ch 13 w/ Gambling debt

[boiler704]

First time poster here. I am a single 24 year old male with roughly a $3k month income after taxes. I have no equity. My car (96 grand prix) is paid for and not worth very much. I do not own a home and live with a roommate so my expenses are relatively low.

I have roughtly 80k in gambling debt all on credit cards. The debt has accumulated over the past 3 years. All cash advances took place in the casino. As a result of bouncing balances between credit cards most of the activity shows up as having occured within the past year. $28k of the debt is in a MBNA gold option loan which was a result of consolidating credit cards but I could pull statements to show that the debt began 3 years ago. The problem was I didn't get rid of the old ones and since maxed them out again.

Despite never missing a payment the interest rate on the cards have skyrocketed and I won't be able to make all the payments anymore and have money to live on. If it werent' for the high interest I could easily payback the debt in 5 years. However with a 20-29% interest that doesn't seem likely which is why I am considering chapter 13.

Without credit card payments I have roughly $1100 disposable income each month. Is chapter 13 the best option considering I would be paying near the full amount back or would a debt consolidation be better? Also if I did file chapter 13 since I would be paying most of the debt back do I need a lawyer or would I be okay using an online site to put the required documents together. I have 7 credit cards (captial one, chase, citi, 2 bank of america, 2 mbna) so the lawyer cost would add up as i'm sure each one would argue that the gambling debt should not be discharged

[Pinktiger]

Go see a lawyer and find out.

Your debt is dischargeable, regardless of the cause, as long as you haven't committed fraud. Once 6 months goes by, you will be fine on the credit cards (6 months without a cash advance or large purchase.)
You will probably have to go with a Chapter 13; if you can show that you are doing something about the gambling problem, such as getting counseling and/or going to GA (Gambler's Anonymous), that will also help.
Good luck-- my situation was similar.

[boiler704]

Once 6 months goes by, you will be fine on the credit cards (6 months without a cash advance or large purchase.)

So I will need to wait 6 months before filling? Should I try and stay current on the credit card payments or ignore them? I was told that once you know you are going to file bankruptcy you should stop paying credit cards but 6 months seems like a long time to stop paying.

[aa06a47]

Boiler, welcome to the forum. Here is my opinion, my advice comes from going through a similiar situation as you. Trustee's vary though, so a local attorney would be the best source of advice. (sometimes)

1) Quit using your cards for cash advances and gambling.
2) Start gathering win/loss statements from the casino's. If you used a player card, this should be easy.
3) Quit gambling (easier said than done I know). Seek help from your doctor / GA (gamblers annonomyous)
4) Try and make min payments for a couple of months and then quit paying.
5) If you can prove your losses from the casino (win/loss statments), then you should wait about 100 days since your last advance before filing. The longer you can wait, the better, however once your past 90 days, the cc companies have to prove fraud, which is almost impossible.

Now, here is where my advice will differ from some on this board. In my opinion, I would go out and buy a new vehical. Buy something with a payment on no more than 4-500 bucks. The reason I say this is 1) your credit is probably still good since you are current on payments, 2) Secured debt is allowed in bk. 3) A 10 year old car might not make it through the chapter 13 without major repairs / replacement needs. If you do it now, your going to be better prepared to make it the 5 years your in a chapter 13. 4) It should be easy to prove no fraud if your replacing a car that is 10 years old, especially if your going to go 4-6 months before filing.

ps...buy an American car, there are alot of good rebates / promotions right now.

Face it, the new bk law will penalize you financially for not having secured debt in a way. If you don't have that car payment when you file, all that money will go to pay unsecured creditors. In my opinion, don't walk, but run to get that new car!

[CATCHMEIFYOUCAN]

Gambler Too !

Hey "newbie,"

I'm a gambler too and you sound just like me, I dont own anything, no house, I do pay rent for an efficiency, I use to not have a car payment, but since my car got flooded just before I filed, I had to buy a new one, but that is safe now, as I'm in Ch13 and the dealership has acknowledged I can keep the car as long as they get their payments.

My debt is about 65g's .. and with two full time jobs I'm well over the median income, so I have to pay back .. most of it is from consolidating loans and the credit card of course (due to gambling).

I'm filing in the state of Virginia, by the way .. so if you wish to hear a little more .. PM me

My last cash advanced was in April/May and I haven't had any questions raised about my gambling and Bk .. YET (knock on wood!)

Good Luck my friend .. Catchmeifyoucan

[boiler704]

I like the idea of getting a new used car before starting the payments. The new laws do seem to favor those with existing expenses. Only problem is that I don't have the down payment for it and despite being current on payments I'm typically denied credit because my revolving credit limit is so high. I tried for a while to find 0% balance transfer rates to help out. Based on performance at work I can achieve a decent bonus each year at work that is paid out in feb. I know this is not guaranteed money but I'm confident that I will get a min of 5k based on one group wanting me to transfer over and my current boss fighting to keep me. I could then use that as a down payment. Only problem is I would be looking at not starting bk for like 9 months then.

I had met with a bankruptcy attorney and he didn't seem to willing to take on the case now. I am meeting with a credit councelor tomorrow to seek out other options. Anyone look at debt reduction programs before filing for bk? The one I'm talking with tomororw is affiliated with the united way so they seem legiet.

[CAB_44]

ps...buy an American car, there are alot of good rebates / promotions right now.

Not looking to pick a fight here.....aa06
But my advice here would be different~
Buy a Toyota,Honda, or Nissan.... boiler704......they last more than 5 years........
I've never had any trouble when I bought ANY of these cars~
AND, you could even buy a used one and get a great car....
just make sure boiler704 that it is a certified one, and ask if it has been involved in ANY kind of a wreck......that's the only time you get into trouble when buying ANY vehicle that is used.....if it's been worked on from a wreck, it's a bomb (usually)....and you don't get as good of interest on a used one, but the lower cost equals out about the same...
just some thoughts...
I have bought american, from every maker.....every single one that I purchased in less than a year needed major repairs.......
Now, anytime I have purchased a Toyota, Hond, or Nissan...I have NEVER had to get any work done NONE~ the only reason why I traded was because they came out with a vehicle I liked more....not because of workmanship....
besides, their parts may be Japanese ...but...they are assembled in the USA....so it IS a good thing~ they just last longer....sorry guys~ but it's the truth....!!!!!!!!!!
My son had a Honda, loved it, but wanted a truck...so he bought a Ford F150....NOW he wishes he would've stuck with the Honda...he's had it just over a year...it's been in the shop 3 times with 2 minor things...1 MAJOR problem....that's rediculous, especially since it is a NEW vehicle....
anyway~ that's my take on that....

[CATCHMEIFYOUCAN]

Dont Do It !

hey, just a piece of advice, i tried one of those debt counseling agencys, a DMP, and almost go ripped off. after much research, and almost losing 3000 to them ! BK was the way to go, after all you are have to go to one anyways (but one that is approved by the courts!) and it only cost $50 bucks. Im going to send you another PM on this !

BE CAREFUL ! CATCHMEIFYOUCAN

[SinkingFast]

Personally, I wouldn't go with a DMP. There's no guarantee that all of your Creditors will opt in. If you have stragglers, that's payments you have to make outside the DMP.

DMP's look as bad on your Credit as Ch 13 without the protections. No Automatic Stay. Creditors can still harass you. Some agencies aren't timely with their payments which could void the whole agreement. Doesn't matter if the Trustee is late with a payment. Creditors can't argue with BK Court. It's Federal.

So what if you have to wait 9 months to a year to file?? Patience and time are the friends of BK Filers. The longer you wait, the harder it is for Creditors to prove fraud. Plus you can do things prior to filing that will prep you for living in Ch 13. Like getting your transportation issues squared away. Buy clothes. Get life insurance. Get your teeth fixed. Pay your attny and filing fees. Whatever you need that you won't be able to do once you're giving every penny of disposable income to the Trustee.

From the time you quit paying CC's, you'll have in the neighborhood of 6 months or so, at the soonest, before your Creditors will come after you legally. Sure you'll have to deal with Collectors' phone calls and letters. Get caller ID or an answering machine. Pick up when it's friends or family. Don't answer when it's not.

[aa06a47]

Not looking to pick a fight here.....aa06
But my advice here would be different~
Buy a Toyota,Honda, or Nissan.... boiler704......they last more than 5 years........
I've never had any trouble when I bought ANY of these cars~
AND, you could even buy a used one and get a great car....
just make sure boiler704 that it is a certified one, and ask if it has been involved in ANY kind of a wreck......that's the only time you get into trouble when buying ANY vehicle that is used.....if it's been worked on from a wreck, it's a bomb (usually)....and you don't get as good of interest on a used one, but the lower cost equals out about the same...
just some thoughts...
I have bought american, from every maker.....every single one that I purchased in less than a year needed major repairs.......
Now, anytime I have purchased a Toyota, Hond, or Nissan...I have NEVER had to get any work done NONE~ the only reason why I traded was because they came out with a vehicle I liked more....not because of workmanship....
besides, their parts may be Japanese ...but...they are assembled in the USA....so it IS a good thing~ they just last longer....sorry guys~ but it's the truth....!!!!!!!!!!
My son had a Honda, loved it, but wanted a truck...so he bought a Ford F150....NOW he wishes he would've stuck with the Honda...he's had it just over a year...it's been in the shop 3 times with 2 minor things...1 MAJOR problem....that's rediculous, especially since it is a NEW vehicle....
anyway~ that's my take on that....

CAB, everybody is entitled to there opinion. I'm not trying to pick a fight. I've had automobiles made in Japan to those made in America. I personally had as many problems with the Jap cars as I did the American cars. And yes, many foreign automakers now have mfg facilities in the USA. Too bad all the profits go back overseas to fund good paying jobs for there engineers / design teams / etc. At any rate, if your in the market for a new auto, most domestic makers are offering incentives / special financing / etc. I'm told Ford is even BK friendly.

Good luck in whatever you choose to purchase.

[aa06a47]

Personally, I wouldn't go with a DMP. There's no guarantee that all of your Creditors will opt in. If you have stragglers, that's payments you have to make outside the DMP.

DMP's look as bad on your Credit as Ch 13 without the protections. No Automatic Stay. Creditors can still harass you. Some agencies aren't timely with their payments which could void the whole agreement. Doesn't matter if the Trustee is late with a payment. Creditors can't argue with BK Court. It's Federal.

So what if you have to wait 9 months to a year to file?? Patience and time are the friends of BK Filers. The longer you wait, the harder it is for Creditors to prove fraud. Plus you can do things prior to filing that will prep you for living in Ch 13. Like getting your transportation issues squared away. Buy clothes. Get life insurance. Get your teeth fixed. Pay your attny and filing fees. Whatever you need that you won't be able to do once you're giving every penny of disposable income to the Trustee.

From the time you quit paying CC's, you'll have in the neighborhood of 6 months or so, at the soonest, before your Creditors will come after you legally. Sure you'll have to deal with Collectors' phone calls and letters. Get caller ID or an answering machine. Pick up when it's friends or family. Don't answer when it's not.

Most of the DMP's also pay more to the DMP than they pay to the creditors. My advice, file BK and get it over with. For every 1 success story with a DMP, there are 100 failures (actually, not sure I have ever heard of a success)

[anonymuse]

Not looking to pick a fight here.....aa06
But my advice here would be different~
Buy a Toyota,Honda, or Nissan.... boiler704......they last more than 5 years........
I've never had any trouble when I bought ANY of these cars~

Just my opinion--take it or leave it:

I've had a Nissan Altima since 1996 and it has 166K miles on it and the only thing that ever went wrong with it was a strut during the warranty period. Nissan Sentra before that was over 100K, think I had it for almost 10 years, and still was able to sell it them for $1500.

[CAB_44]

CAB, everybody is entitled to there opinion. I'm not trying to pick a fight.
Good luck in whatever you choose to purchase.

No! No! aa06!!! I didn't mean you were trying to pick a fight...I MEANT I wasn't tryin" LOLLOL~ yes, you are right...just opinions~ All is well....
I just didn't want you to think I was trying to pick a fight because I had a different opinion than you!! This is what makes the world go 'round!
It is a shame that the money goes back over there to SOME degree, however, our engineers have the SAME opportunities, yet we can't seem to make a car that runs and STAYS running without having to take it back to
the dealership every month or so....we just don't build them
as well as the Japanese....that's the truth...it is in every single car comsumer report magazine, and I have had the pleasure of seeing that one for myself~it is why Toyota, Honda are at the top, year after year....there is NO doubt that there are always a few lemons in any
pile, but they just have a lot FEWER lemons than we do it is very unfortunate.......
No worries~
Absolutely Boiler704.....good luck with whatever you choose~

As far as the DMP issue....SinkingFast is RIGHT ON in my opinion.....we ALMOST did that 2 years ago, and I am SO thankful that we DIDN'T do it...the gal that we talked with would never come up front with us about the fact that it was just like filing BK, except you were NOT protected like you are with BK.....and your CR IS RUINED anyway either way...but much better to go BK~
you are protected....
plus THEY GET MORE OF A Fee than an attorney does...she would've gotten almost twice as much fee, and it would've been more monthly on top of that~ I think you have more of a chance to repair your CR after the BK...it is what I'm seeing~
I have a 23 yr old son, that is also in your shoes Boiler704.... he is contemplating the same thing....they came and got his ATV last evening....he said he didn't expect that, after only been behind a few months...but anyway~ I feel for you~ I am having to watch my own son go through it too......
And we haven't filed yet, but are looking at a huge payback~ but I guess what ever happens is out of our hands~ hoping to file the end of this month~but it will be chap 13
Anyway~ good luck and I wish you the best~
CAB

[FilingOnMyOwn]

Now, here is where my advice will differ from some on this board. In my opinion, I would go out and buy a new vehical. Buy something with a payment on no more than 4-500 bucks. The reason I say this is 1) your credit is probably still good since you are current on payments, 2) Secured debt is allowed in bk. 3) A 10 year old car might not make it through the chapter 13 without major repairs / replacement needs. If you do it now, your going to be better prepared to make it the 5 years your in a chapter 13. 4) It should be easy to prove no fraud if your replacing a car that is 10 years old, especially if your going to go 4-6 months before filing.

That actually may be very good advice, many attorneys do recommend doing that prior to a 13. It will eat up your disposable income and make less money you have to pay back, and leave you with a better car with some equity in it once your plan is done... IF you buy the right car... sadly enough, American do not hold their value. If you are determined to file a chap 13, once you have explored all other options, I would buy a brand new Toyota Prius myself. They retain 60-70% of their value after 5 years when your plan would be completed, leaving you with LOTS of equity. They are the most fuel efficient vehicle sold so you'd save LOTS of money on gas, leaving you free to commute and travel over the course of your 13 payments, a big plus.

And on that note, if your credit is still good and IF housing is affordable, why not buy a house, IF you can get one with mortgage payments less than what you currently pay for rent. And you could always rent out extra bedrooms for extra cash...

You've gotten in way over your head, but there is a way out. Even being you will have to pay some back due to your income, thats not entirely a bad thing. Just having a decent job period is more than most bk'ers could ask for, and having to pay something back may teach you a valuable lesson about the casino... The odds are in the favor of the house, not you.

[CAB_44]

Just my opinion--take it or leave it:

I've had a Nissan Altima since 1996 and it has 166K miles on it and the only thing that ever went wrong with it was a strut during the warranty period. Nissan Sentra before that was over 100K, think I had it for almost 10 years, and still was able to sell it them for $1500.

WAHOO Anonymuse~ I purchased an Altima back early 06...we bought Nissan this time, because we like the look of them ~kind of tired about Camry's and accords~ their look~but they are the BEST cars~
I have really liked it~ hoping the Nissan's hold up like the Toyota and Honda~ our Honda is a 1993 Del Sol, when we bought it it had 125K miles on it.... and it still is goin' almost 155K ....not done anything except tires, and had the front end adjusted....awesome~ will probably have to give it up, as it is paid for and attorney says the trustee will look at it as an asset, and you can't have 4 cars..... I see their point, but dang....it costs 19.50 to fill it up and hubby drives it 4 days a week 70 miles round trip daily.....gets great gas, and runs great.....thought of giving it up really upsets me.....