New to this; will file soon

[pro3434]

I've lurked here for a while, but push has come to shove and I've got to get serious about my debts. After a few years of ignoring them, and then a few years of trying to pay something and rebuild my credit, I find myself getting nowhere.

I have around $37,000 in credit card debt. I went thru a divorce in 2002. I assumed a healthy portion of the marital credit card balances, and I could have handled those amounts had I not soothed my depression by using cards for a year with reckless abandon.

It took awhile, but I weaned myself off the cards (I had to -- couldn't keep up with paying them). I've not used any in over 5 years, but rebuilding my credit seems impossible now. I have four judgments against me (all by default; I know, stupid on my part). The worst is almost done with its $1,000/mo garnishment -- I've paid in around $15,000 now and I've still got all these other debts to go.

Recently I tried with two nonconforming lenders to refinance my house in order to pay off most of these accounts. I even had a settlement offer of $6k on a $17k card. However, I finally got turned down after being led along. Now that I've stirred up the nest of that collection agency, I met with a bankruptcy attorney for the first time last week.

I'm compiling a list of my assets, debts, income and all that fun stuff. I hope to have it all in my attorney's hands this week for a Chapter 13 filing. Meanwhile, I've filed a slow pay motion to try and stop this onerous garnishment (I normally gross $3700/mo with $540 child support to pay, so you can imagine how awful a $1060 garnishment is). If I have to pay $300-400 a month in Chapter 13 payments, that'll seem like a breeze compared to what I've been experiencing.

Sorry for such a long post, but it really is comforting to read accounts from others who have been down this road. I'm both ashamed and relieved to finally do this.

I have one concern that hopefully one of you veterans can help me on: My defaulted credit cards all got charged off and purchased by a slew of collectors. It's horribly confusing to analyze my credit reports and trace their paths. I'm trying my best to list the original card, its number and creditor's address along with all the collection agencies' information I can find so that the bankruptcy notices will be sent to the right people. My question is what if I leave out a collection agency (I just miss it) but I have a notice sent to the original credit card company? Will that suffice to discharge the debt should no one file a claim? Does anyone have experience with this?

[soleprop]

just wanted to tell ya you're not alone in this push/shove world .

i'm no expert but everything i've read indicates that listing the OC (original creditor) along with any CAs (collection agencies) who you have received mail from will suffice for the discharge.

a tip for you, as i spent a whole weekend curled up with my three credit reports: i found different CAs on each report (they don't all report to all of the credit bureaus); and i was able to trace the majority of the CA debts by the account balance (it was the same balance, just under different names), and sometimes by account number -- though sometimes CAs don't list that on the credit report, you can usually find the OC acct# in any mailing that they send you.

my mailing matrix was 3 pages long thanks to all of the CAs. you'll get through it though - and it sounds like you've tried and tried, and this is the next and right step for you.

[BKParalegal]

Based on your income and the child support, I am wondering why you are going 13 and not 7?

And do your best to list anyone and everyone, but if by chance, you do miss one, of course you can always amend prior to discharge, if you miss that deadline and your bk has been closed and you still missed one. There is case law In Re: Padilla, I think it is the 10th Circuit, which basically states, that all of your debts have been discharged even if they weren't originally listed as long as the reason wasn't due to fraud or intentional omission.

Good Luck

[pro3434]

Based on your income and the child support, I am wondering why you are going 13 and not 7?
And do your best to list anyone and everyone, but if by chance, you do miss one, of course you can always amend prior to discharge, if you miss that deadline and your bk has been closed and you still missed one. There is case law In Re: Padilla, I think it is the 10th Circuit, which basically states, that all of your debts have been discharged even if they weren't originally listed as long as the reason wasn't due to fraud or intentional omission.

Good Luck

I completed the means test online, and it showed $300-some in disposable income. I had to factor in my wife's income, so I guess that took it over.

I don't want to do Chapter 7 necessarily. I don't like the idea of turning over any of my assets, even though they're not worth that much.

Thanks for the comment on missing a creditor. That makes me feel better. I've spent a lot of time with the credit reports and trying to trace those accounts along.

[liz417]

Hi Pro3434,

Congrats on the decision to finally take control of your life by filing BK. Sometimes that first step is the hardest!

Good Luck!

[justplaintired]

Well meeting with an attorney will solve this mystery on which chapter to file. Alot of your assets would be protected so unless you have something with huge equity a 7 would eliminate your debt and get you a fresh start. An attorney will be able to help with your expenses. You might actually be surprised what expenses are allowed. Also you can easily find the exemptions you are allowed for you state by a quick search on the net.

If you're married then even if your wife doesn't file her income would count. Also if you have kids at home or possibly even the child you pay child support on may count on the means test. I would think it's been very difficult to make it with these garnishments and it's definitely way past time to get something done.

[pro3434]

Well, my attorney has taken my figures and come up with a 100% repayment plan at a $1,270/month payment for five years. The payment would include payments for my two cars as well as my student loan (which total $600/month pre-bankruptcy). So really I'm paying $670/month for the credit cards.

That's more than what I'd hoped to have to pay, but it's several hundred dollars a month better than this horrible garnishment I've lived with. If no catastrophes occur, we should be able to get by alright. But it's not going to be easy street either.

I feel like if I'm paying 100% I shouldn't have a scarlet letter draped around my neck. However, I do anticipate that if I pay it all back, I will have some pride about that fact down the road.

[Mi Bankruptcy]

I hope you have met with multiple attorneys. I have heard of some attorneys pushing their clients into Ch13 when they didn't need to file CH13. You have to figure yours/our credit is already trash.. if you don't have to delay the pocess and can do a CH7.. It would be a real fresh start. Good Luck..

[liz417]

Well, my attorney has taken my figures and come up with a 100% repayment plan at a $1,270/month payment for five years. The payment would include payments for my two cars as well as my student loan (which total $600/month pre-bankruptcy). So really I'm paying $670/month for the credit cards.

That's more than what I'd hoped to have to pay, but it's several hundred dollars a month better than this horrible garnishment I've lived with. If no catastrophes occur, we should be able to get by alright. But it's not going to be easy street either.

I feel like if I'm paying 100% I shouldn't have a scarlet letter draped around my neck. However, I do anticipate that if I pay it all back, I will have some pride about that fact down the road.

A 100% payback, wow!!

[soleprop]

yeah....it's tough to fall off the fence on either side of this one. on one side, it is good that it's 100% payback in that you can feel proud and all of having managed the debt with the help and protection of the bankruptcy court. but on the other side of the fence there's the idea that you could have negotiated for partial payoffs on the majority of your unsecured debts and you're paying more than you 'need' to, given that you've filed bankruptcy and the norm is payments that total what the creditors would have gotten had you filed CH7 (everything i've seen here looks like 75% payback, max).

everyone does bk a little differently, and really we don't know what caused you to need to file, but if you were going to do 100% payback it seems you could do that without the bk (although you would be subject to the whims of your creditors and their interest rates if you did that, which is one of the reliefs of bk).

just thoughts.

[pro3434]

I tried the settlement angle. I had a great settlement with my biggest creditor all lined up with a refinance on my house. The new mortgage would have been awful (an ARM with an already high interest rate), but I was willing to do it. But then the mortgage lender backed out, saying I'd have to settle out all of my judgments (total ~ $15k). They weren't giving me enough money to do that, so I was stuck. That was the second non-conforming mortgage lender I had talked to, and both required that I have all of these debts worked out. The fact that I have a solid payment history on my house and two cars seems to matter little in today's lending market (3-4 years ago, they'd have been throwing money at me).

So I'm just stuck. By trying to settle with the largest creditor (owe $18k), I'm certain I've shaken their nest to where they'll file suit against me soon. I have a 10-year employment history in a good, professional job, so I'm an easy target for a lawsuit (I've got four against me already). They have another year or two before the SOL expires.

I ran an Excel spreadsheet to see how long it would take me to pay each of these creditors, plus a couple of small ones, without filing Ch 13, assuming I had to pay 10% interest to each (that's the judgment interest in my state) if I paid that same $670/month. It would take 76 months to do so. With bankruptcy, it'll be 60 months and perhaps less if creditors don't file.

And no, I've only talked to this one attorney. I'm not going to say on this board what I do for a living, but I know a lot of attorneys. I'm using one who practices a lot of bankruptcy whom I know as a trustworthy and intelligent lawyer. I've been checking his work along the way, and when I look at the IRS standards for my area, his figures aren't much off from what I realistically see that I'm facing.

[soleprop]

well sounds like good legwork, good luck with the bk!