Overwhelmed - Please Advise

[SMinGA]

NO.

Assuming you have not paid in 1 year, all your accounts are charged off. They cannot go back into a paid as agreed status. You might even make credit score worse, if they keep updating to a new 'date of last activity' with each payment. Could make your score look like they are newly charged off accounts.

In time, those accounts will have less impact on your score. And once no balance is owed on them - that will help. Whether that is BK discharge or you have paid them in full.

Thanks for the replies...

The only other option I have been considering is setting up loan consolidation or working out a monthly payment plan with my credit cards for the $75k in credit cards. My credit score is 555, so if I begin monthly payments again on my credit cards at least my credit score with start improving again, right?

[SMinGA]

The means test is only part of the process. If you really have $700 a month left each month, and try to file a ch. 7 then you're going to have trouble. And any atty that would submit a ch. 7 petition showing $700 difference between schedules I (income) and J (expenses) should be disbarred. The only possible reasons could be a) stupidity or b) he knows it won't work and then he'll get to charge you more fees to convert to a 13.

Means test does not require you to go over expenses if you are below median. The means test is not the only factor in determining whether or not you can file a ch. 7 easily. If you are higher income, it makes it harder because unless you have unusual circumstances (high medical, for example). Lower income still has to show a need for the ch 7 by comparing income & expenses. And if you did not discuss budget with the atty, he is perhaps assuming you do not have disposable income. You would need to discuss your budget with the atty - there may be things you are leaving out/not thinking of.

SMinGA - I spoke with a MA attorney (the state where I live) and the means test is that I can't have made above 26k in the past 6 months. I pass this test.

I am assuming the attorney is correct that I qualify?? He didn't say anything about my current budget.

[SNC]

SMinGA - I spoke with a MA attorney (the state where I live) and the means test is that I can't have made above 26k in the past 6 months. I pass this test.

I am assuming the attorney is correct that I qualify?? He didn't say anything about my current budget.

[SNC]

Reply

Thanks for the replies...

The only other option I have been considering is setting up loan consolidation or working out a monthly payment plan with my credit cards for the $75k in credit cards. My credit score is 555, so if I begin monthly payments again on my credit cards at least my credit score with start improving again, right?

My only concern with starting to pay my credit cards again, however, is that since I am temporarily employed only until mid-September, I could become unemployed again mid-September for who knows how long. In the scenerio that I become unemployed again, I would begin facing the situation again where I may be unable to make the monthly credit card payments.

Would love anyone's input...

[SMinGA]

At the moment - you may not be able to file ch. 7. Not if you ReALLY have $700 left after paying living expenses. That is too much DMI for a ch. 7. But then again, facing an uncertain employment future means you might not want to go into a ch. 13 right now either.

Do you really have $700/mo left? Are there possibly holes in that budget, things you should count but have not? Like occasional vehicle maintenance, and any other items that come up but may not be as regular as groceries & gas.

You have a lawsuit from a creditor - where in the process is that? If you can delay things for a few months, that would be good. If you end up back on unemployment then your income will drop - DMI will drop and ch. 7 will probably be easy to do. If you're facing imminent garnishment or bank account levy-you need to do something NOW or could end up with a large chunk of your net pay gone. Don't want that to happen. If you really DO have $700 (or even $100+) remaining each month, you will likely not be able to file ch. 7. But might want to talk to an atty about filing ch. 13, and discuss options on converting to 7 if/when your income situation declines.

The vehicle should not be an issue - and having some cash on hand (after paying atty fees) may not be a problem depending on what state you are in. Each has exemptions allowing you to protect some things. Regardless, it would be a good idea to meet with a couple of different attys and discuss your situation, your options. Do not plan to hire one on the spot - don't be pressured into leaving a retainer. You are hiring them - make sure you find an atty who will listen to you, and work for you.

[iv65536]

I would consider using some of the savings and paying down or paying off the student loans, since they are much harder to discharge than credit cards. It's that much less in savings that you will have to exempt.

As for the rest of your savings, I would use that to pay the BK expenses, and before filing, take care of various needs that have been deferred (doctor, dentist, eyeglasses, etc.)

[lmaosm]

Would you file Chapter 7 if you were in my shoes?

I would greatly appreciate any advice... I am consulting with an attorney but still feel reluctant to file chapter 7 bankruptcy. I'm just scared of how it will affect my credit score afterwards.

Here's my situation:

1. Have $75k credit card debt, $4k in student loans
2. Have not paid credit cards in about a year (due to unemployment) and one creditor is filing a law suit against me
3. I'm 33 years old
4. Had great credit ($0balance) until about 2 1/2 years ago which was the beginning of using my credit cards to pay for my monthly expenses (due to multiple periods of unemployment) and began incurring large amounts of medical debt
5. Am now employed as a Recruiter (began three months ago), but this is a temporary job that ends this mid-September (meaning I could once again be unemployed beginning in mid-September).
6. Have a current budge that leaves me with about $700 left over each month (this budget does not include putting any money toward savings or paying any amount on credit cards)
7. Have no assets aside from '99 civic
8. Have $5k saved in my savings account
9. Don't have a retirement account
10. I pass my state's mean's test for Chapter 7
11. Feel extremely anxious and depressed over financial situation

Would you file for Chapter 7 if you were in my shoes?

Thanks for your help!!

Dude don't be afraid of filing for Chapter 7.

Your credit is OBVIOUSLY hit by the fact you haven't paid in a year, so Chapter 7 isn't going to make things worse IMHO.

Go to a reputable attorney and consult your status, (+ - $75.00), but have your information in a summary form to assist the review process.

Chapter 7 fees are + - 2.5k to $3k for filing. You have $5k, so you can do this, but find a recommended bankruptcy attorney that has at least 15 years of experience in doing Chapter 7.

Be detailed (disclose all to your attorney) and efficient with your information as time is something you want to minimize in the process.

The student loan is a secured loan, so that can't be included in your Chapter 7 filing, but you can request deferred payment. I wouldn't defer until after the filing, if necessary. In fact, I would do anything to drastically improve my financial status until filing. In other words, your only goal should be filing Chapter 7 within the minimum time required.

R&S are exempt of Chapter 7, so I'd put $1K in a IRA and start contributing some of that $700.00 "surplus", e.g. $200.00 a month in it.

Kelly Blue Book is the guide for the value of your Honda Civic, which isn't going to really impact your test IMHO.

Just get the ball rolling before lawsuits require an attorney to defend you, and move on with your happy new life.

Be very organized and document everything handed to your attorney (make copies and have the attorney's secretary sign receipt of your information on your copies).

No big deal IMHO!

(The above is my opinion only taking into consideration the limited information that you posted, and you'll have to conclude your own opinion once you consult with a bankruptcy attorney.)

[ryan]

You are scared how BK will affect your credit score? I have news for you, your credit score is trashed already. Why? Because you have $75000 in credit cards you haven't paid in a year!.. I think you need to face reality.

BK looks like a no-brainer to me, in your case, particularly if you qualify for a 7.

[SNC]

Would you file Chapter 7 if you were in my shoes?

I would greatly appreciate any advice... I am consulting with an attorney but still feel reluctant to file chapter 7 bankruptcy. I'm just scared of how it will affect my credit score afterwards.

Here's my situation:

1. Have $75k credit card debt, $4k in student loans
2. Have not paid credit cards in about a year (due to unemployment) and one creditor is filing a law suit against me
3. I'm 33 years old
4. Had great credit ($0balance) until about 2 1/2 years ago which was the beginning of using my credit cards to pay for my monthly expenses (due to multiple periods of unemployment) and began incurring large amounts of medical debt
5. Am now employed as a Recruiter (began three months ago), but this is a temporary job that ends this mid-September (meaning I could once again be unemployed beginning in mid-September).
6. Have a current budge that leaves me with about $700 left over each month (this budget does not include putting any money toward savings or paying any amount on credit cards)
7. Have no assets aside from '99 civic
8. Have $5k saved in my savings account
9. Don't have a retirement account
10. I pass my state's mean's test for Chapter 7
11. Feel extremely anxious and depressed over financial situation

Would you file for Chapter 7 if you were in my shoes?

Thanks for your help!!