BK vs Charge Off

[BKINAZ]

CAT interesting...thanks for the post.

[floridian]

yep, i guess i failed to factor in the big buck thing... if you are making big bucks, you can recover very quickly... im sure that the 35k that in ruining me, is just beer money for a lot of you...

[catleg]

I filed chapter 7 in '97, discharged in early '98, did a little do-it-yourself credit repair and got rid of all the negatives and the BK on all 3 credit reports within about 5 years. Got new credit cards from all the lenders I listed on my BK except for Amex, they don't want to play with me anymore, though I do have a corp card thru work with them.

BK is by far the best of the bad options, that is to say, paying less than in full.

Credit reporting really is the tail wagging the dog. I consider my major default as "monetizing" my credit score. :-)

[BKINAZ]

Ooooh...good catch columbo. lol

[ready2puke]

ok no one got this??? Or am I missing something

Again...I think that is where my question is coming from. Your friend is 9 yrs into it and still has credit issues. I can't help but believe I would cut that in half by settling and not filing 7? Also...again we can't file till Jan '09 so the stress we would be saving by filing would be amped up by waiting so long to file.

You say you can't file til Jan. 09? Didn't that come and go already? Unless I'm living in the twilight zone, this is April 09....

[BKINAZ]

WILL I think you will agree...having money allows you to buy more credit and improve your scores quicker.

CHAD mine is an educated guess...I think HHM could come in, or someone else and be more clear. Here's a small example...lets say I sell a collector car for $50,000 (no I did not) on January 1st. There is a question in this process as to whether you have sold any vehicles in the last 6 months....well four months out (beyond the 3 you mentioned) you have to claim it. 7 months out I am guessing you don't. If there is anything that sends up a red flag, the trustee can break out the microscope and ask for a couple years back...

But again if there aren't any large holes in your story, or if they don't look at your tax returns and say...hey where's that $70k mortgage account you closed out in January they will just ask for the 2-3 months...again...educated guess.

[floridian]

a good lawyer can make all the difference in the world.... my first lawyer that i gave 100 bucks to for advice, really steered me wrong... he said he could get me a 7 and i could keep all my stuff... he gave me some really bogus advice... i would have gladly taken a 7 at that point..

when i got a second opinion, i realized that id been hosed... he said to get ready to be fitted with a striped suit, because i was going to debtors prison in a 13..

after what i have learned here on this forum, i realize the first lawyer was sniffing glue!

[LuciluS]

Our Attorney told my husband and I filing Bankruptcy would benefit our Credit Scores, instead of negotiating with the Credit Cards.

He also stated if we did negotiate with them, we would receive a 1099 for the difference and have to pay taxes.

We met with out Attorney in late Sept. 08 and stopped paying credit cards immediately. When the credit cards companies started calling, I just gave them our Attorney's name, address and phone number. Then, I told them something I shouldn't have...said we would be filing Chapter 7 in Feb. 09.

Our Attorney didn't look at our total income and I received A Settlement in February, so we are going to file Sept. 09 using Mar-Aug income.

The calls started again in early March. This time, I had a good excuse...diagnosed with skin cancer. Told them such and all of them again were very nice and again, gave them Attorney's name, address and phone number.

I have received two collection letters. When I got the first one, I faxed it to our Attorney. He emailed me back and stated for $60 he could file something in Court which would give us time to get our Bankruptcy filed.

I know we've paid back what we charged plus some. So why would I won't to negotiate with them and get stuck paying additional monies (Federal & State taxes) when I've already paid them?

Like someone said on this message board. Filing bankruptcy is a Business Decision and I've lived by that phrase ever since. I know longer cry or worry. I'm planning our Bankruptcy! Peace? I've got it. Phone Calls? I answer them if I'm not in pain due to my disability.

FICO scores? there are So MANY more people filing Bankruptcy than ever before in our History. I believe there will be some new system put in place for Credit Reports and FICO unless the Federal Government bails out all the Credit Card Companies, which I Pray doesn't happen. That's just my opinion.

Peace of Mind? Hubby is an Over The Road Truck Driver, so it would be Me negotiating with Credit Cards Cos. IMHO, I think it is easier to handle the phone calls for non-payment, than to go back & forth, back & forth in Negotiations and pay out more monies.


Luci

[willbfree]

chad9162 a Ch 7 stays for 10 years from the date of your bk discharge. My friend has not completed the full 10 years yet so the bk is still on his credit report AND my point being is that there is life and credit after a bk.

[floridian]

as i stated, hes been out for 9 years, not 10...

hes got a good state job and a higher than median income, with perfect payment history both pre and post bk.. the point is, that even though his 10 years is almost up, hes still catches a degree of negativity... he recently tried to buy his mother a mobile home and was rejected due to the bk...

yes hes got a new vehicle and was able to buy a new home and has credit cards... but he says it still causes him grief from time to time..

we have discussed his situation for a long time and i have followed his case and a neighbor who was discharged last year... both told me, that when you check the bk box on a credit app, bad things happen...

this is in florida and maybe others mileage will vary... im just saying...

even my lawyer said that if i can avoid getting sued that my credit will heal in 4-5 years.... these are just my observations..

[chad9162]

If he's 10 years post Chap 7 then it shouldnt be on his credit report so I'm not following your point. Floridian your point is confusing as well. On one hand you say Chap 7 is best but then give a terrible story about your friend. If this is the case then why recommend Chap 7.

BKINAZ....One year look back? I'm confused...90 days prior its assumed to abuse or fraud but you could still explain. Also doesn't the creditor have to complain or does the trustee just dismiss your case?

[willbfree]

Floridian I have a DF who is 10 years post Ch 7 and no problem with credit. New house, two trucks, a car, credit cards etc all post bk. Of course they have a good job with income about $75K a year too. I have been trying to encourage more savings but you would never know they have filed bk from their ability to obtain any loan. I would hope a perfect credit history prior to bk and then continue the perfect post bk payments will stand for something in the long term with a FICO score and ability to obtain a loan in a couple of years.

[BKINAZ]

i would say that if you can get a 7, you are better off, due to the stress factor.... my bud is 9 years from his 7 and has perfect pay records... the 7 still haunts him when he applies for credit...

Again...I think that is where my question is coming from. Your friend is 9 yrs into it and still has credit issues. I can't help but believe I would cut that in half by settling and not filing 7? Also...again we can't file till Jan '09 so the stress we would be saving by filing would be amped up by waiting so long to file.

[BKINAZ]

Probably missed this point, but why can't you file for another 8 months?

I'm preventing a year look back...I have things I can explain that I would rather not. With that said in January they will have no cause to go further back than 3-6 months with our records.

[floridian]

i would say that if you can get a 7, you are better off, due to the stress factor... some people seem to recover right away from what im reading here, but people i know personally have had major problems.... my bud is 9 years from his 7 and has perfect pay records... the 7 still haunts him when he applies for credit..

if its a 13, thats nothing more than state supported debtors prison, with a trustee instead of a warden... BTW, im not the only one who feels this way.. i just read a newspaper article by a well known author who feels the same way..