 6 months of paystubs for most attnys. If you don't have them ask your payroll people for a printout of "Payment Advices".

Most attnys also want to see the last 4 years of income taxes file, and any wage statements or other 1099's you have.

Since you live at home, and your parents claim you as a dependent, you may encounter problems with Schedule J. The Expenses form. You'll have to show how you spend your money without including any payments to Creditors. Anything you plan to discharge, you don't include those payments.

Best thing I can suggest, is contact a few BK attnys where you live. Set up some Consult appointments. Consults are generally free and you can get information specific to your unique situation.

[Aizen]

So say I get paid around 700 bucks a month.

$250 in living expenses
$350 in credit card minimums

Does that equal $100 disposable income?

Thanks for the responses =p

[FilingOnMyOwn]

Nope. $450. With your current living situation, you have too few expenses & make too much to file, unless you work less. If you're close to graduating, you should just stick it out.

[SinkingFast]

So say I get paid around 700 bucks a month.

$250 in living expenses
$350 in credit card minimums

Does that equal $100 disposable income?

Thanks for the responses =p

Any debt payments you plan to discharge do not get included in your expenses when figuring disposable income for BK purposes.

You're probably counting what you spend, out of pocket now, in your living expenses. Gas and food out??

Don't forget to include for books and fees, clothes, personal toiletries, and other things you may buy for yourself. Do you pay when you go to the Doctor or Dentist. Do you wear glasses and need to visit the eye doctor?

Maybe you have lots of expenses you're not thinking about because you've been charging them for so long.

You do need to think about this long and hard tho. BK will show up on your Credit Reports for 7-10 years.

Many employers these days do background searches which include a Credit Check.

If you're studying for a field that will require Bonding or some type of Security Clearance, that may not be possible with a BK in your history. BK can severly limit your job prospects in the future.

And that's just employment implications. That doesn't include higher rates for insurance and higher interest rates on all sort of loans.

[FoolAndHisMoney]

I don't see any need for you to file over $14000 in debt unless you can't work for a good reason. You may need help with the high interest payments and fees which an honest credit counselor or attorney can help you with, but with your age and that amount of debt and living at home it seems you can avoid bankruptcy. It won't be easy, but it can be done. You should only file for bankruptcy if there is no other way for you to repay your debt and you will spend more then 20 years trying.

[Aizen]

Well I'll consider credit counseling. How much can they save on monthly minimums? Plus, where's a reputable place where I could find good credit counseling services?

By this time next year, I could be working as a teacher making about 40K a year before taxes. Would Chapter 13 work in this case? I mean, would the creditors buy it if I tell them to freeze my credit cards and lower my interest rates. However, expect much bigger payments on my debts next year?

Btw, I probably spend more than $250 a month, I'm not thinking about buying books, cloths, car repairs, etc. I'd probably do a little search this weekends and call a few attorneys this upcoming week and see where I stand.

=p

[FilingOnMyOwn]

Why are you determined to file? If you could be making 40k in a year, that will be more than enough to pay your bills. Furthermore, having a bk on your record fresh out of college and new to the workforce can interfere with your ability to get hired when they do your background checks.

[debtisbad]

Actually, even 40k is going to take forever to pay. How do I know this. Because it was me. You are forgetting taxes and that interest on CC is not deductible.

[debtisbad]

BTW, credit counseling is a joke. I know it first hand because I went through it. It basically consisted of 6.00 an hour employees trying to tell me how to manage my life when they could not even manage their own. Really, I found it laughable and pitiful at the same time.

[FoolAndHisMoney]

Actually, even 40k is going to take forever to pay. How do I know this. Because it was me. You are forgetting taxes and that interest on CC is not deductible.

Your right but for someone that still lives at home it just makes sense to work harder to lower this debt in 3 to 5 years without bankruptcy. IMO if someone does the math and finds they will be in debt for 10 years or more on unsecured debts with no reasonable assets and no savings then bankruptcy is the only way.

[FilingOnMyOwn]

Actually, even 40k is going to take forever to pay. How do I know this. Because it was me. You are forgetting taxes and that interest on CC is not deductible.

You could get the job making 40k, live with your parents an extra 6 months, and pay all your debts in full. That would feel alot better once it was all said and done, and your credit would be absolutely outstanding. Thats what I would do. The only reason I filed bk myself, was because I couldn't find a job period. For years.

[Aizen]

First off, you guys are awesome for giving your thoughts and suggestions. Here's a couple more questions.

Isn't it illegal for employers to discriminate based on BK status? Also, I've been in control for a while but I recently missed about 2 weeks of work and can't seem to catch up to the minimums now.

One of my accounts has a $700 minimum on it now because I was late for two periods. That I just can't repay. If I pay them $700, it would leave me nothing to pay for the others.

I'd try to negotiate with the creditors themselves but how does that process go? Could I just ask them to freeze my card and lower interest rates simply because I'm planning to pay them little by little?

Stupid thing is, they keep increasing the interest rate so by the time I make the 40k next year, I'd owe a lot more than the 14k i carry now.

Thanks for all your time! =p