New and need some help

[jergen]

I have been looking around and I just a bit of advice to help me make some choices.

We filed chapter 7 due to medical bills about 5 1/2 years ago. Things were going well until this year. We do have some credit card bills, but nothing extreme. Last year we made a major purchase with payments deferred for 1 year. Unfortunately, due to economy changes the bonus we expected did not come this year. We called as soon as we found out we would not be able to pay off the balance and tried to work out a plan. They refused. Instead they raised my interest rate to 29.8%. After numerous calls attempting to renegotiate the loan, they told us to stop paying. Once we were 60 days past due, we would fall into collections and they could renegotiate. Well here we are, and the renegotiation is next to nothing. In addition, our balance has now increased by almost 30%. There is no way we will be able to pay this off.

We are considering filing chapter 13, but I don't know if that is an option since we had a chapter 7 less than 8 years go.

[zeezee]

You didn't mention how much the bill was. Why go into bk for one bill? Settle with the collections company when it gets more late. I think about 6 months before charge off they will negotiate for alot less. It will be a ding on your credit report but at least it will be settled.

[jergen]

It is currently 16thousand dollars, and with almost 30% interest it will be 20 thousand by the end of the year.

[justbroke]

It is currently 16thousand dollars, and with almost 30% interest it will be 20 thousand by the end of the year.

Wow, 30% interest. The current president (and others before him) have in no way addressed this issue. They are still allowed to charge almost as much as the loan shark down the street, only they (the banks) get to do it legally.

Wow, just wow!

So, as far as the Chapter 7. Yes, you cannot get a discharge in a Chapter 7 since you had one less than 8 years ago. So, no Chapter 7 for you.

However, you do qualify for a Chapter 13 discharge. because your Chapter 7 was more than 4 years ago.

As already posted, it seems odd to file Bankruptcy just to cure a single debt. Bankruptcy isn't the morning after pill. (I know, I'm going to get some kickback on saying that.) Congress has made a number of changes, via the BAPCPA of 2005, to highly discourage and penalize repeat filers.

I'm not saying that you're one of these bad Debtors who abuse the system. Not at all. You got into a situation which many have. That is, depending on future equity in their homes or future bonuses... neither of which materialize.

At the same time as I say all this... 30% interest is killer! Especially on a debt that high. Within 2.5 years, it doubles. That's just crazy.

Regardless of what I write or anyone else writes... you need a solution and a solution quickly. What does the rest of your financial/debt picture look like?

[jergen]

That is exactly why I am upset. We tried to negotiate, but they have been totally unwilling. They will reduce some of the additional balance created by the interest, but only we pay it off immediately. We don't have it. We do have some other debts. I would guess we have about 7000 in credit, but without the other, it was manageable. Now I just don't know how we will ever get it paid off.