Need some opinions...

[041779]

I've been reading this forum for some time now ever since I first considered bankruptcy. I finally went to the lawyer near where I live and have all the documents ready I just have to go down and pay the fee.

I'm a bit reluctant however considering the low amount of debt I have compared to others I've read about. I really only have about 35K worth 8k of that being student loans, 13k being a car (that I would reaffirm) and the other 14 is unsecured. I had no problem paying back the debt until I was discharged last summer from the military and was unemployed for some time. I get some VA benefits and a little bit of income from the only job I found, but I'm so backed up on payments and with the huge interest rates they of course charge for not paying that at my current income and any increases in the foreseeable future I'd never be able to pay it off any time soon.

I wrote the creditors and explained my situation. They, of course, didn't care. I'm now getting voice mails about litigation, etc. My credit is in the toilet and with judgement(s) it would only get worse.

I'm trying to fix this up before it gets completely out of hand. I paid my accounts before with no issue, but then I became unemployed and they act like I ran up the accounts and then just stopped paying (which isn't the case at all).

Anyway, I've considered chapter 7 because I don't have any disposable income.

Considering the relatively low amount of unsecured debt (14K) and the judgment stuff, what would you experienced people do or have to say about the situation?

Thanks.

[coma]

It is a low amount to me, but everything';s relative. BK is a button you canonly push basically once every 8 years, so you've got to really make sure this is rightt for you. You can get some more consults and see what the lawyers say.

If you don't mind me asking (and please don't answer if you don't want to), but were you medically discharged? If you were, at what percentage? there's lots of money out there for disabled vets. I work in a program that helps OEF/OIF vets who are disabled, and maybe there's something I can do.

[debtmonster]

opinion

If you wanted my opinion, I personally wouldn't go bankrupt on such a small amount unless you were a senior living on fixed income and maybe 70 years old or something.

My mom filed bankruptcy around 1991-1992 or so on only $20k of debt. I remember living with her back then hearing the answering machine go off every day. She got so many bill collectors hounding her daily that to this very day, she doesn't like to answer the phone. I'm lucky to hear her voice 1 in 10 times when I call her. The bill collectors have done permanent psychological damage to her over all of the years of hounding. She told me going bankrupt was the best thing they ever did. She ended up getting a new house that was $50k more than the one she had before. About 3-4 years later, she sold that house for one twice the price. She totally came out clean and has great credit now.

I probably have almost 10x the debt racked up that you do and I'm reluctant to file myself. But it's getting to the point where I may have no choice. We're home owner's no and we're not going anywhere soon... (maybe.) I've been bugging my wife to leave the country, but she doesn't want to do it... so we'll have to stay here and take the beating.

[HHM]

Debtmonster...coming from someone whose plan is to flee to another country and wait out the SOL, I don't think you should be throwing out advice on when and if someone should be filing BK until you have done so.

Debt is relative, the "average" debt discharged in chapter 7 is $40,000.

If you can't make payments, you can't make payments and it depends on the individual circumstance, if you really think about it, a person earning $30,000 per year and has $30,000 in debt (100% of their annual income in debt) is far worse off than someone making $60,000 per year and $40K in debt, (66% of their annual income in debt).

This board is about being proactive with your debt, to take action to IMPROVE you situation, and for many people that means BK. BK is a way to get back on your financial feet. It really does not matter how much or how little your debt is, the real question is will BK solve the problem...and frankly, for most people, it does.

[debtmonster]

Yep... that is correct. It's only my opinion and not advice.

As of now, I think it's worse. We make maybe a net of $24k after taxes and probably have $100k+ in unsecured debt once the other 2 cars we have are repo'd.

We'll talk about that in another message.

Thanks.

[keepmine]

I wouldn't file over $14K. The basic problem here is not debt but, income. I'd suggest you take all possible steps to raise your income-get a pt/weekend job if you have too.
When did you last pay the credit cards? Have you inquired about hardship plans?

[041779]

Coma.. I didn't get a medical discharge and the VA benefits I get are for education.

I already have packed schedule with two days going to school full time (and bringing in $1250 for doing so) and an almost full time job at about 35 or more hours a week but hardly ever over forty.

I was paying them regularly until late last summer when it became apparent that I had been used by a so called friend. I had made plans for after my discharge and when I moved back to where I was from ended up paying 5 months worth of rent I couldn't afford because I trusted someone who I had to eventually change the locks on. It was a mess. All that also created the mess I'm in since I got backed up. I was just barely making it with the plans and money I had saved but ended up getting screwed by this dude. I'd sue him, but I've since then discovered why no cars were in his name and why he was always using someone else's credit cards.

Anyway, my income isn't going to go up but I do plan on making my cost of living down by moving elsewhere. I have reviewed other options for payment but even with them I'd not be able to afford the minimum payments.

I have a limited time in which to use my VA benefits and fear that If I were to get a full time job I'd never get back to school. Also, I can't imagine how easy it would be to get a full time job considering I spent months looking for a part time one in this city (atlanta).

I looked into consolidation loans but no one would approve me.

I'm just trying to take care of this before it gets way out of hand. I can't see where I'd be able to make the minimum payments especially after they've gone unpaid and racked up fees and interests. And during this whole fiasco I ran up another credit card to make ends meet, going to a federal cast to which I was summoned and even to pay the rent half one time.

My income is looks like it'll be around 25K unless I can find some other sources.


Anywhos, I can't see a situation where I'd even be able to make a dent in the past due and then the min due after that.

I had planned to just wait it out till I could get some money coming in but then I started getting stuff about litigation from various folks.

Also I don't wanna keep making the situation worse by adding to the debt because of my attempts to both survive and pay off the previous dept.

[CindyLou]

Ask yourself a couple of questions:

Are you judgement proof? If the answer if yes, then you are under no pressure to file. Meaning if you have no money or property a creditor can take then you really have no strong reason to file. You don't mention what state you are in. Some states allow for garnishments and some don't. You mention that you are unemployed. Do you intend on going back to work? Remember, creditors can get all the judgements they won't, but they have to be able to collect on them for it to matter.

If you are judgement proof BUT have a strong possibiity to improve your financial situation in the future, then fiiling may still be a good solution, as you may not need to "pull the BK card again."

If you are judgement proof and do not see your financial situation improving, then fiiling may not be a good option because if you get yourself in another hole with medical bills or another emergency then your BK card is used up.

In summary, don't use BK just to feel better. Use it as a wise personal financial strategy business decision and use it at the right time. Now might be the right time....but it might not be. Only you can decide what is right for you and I just wanted to give you some things to think about.

[CindyLou]

oops, I just noticed that you said you are working. I guess the answer lies in whether your state allow garnishments or not. What state are you in?

[041779]

I'm in Georgia. If it weren't for the debts I have to repay then I'd be breaking right about even with my VA and job income.

I did consider the judgment proof thing.. I suppose I am that since I don't own any real property. I don't want it to come back and haunt me though later on.

The one thing that had me worried was I read somewhere that in GA they can put a lean on personal property as well.

Also I'm interested in improving credit as best I can.

If I were to declare then I'd certainly have a better financial future.
If I were to not, even with whatever anticipated income increase, I'd most certainly remain in this bad situation if not a worse one.

[debtmonster]

I own a home and have 2 cars left. I don't have a 401k, or stocks or any kind of savings. My house is the only decent asset I have. Both cars were financed as new. One is just over a year old and the other was bought in August 07.

Do you think I am judgement proof? Neither me nor my wife have a job and are not collecting unemployment.

[PaKettle]

I agree with what cindylynnsmith said - if you can get through this without bankruptcy, if there is no garnishment in your state and nothing they can take from you, then you might be better off not filing.

But in a way I can see your wanting to just get a fresh start which is what bankruptcy is all about.

The one thing, though, is that it's VERY very important that you figure out a way to save money for emergencies, and improve your financial situation - get a job with insurance, get a job that will allow you to "get ahead", save money, get somewhere... Otherwise you could really get in a jam and not be able to file bankruptcy again. Part of the thing about bankruptcy is that if you're not careful you can find yourself right back in hot water and with no escape valve this time.

If you can really use it to get a fresh start and get on your feet, and get ahead, then do it.

[danaf]

Hi 041779 - Do you have medical insurance? If not, then maybe I'd wait this thing out as long as I could (ie until your wages get garnished). Because while you sound young and healthy, one never knows what may happen (and believe me, I'm in your court - not wishing you any will-ill) - just trying to think outside the box for your particular situation. If something were to happen you can bk medical bills. I am a vet too and when I got out, I had access to any VA Hospital although I luckily didn't need it. But somewhere along the line, they changed that benefit and I don't know if they offer it to service members today who separate before retirement? Just a thought - otherwise I'd say go ahead and do the bk.

[041779]

You can apply for health benefits and they will grant depending on certain situations.

I applied and they found me poor enough to provide coverage.

It varies on all sorts of things though and has to be verified every year. Meaning, they review your situation again.