Livin' la vida sin credit in a nice pre-BK limbo, why would I even file?

[nozar]

Good luck on that "strategy"

I talked to my BK attorney and they advised to wait things out because in ~2 more years, the statute will expire.

They didn't say what to do if I do get sued by one of my several creditors. Settling with them will qualify as preferential payment. If I want to file after that, then what?

[justbroke]

I would say this. Never try that tactic with an HOA/COA. It would just add to the bill. In fact, they get to bill you at corporate attorney rates and are not shy about "answering" your questions with a $20,000 bill.

[shipo]

You can also be proactive and dispute the debt before it goes to trial. Dispute any billing statement from the creditor. Write a letter to the CEO of the CC company and demand a copy of the original contract with them. The more paper work you have to evidence your dispute the better. This will give you additional leverage in a potential debt collector lawsuit.

Dispute, deny, never conceed to anything. Make them prove their case every step of the way. Thats the original american way (presumed innocent)

Maybe it is just me and my ethics and morals, but I think the above is horrible advice.

[bornfree2]

You can also be proactive and dispute the debt before it goes to trial. Dispute any billing statement from the creditor. Write a letter to the CEO of the CC company and demand a copy of the original contract with them. The more paper work you have to evidence your dispute the better. This will give you additional leverage in a potential debt collector lawsuit.

Dispute, deny, never conceed to anything. Make them prove their case every step of the way. Thats the original american way (presumed innocent)

[dieselman]

Good luck on that "strategy"..... Your creditors will find you and extract every last dime from you.... Please keep the rest of us rubes posted. LOL!!!

BTW congrats on that 450 FICO score....

[Carmella]

I imagine the pandemic has something to do with the delay from the creditors. They really do take a long time. They will send letters to settle and then they will have collection agencies come after you and then they will sue you. Everything has been delayed with the pandemic, courts were closed and people were either working at home or not working in office jobs. People are starting to go back into the work places. One of my friends works at the courts and they are just bringing more support people back to work now.

It took over a year for me to get sued under normal circumstances.

[nozar]

I'd file bankruptcy and just get it one and done.

Totally agree. Unfortunately, I'm due a very large refund, and the IRS still hasn't responded to my tax return. They said it would take until Feb, then June, then August...

I think you're grossly underestimating how miserable life will be with debt collectors hounding you unless you leave the US for good.

Since I asked creditors to talk to my attorney last year, I haven't received any calls, and I only got like one letter from AMEX offering a settlement. No court summons or anything like that. I stopped paying loan and credit card debts in April 2020. In the meantime my credit score has been inching up from 380 in Jan to 450 now.

Question: how exactly does it help me to leave the US "for good"? How would creditors "hound" me? I don't care if my virtual mailbox receives letters, or if my VOIP number receives calls. Will they hire bounty hunters?

If you make Bitcoin fortune, buy a house in California on Jan 1 2021 and use California's newly expanded homestead exemption and then make it your primary residence.

Isn't there a federal requirement that the residence must have been purchased at least 40 months before filing, in order for it to qualify as an exemption?

[Carmella]

Yes they will sue you. First they will send letters after they sell your debt to collectors. Then eventually you will get summoned by the court. My husband and I were sued by maybe 5 or 6 cards and we had a few pretrials and were able to stall the process. We procrastinated filing. It was really due to emotional stress and not understanding more about BK. I wish I knew of this forum back then because it's very helpful.

So you can drag it out and you can respond to the request from the court on day 28 or 29 and then go to a pretrial and stall a while. Lawyers from the creditors will try to offer you a deal to pay off the debt which you can stall and set up another pretrial. I do not recommend this at all. This is what we went through.

If filing is inevitable just do it sooner than later. You will be sued the creditors just won't forgive your debt. I only debt with credit card debt. I am not sure how the Medical debt would be handled. But if they sue you, you will have to pay up.

[flashoflight]

If I don't file, will creditors eventually sue me, even though they stopped calling long ago?

If you stopped paying in April, you are still a few months from being sued by the first creditor. The lack of phone calls is NOT an indication that they won't sue you. You must read your postal mail and not ignore it like most debtors do because they will send you a letter telling you that you are about to be sued. Unfortunately, it is very cheap, quick, and easy to sue so you want to monitor the county court website for civil cases involving you. And in California, it is expensive to file an answer even pro se. If I recall correctly, a $25000+ "unlimited" debt will require almost $400 to file an answer. Pre-COVID for $25k+ you would need to show up in-person for a mandatory settlement conference (MSC) at the courthouse. For debts of any size, you will also need to waste a ton of time responding to the plaintiff's request for admissions and interrogatories which have a 30 day deadline or you get a default judgment.

You know once you get a judgment, it isn't hard to slip up and get your bank and brokerage accounts found and seized by the creditors by a legal order. If they find out you have bitcoin, you will have to give up the private keys at a debtor's exam or they can have a warrant issued for your arrest for contempt. That's one of the few ways to end up in debtor's prison. If you get a regular job paid above the table, the creditors will usually find you and start garnishing your wages.

I think you're grossly underestimating how miserable life will be with debt collectors hounding you unless you leave the US for good. I'd file bankruptcy and just get it one and done. If you make Bitcoin fortune, buy a house in California on Jan 1 2021 and use California's newly expanded homestead exemption and then make it your primary residence.

[nozar]

If I don't file, will creditors eventually sue me, even though they stopped calling long ago?

[nozar]

It's been more than 6 months since I realized I'd have to file BK due to my company shutting down and being unable to continue repaying a large medical debt. I made my last credit card purchase in April. Since then, I've asked a bunch of questions here, many people have been very helpful, and I've learned a lot about the process. Thought I'd contribute something back.

Also since I stopped using credit cards, my life has been just fine. Not that I had overspent on my CCs; no. It's just that I didn't really need them. Aside from a few landlords with horse blinders on, I haven't had any trouble.

1. I retained a BK attorney soon after I realized I had to file because my leftover savings would never cover monthly payments, even if I took a high-paying job.

2. I took advantage of Covid-19 forbearances on all loans and credit cards. This lasted for 3+ months.

3. I continued making a little money to pay for living expenses along with the savings.

4. When each creditor called, I told them to contact my attorney instead. Zero calls since. Note that I still have not filed!

5. My credit cards were closed. Cool. What did I miss? The Chase Sapphire airport lounge during Covid? Points?
You want points, get a privacy.com debit card with 1% cashback, which also protects your privacy - the opposite of what credit card companies do.

6. The vast, vast majority of daily expenses can be paid with debit cards. My bank accounts have been left alone. But to be extra cautious, I opened a few crypto debit card accounts, and moved some money there. When I file, I'm going to declare everything that's left. It's just a hedge against some hostile account closure.

7. Some (not all) car rentals require a credit card. But Turo.com is a peer-to-peer car sharing platform much cheaper than car rental companies - it's the Airbnb for cars. So Hertz & co can screw themselves.

8. Leasing a home requires a credit check but:

a) If the landlord is sane, you can negotiate with them, explain your situation, and offer to pay rent upfront, a higher rate, higher security deposits etc. Also, your credit *was* good until recently, right?

b) You don't really *need* the whole credit check brouhaha to rent. Besides Airbnb, there are a TON of long-term furnished apartment rentals that don't care about your credit - Sonder, Zeus Living, Urban Flat, Hello Landing, Blueground, Kasa, 2ndaddress.com, Locale, Lyric, Bode etc. They're more expensive, but you don't need to buy furniture and pay for utilities and go through all that hassle. Show up and start living. No credit check BS.

9. Find a way to make money. A job is a surefire thing. But (this is not investment advice) have a look at cryptocurrencies. It's not even funny how they've tripled this year in our sleep, while we've been working our asses off. This is Bitcoin:


https://www.coindesk.com/price/bitcoin (click "1y"; I'd attach a screenshot if the forum allowed me to)


Bankruptcy is a time to reinvent yourself. To challenge how you see money. To look in new directions.

At this point, I'm wondering - why exactly would I bother filing? Why have all my private financial data permanently stored in the public record? What do I need credit for, when I can continue working online, renting, saving money, investing it (in crypto, its risk-free cousin DeFi staking, or whatever)? Buying a house is a questionable investment, and in this uncertain and remote-work world, I'm grateful I'm not tied down to a location. Even for conventional rentals, they ask if you've filed for bankruptcy in the past 7 years. Why would I want to have to answer "yes" to that? Why would I want to put myself through a humiliating Chapter 13 process, with a budget set by someone else, and my expenses monitored?

Creditors have stopped calling long ago. I seem to be doing fine without that FICO number. What am I missing?

It's also actually quite possible to work, live frugally, and for crypto to go up enough to be able to repay those loans faster than the filing process + my credit recovering. Loans can also be renegotiated (though you'll need to pay taxes on the difference).

So when does it make sense to file?