It's time........

[backtoblack]

First of all, I am an idiot. When I was 22 I received a ton of money from a lawsuit over my mothers death. I spent it all and some, and am now between a rock and a hard place.

I am 28 now making ok money as a server/bar tender and attending school. The last three years have taught me a lot about life: I have learned the value of a dollar, I now know that I do want to get married and have children, it's difficult to establish relationships when you are not fiscally responsible.

It wasn't until the middle of last year, when I was in my first real relationship, that living with a "I really don't care attitude" wasn't going to work in the long run. No credit equals: no house, no new car, and always having to look over your shoulder.

I am not totally sure what I should do. I owe $20,000 in unsecured debt and $35,000 in private-lender school loans from 5 years ago. I make about $35,000 per year but will take a drastic cut in pay once school starts in late August. I will drop down to about $24,000 per year while in school. I am under the median but with 2 other roommates I don't see how I could not have any disposable income then falling into Chapter 13.

I have not payed anything for three years............

Many creditors are reaching the four year period while one has sued me. I want to pay everyone back but everything is in junk status. Some of these guys are so sketchy and my debt is getting resold all of the time. My income can also fluctuate a lot depending on what shifts I work and what season I am in. If I get hurt, I make no money.

My depression is over and now I find it easy to concentrate on what I need to do. Is it worth filing for Chapter 7 or just go ahead and try to pay everything off. Would a lawyer help me in corralling all of my creditors or just try to pick them off one by one?

Thanks in advance everyone.

[deeptrouble]

wow.. i wish i could help you, but you should definitely go talk to 3-4 lawyers for a free initial consultation.

[JRScott]

Okay you've taken the first big step, realizing that there is a problem and you need help .

Now for a bit of bad news. As far as I know Student Loans, even ones from private lenders, currently cannot be discharged in a bankruptcy. Are you going back to school or are you teaching? Sounds like you are back in school, anyway to get these into deferment since you are back in school?

The problem with settling with the credit cards is that you can be held liable for taxes on any forgiven amount over 600 dollars. They would mail you 1099s on the forgiven amount and you'd have to pay taxes on it at the end of the year.

Ideally you would want to wait to file until the income in the last 6 months prior to filing was at its lowest point. However if the Credit Cards are coming after you that might not be possible for you.

You should schedule a few free consultations with local bankruptcy attorneys. They could look over your situation and give you additional feedback.

[backtoblack]

Thanks for the replies. I will be having several consultations next week to see what are my feasible options. I will let everyone know how it all went.

Thanks again.

[JRScott]

You're welcome

Good Luck to you

[guzzie]

you're not an idiot...no one on here is....good luck to you...guzzie

[SinkingFast]

Keep in mind,............ BK attnys are gonna give you a BK slanted point of view.

You said you hadn't paid your Creditors in 3 years and one has sued.

What State do you live in?? Are all the accts CC's/Open/Revolving Credit accts??

Knowing what State and what types of accts we're looking at here will help us help you. The State affects the SOL on various types of Contracts and if your wages can be garnished or not.

You may live in a State that does not allow for wage garnishments. If you don't own any property, there's nothing to attach. And at 3 years, you may have hit or be close to the SOL on the original debts.

You may want/need to file BK some day. Down the road when you're getting close to graduating and working professionally in your career field. Creditors will lay in wait until you do start making money and have something to seize. But until then, you may be fairly Judgement Proof. If so, you can wait, plan, and pick your time.