Bankruptcy, Finally

[lilacs80]

Hi Everyone,

I'm a newbie to this forum. I've been in debt ever since college, but never out of control until the last couple of years. I haven't worked in almost 2 years and my husband is the only one with the source of income. Even with me not working, we've always managed to pay my bills and everything else, minimum payments though. But nevertheless, bills were being paid. For the last several months, I've been seriously contemplating filing for bankruptcy as an individual. All these debts are under my name solely and many of which I've had even before getting married. My husband and I have kept our debts separate so we don't have anything joint together. I have 50K worth of debt, haven't worked in nearly 2 years, no income under my name, don't own anything, no house. Will I be denied for bankruptcy? I've read online that people can be denied. It's not fair to my husband that he keeps making ends meet because of my debts and I'm drowning the both of us. So this is something I've been considering for a long time and it's something I'm finally going to do. It's not something I'm proud of, but it's something I rather do than have everyone else drown with me. Anyone with a similar situation as me? What can I expect? Will my bankruptcy drag my husband down somehow? Any insight would be appreciated. I'm meeting with the lawyer tomorrow.

[lalap123]

Wow, I could have written this post two years ago. My situation is very similar to yours, with the exception of having three kids and realizing what the burden of paying off my debt would be on them (the things I wouldn't be able to do for them as well as them having to feel my stress). I've also had debt since college and didn't realize I was maxed out at until around $70,000. That was two years ago. I was making a great salary, so with my husband's salary we could afford to make all minimum payments and pay for childcare even though there wasn't much left over. Then child #3 came along, and I held on to my job thinking we could make it work, but the payments caught up with us once we had three children in childcare.

I left my full-time job in May 2008 thinking my company would contract me back at a higher pay rate and that I could add a part-time job as well, thereby making a dent in the payments. Of course that was right before the bottom fell out of the economy. I haven't been able to find much work at all and realized in December 2008 that bankruptcy was my only option. I just filed two weeks ago, and although it's been difficult in many ways I realize that nothing can compare to the burden of having that much debt and shelling out so much money each month.

If you want some more insights into filing individually and some of the issues that have come up for us, you can send me a private message.

Good luck!

[lilacs80]

Hi there,

I met the bk lawyer this morning. He went through my case with me and says there should be no problem in filing the bankruptcy. The only thing is we have to decide whether filing as an individual or as joint. I originally wanted to file as an individual but after speaking with the lawyer, it seems more beneficial to do this as joint.

Also, in the meantime I have 2 credit card payments that are 10 days over due. Should go ahead make the minimal payments on them until I get the ball rolling on this bankruptcy? Nevertheless, I have to call the credit card companies because they've calling me off the hook. I just haven't called them back yet because I'm not sure if I should pay them or not. Suggestions, advice, please.

Thanks!

[momofthree]

Paying them now will be throwing your money away.

[lalap123]

I second that sentiment. If you can handle either not answering the phone or simply telling your creditors that you're having a rough time right now, then I'd suggest just not making the payments and toughing it out. You could use that money to pay the attorney. I actually did make some payments here and there for about two months after I'd stopped paying my cards, mostly based on who was most aggressive...now of course it's all water under the bridge and I wish I'd saved that money.

If you are certain that you'll file soon, just try to avoid their calls or simply tell them that you'll be filing. Ask your atty whether or not they'll take creditor calls after paying a retainer (some require payment in full). I retained my attorney in May 09 and literally didn't get one more phone call. I just filed on 2/16/10 - that's eight months!

[lalap123]

I also chose to get a pre-paid cell phone and changed my number with the credit card companies to avoid getting calls at home or on my cell when others were around (family or friends). It was well worth the investment.

[lilacs80]

WOW! I'm so glad I asked about the credit cards. Actually I've meaning to call them and close out the cards and get them set up on payment plans. But a nudging feeling in me kept telling me to wait it out until I met up with the BK lawyer. The lawyer had said to me why I didn't look for him sooner. We used to live in a flat that cost 1450 a month. And we've moved into a smaller, older apartment in the suburbs just over the holidays for 930 a month in attempt to lower our expenses. He told me that we have to be able to show substantial proof that there is absolutely no money left over once the daily expenses are paid aside from the credit card bills. So I'm glad I asked the credit card question here because I didn't make the association until I read all your replies. Right now, the min payment on card #1 is $530 and card #2 is $250. If I had closed them and put them on one of those payment plans that they are offering, it would've lowered the APR on the cards and thereby lowering my monthly payments by half.

Lalap123 - That is a very suggestion with the change of phone number and getting pre-paid cell phone. It's definitely something I will look into.

Before I make any mistakes, should I stop using the credit cards at this point? I haven't used them in a while since there is hardly any available credit on any of them.

[mtbc]

Personally, I'd stop using them -- if you've made some minimum payments since last charging them, then it doesn't too much look like you used them at a time you knew you'd not be paying off the balance someday.

[lilacs80]

Oh good. Phew~~~~I haven't used them at all. And I did make payments on all my cards except the 2 cards I mentioned which is 10 days late as of now because the min payments are high.

I have another question that just came to my head. When I turned 18, my dad put me down as an authorized signer on one of his credit cards to help me build credit. When I checked my credit report 3 years ago, that was still showing up on my credit report. I have never used that card ever so it still showed an available credit line. But that card may be inactive now because I don't think my dad even uses it. So my question is will he find out that I've filed for bankruptcy? I don't plan on telling him and I don't want him to find out. I haven't checked my credit report 3 years so I'm going to request a copy of my credit report tomorrow. If that card still shows up on my credit report, is there a way I can have myself removed as an authorized signer? And will me filing for bankruptcy show up on his credit report if I am not removed as an authorized signer? Help please!

[SMinGA]

If you're an authorized user then you have no responsibility for the card of your dads, and don't need to list it as a debt/account. If you're a joint user - you do.

By the way, CA is a community property state - so any debts/assets acquired since you got married are jointly yours & your husband's even if he is not named on the debts/you are not named on the assets. For accounts that you had prior to marriage but used after, they would be joint debt also. That is probably why the attorney said its best to file jointly. If you file on your own, those creditors could still go after your husband.

[lilacs80]

Sminga - Thanks for your reply. We've decided to file as joint. I guess now, I'm just worried about that authorized signer situation. The card doesn't have an outstanding balance and I have never used it. Now that I know I don't need to list that card down as a debt, will I still show up on dad's credit report that the authorized signer is bankrupt? Will my bankruptcy be reported to my dad's credit report? Can he even see my credit score on his credit report since I'm an authorized signer?

[SMinGA]

An easy one - nothing about you shows on your dad's credit report for the AU card. Just the opposite: his account shows on your credit report.

Since the account is not your obligation, it will not be reported as included in bankrtuptcy to the creditor or your father.

[lilacs80]

Sminga - Thank you so much for your reply! I am so relieved to hear that. Deep breath. I could not sleep all night thinking and worrying about this.

[lilacs80]

Hi everyone,

So today, I went in to see my BK attorney again to get this BK thing on the road. I asked him about my authorized signer situation, he told me that I have to get my dad to call in to remove me as an authorized signer even if the account doesn't have a balance and is dormant. He explained to me that we want to be preventative and not take any chances. And since I don't plan on telling my dad about the bankruptcy and don't want him to ever find out, my BK status may or may not show up or may or may not affect him, but why take the chance. He says sh*t happens all the time, and people make mistake of reporting things when it's not necessary or required so don't take the chance and put myself in the situation of the possibility that a fluke may happen.

Anyways, he told me to call my dad and just tell him to remove me as an authorized signer because my CPA advise me to do so and if he ask why....to simply tell him that since that line of credit is dormant and I'm only an authorized signer that it's best to have me removed. It's affecting my credit score and having it removed will bump it up.

Any thoughts on this guys? Any other explanations or reasons I could use aside from his? My dad may ask me why would my CPA pull my credit report and such....what should I answer?

Thanks!

[bulletproof77]

And why is telling your father the truth a bad thing ? We have all been through the anxiety of filing Chapter 7. It's not something anyone "loves" to do. It's financial survival for most. Instead of figuring out white lies, perhaps an honest talk with your dad might help. If he doesn't understand, well that's not your issue..