To file or not to file that is the question? Credit cards closed...by cc company

[elizabeth1969]

At this moment I am unemployed and I have gotten about 2-3months behind on my credit cards. My cc debt is about 25000. I have now gone over the limit on most and am now accumulating fees over fees. Of the cc cards I have 3 or 4 have been closed. Of course the cc companies are trying to get payment if I tried to make payment arrangements for like 5years would it really do me any good? Am I better off filing and getting them erased? I currently owe a large amount of student loans which will be with me for the next 30 years. My question is.. is it worth it to try and struggle and pay the cc over the next five years isn't my credit already damaged and will be for the next 7 years anyway?

[SinkingFast]

It kinda depends on what you're educated to do and how much $$ you will make once you're re employed. Do you have good prospects for obtaining new employment soon??

Yes, your credit is currently damaged, but IF you get a new job and start catching up on what you owe, in a couple of years, your Credit Reports will show some lates with some accts closed by Credit Grantors.

IF you file BK, that will be on your Credit Reports for 7-10 years, depending on if you go Ch 13 or Ch 7.

Getting behind and catching up on your own is a personal matter. Filing BK is public record. Even tho you don't get points one way or the other from the CRA's, future Creditors will view your Credit History with eyes of difference. Paying on your own vs filing BK falls into the area of "Morals Judgement" on the part of potential future Creditors.

If you have no hope of catching up, then seriously consider filing BK. But put it off as long as you can. If you go Ch 7, your student loans will only be administrative forebearance for the duration of you active BK. Generally 90-120 days or so.

[BassBoy]

Do you only have CC debt to eliminate? Once you begin working again and stabilized your income, you can look into credit counseling to eliminate the CC debt. I can't recommend one because I didn't got this route (only had 2 CC's with low interest and low balances), but maybe another member could offer a recommendation.

[anonymuse]

Only use BK as a last resort. Hopefully, you will land a pretty good job soon--we'll keep our fingers crossed for you--and you'll be able to make significant payments. Discover card has actually been really helpful and taking fees off and reducing rates when payments get started again. If you allow them to do automatic withdrawl of 3-4 payments, then they erase late charges and knock down your % away from the max. CC, believe it or not, will work with you--you just need to know what to ask for.

[keepmine]

There is no rush to file. I wait and see if I could get a written agreement about reducing the interest rates and waiving fees. If you can't get a deal you can live with, you always bk as an option.

[elizabeth1969]

liens?

I don't really believe there is a way to catch up. I have been struggling to pay minimums and now the cc's are wanting outrageous payments like 1000 or more to catch up with all of the fees they have added. My biggest worry is my parents: There house is paid off and is in my sister and I's name. I don't want anyone putting a lien on it.

[elizabeth1969]

There is no rush to file. I wait and see if I could get a written agreement about reducing the interest rates and waiving fees. If you can't get a deal you can live with, you always bk as an option.

__________________________________________________ ______

If you are already in trouble and missed payments and now they have closed the accounts.. even if I struggle to pay them over like 3 years it still will be on my credit for 7 years. I believe this is correct.

[keepmine]

My biggest worry is my parents: There house is paid off and is in my sister and I's name. I don't want anyone putting a lien on it.

You've got a real problem here. You need to see an attorney ASAP.

[SinkingFast]

My biggest worry is my parents: There house is paid off and is in my sister and I's name. I don't want anyone putting a lien on it.

You've got a real problem here. You need to see an attorney ASAP.

There may be a person at the bank that can help you as well. Probably what you want to do is set up your interest in the house in a Trust. That way, your Creditors cannot legally go after your portion of the value of the house as security for your debts.

And you don't have to be in such a rush. Believe it or not, you do have time. Especially since you're still paying your CC's something.

This is how it works with major banks like Chase, MBNA, BoA, etc. Typically, when you quit paying CC payments, Creditors will give you 2-3 months to start paying again and come up with the money you owe to that point. If you don't pay, then they'll turn you over to internal collections. That's when the phone calls start. Internal collections will try and get the money out of you. How long you stay in internal collections really depends on how much you owe and how agressive the Creditor is. You can easily be in internal collections for 2-3 months if not longer. It costs the Creditor money to turn you over to an external collections company. That will be a step of last resort for the Creditor. When your acct goes to external collections, that's when the clock starts ticking on a Law Suit where the Creditor may win a judgement against you. With a little legal manuvering and wrangling, you can even stall that action and drag it out for many more months.

People posting on here have gone a year or more without making payments to their CC's. No law suits. No judgements. Others have had a Creditor come after them for a law suit in as little as 5-6 months after the first missed payment. Since you're still paying, you're in no danger of any legal action at this point.

[keepmine]

Sinkingfast is correct. There are some ways around this.
In a previous post, you mentioned that you used to live in Tx. If the house is in Tx, all equity is exempt in a bk filing. Also, you lawyer can make the argument that the house is in the childrens names as an estate planning tool. You'll have to show you've never contributed any money to the purchase of the house. This is doable but, you do need an experienced bk lawyer.

[SinkingFast]

Actually, the house has to have been in your name for more than 1215 days, 3 years and 4 months, for all of the equity to be exempt. Otherwise, you fall under the New Law $125K Homestead Limit on equity.

[elizabeth1969]

House is in Louisiana....

I lived in louisiana until 2004 (like 20 years)
then moved to texas for over 2 years
lived in la for 2 months then moved to uk

is all very confusing.... I dont care what I might loose just don't want it to hurt my parents who are retirement age.

[elizabeth1969]

House has been in my and sisters name for around 10 years ... so it is safe?

[Minnymouth]

Do your parents have the "rights" to the home until they pass away...? This means can they live there until that time?

Yes, you do need to go and have it setup as a trust if possible to protect your interest and theirs......

Or do your parents just have you on the deed as survivors and the home goes to you and your sister after their death.....

A lot depends on how that deed is written up, whether its protected or not......

Also the Trustee would have to buy your sisters "interest" in the home to be able to get it to sell...... lots of legal work involved......

He can only take 1/2 of what the home is worth since your sister owns the other half.....

A free consultation with an attorney will help get some answers for you.....

[lrprn]

Elizabeth, there are many knowledgeable and helpful folks here, but since none of us are lawyers, no one here can tell you with certainty whether your house is safe or not. You need to consult with an experienced lawyer in your area who specializes in bankruptcy. Most have a free half to full hour consultation so there's no money needed. If you aren't sure who to contact, there is a decent lawyer search at www.lawyers.com - the Find a Lawyer is at the top of the page. It's somewhat more reliable than a stroll through the Yellow Pages. Your parent's house is at stake - make the calls and please let us know what the lawyers tell you. Hang in there.