New here, some questions.

[anablic]

First off, great forums. I've read through a bit of it and am grateful that people here are so nice and nonjudgmental. Second of all, I apologize if any of this has been asked. I have been reading over BK info for a couple of hours now, but am slightly overwhelmed and feel really frustrated (about my situation mostly). I'll try to keep this short and spare you my sob story about...

A couple of years ago (early 20's) I let my credit go to heck. We hit a rough patch and instead of trying to work things out with creditors, I let it all go. I had a couple of charged off CCs and a hospital bill that are on my credit report. My husband's didn't suffer as bad and he had nothing in collections as of recently. Over the last couple of years, we've been working on improving our credit and repairing the damage that was done. Last spring, I was informed that I had been sued by one of my past creditors that resulted in a judgment in their favor. That $700 debt turned into $1700. I wouldn't have let it get that far but the notices were going to my parents and my mom, well, she can be a bit spacey and just ignored the mail that came for me (fair enough, I haven't lived there in years and was living out of state). I was going to fight it, but procrastinated and now it's been too long. Another blotch on my report.

Hubby's quickly excelling credit was then damaged by a $1800 phone bill... I know, who gets an $1800 phone bill? Well, we were stupid and used our wireless internet in Canada. We were in the process of moving and didn't bother to check on our final bill from them, so that resulted in it going to collections with extra fees. Yes, our fault again. He tried to work it out with the collection agency to avoid it being reported, but without being able to make a huge lump sum, they wouldn't work with him.

So, all of this was workable. We were going to use our bargaining power and tax returns/rebates to get a real handle on this, once and for all. Then I found out a hospital bill I've been paying on is going to collections as it wasn't paid in full (I didn't even know they could do that). So it seems like for every step forward we take, we take two back. Today was the final straw. I had a $6000 hospital bill from last summer. I filed an application for assistance (ie write off) and assumed it had gone through as I hadn't heard anything. Today, after MONTHS I just got a notice that I still owe it and it'll also be headed to collections soon. (Okay, I lied about keeping this short).

The total of my collections/judgments is ($500 charged off CC + $700 hospital bill + $500 hospital bill + $1700 judgment) $2400, plus my husband's $1800 = $4200 on our credit histories. Add $6000 hospital bill plus a few other ones I've been paying on and we're sitting at a little over $10k in debt. It just becomes bleaker that we can reasonably pay this and it's hitting our credit very hard, yet again.

So BK seems to be becoming an option.

My main question is this. Can you exempt any of your bills from bankruptcy? The reason I ask is we have a car (inexpensive) and my sister in law cosigned the loan. I do not in any way want this to affect her. I don't want our car loan affected at all either as we need our car! We owe $11k on it yet and I believe it's worth $9k. I will not even consider BK if it'll affect my SIL.

Also, what about a future mortgage? I feel tied here. Like maybe if we keep working hard to pay this stuff, we'll get it off our credit reports and can buy a house, but again, every time we pay something, we get something else and aside from the cell phone snafu, we haven't made any stupid purchases or anything in years. We own nothing! A crappy old tv, inexpensive furniture, a Saturn, a wedding ring, etc. The hospital bills were from two surgeries and I have paid so much on my own of those.

Like so many others, I just want a clean start. I can't go back five years and undo the mess I started. I was willing to suck it up, suck up the horrible credit I created, pay it off on my own, but it just keeps mounting!!

I think we'll qualify in other areas. Like I said, we really have no assets. Our income is also well less than our state's median.

Thanks in advance for any advice.

[lrprn]

Welcome to BK Forum - glad you found us!

You two sound like the perfect candidates to file bankruptcy to get a fresh start. As you have discovered, it doesn't take much to get the debt snowball rolling and once it builds up speed and mass, it starts coming at you from all directions.

To answer your question first - with your sister as co-signer on your car, you can still file bankruptcy and it won't impact her credit AS LONG AS YOU MAKE THE PAYMENTS ON TIME WITHOUT FAIL EVERY MONTH.

Some questions so we can help you more -
- What state do you live in?
- Going back six full calendar months starting Feb 29, 2008 to September 1, 2007, how much total gross income from all sources did you and your husband make?
- How much equity do you both have right now in your cars? (In other words, subtract the loan still owed from the current resale value of each in Kelly Bllue Book or the NADA guide.)
- Do you have other assets of value besides your cars? (Property, etc.)
- Do you have children or other adults living with you?
- How much total secured and total unsecured debt do you two have?

If you can answer these questions, we can help you sort things out a lot better.

If you haven't set up free or low-cost initial consultation appointments with 3-4 local bankruptcy lawyers (there's no obligation), now's the time to do that.

Again, welcome - keep posting questions - that's why we're here! We'll help you as much as we can.

[keepmine]

I wouldn't file bk over $10K.
I think I'd try and open settlement negoitations as planned. Contact your health care provider and see about some sort of settlement with monthly payments.

[325Falcon]

10K in debt is squat!!! This is nothing to file BK over. Do a very simple budget and stick to it for a year or two and the mealsley 10K will be gone.

Just do some reading on this board and you will see what I am talking about. Some folks have $80K - $200K in unsecured debt. Most of my CCs had more than $10K.

Good luck!!!!!!!!!!!!

[anablic]

Thanks for the opinions thus far. I know some people may feel like 11k in debt is nothing but it is very daunting to me, especially since my credit is already destroyed (again, several charge offs, a judgment and collection accounts that have been sitting there for several years). And, at this time, our income is relatively low. We are really living with the bare necessities and while we make do, it would be very hard for us to crunch numbers and create more disposable income. I was going to call the hospital on the 6k bill to try to apply for assistance again (new tax returns that reflect our current income) but I feel if they're not willing to work with me, they'll just send it off to collections like the other one did.

- What state do you live in? ~~ Wisconsin

- Going back six full calendar months starting Feb 29, 2008 to September 1, 2007, how much total gross income from all sources did you and your husband make? ~~ Roughly $12,000

- How much equity do you both have right now in your cars? (In other words, subtract the loan still owed from the current resale value of each in Kelly Bllue Book or the NADA guide.) ~~ We only have one car and we owe $11k on it. I believe the worth is about $9k.
- Do you have other assets of value besides your cars? (Property, etc.) ~~ No
- Do you have children or other adults living with you? ~~ I am due in June with our first child, otherwise no. Fortunately, we will not accrue any out of pocket medical costs with the new baby.
- How much total secured and total unsecured debt do you two have? ~~ I have a credit card with $700 on it, he has one with $2 or 300. Other than that, after more calculations, I alone have $10k between the judgments, charge offs and hospital bills. My husband only has the $1800.

The more I think about it, the more I think maybe I could just file since most of the debt is in my name and my husband's credit seems so much more salvageable than mine. Does this seem realistic, considering what seems to be the small amount of debt? If I did file for BK this year, I'd have a two year head start on repairing my credit as opposed to slowly paying off the never ending debt, if I were to do as suggested and pay it off over two years. Does that make sense? I look forward to further input.

[keepmine]

Honestly, your big problem is not debt but, low income. Why do you think you can buy a home making $24K? You and your husband need to but all efforts into making a lot more money or, a year from filing bk you're right back in the same sitation.

[anablic]

We live in an area where home prices are very affordable (70-80k), so it's very reasonable to assume we could purchase a home. We're not planning on stepping into a $1200 a month mortgage. I was pre approved before the judgment went through, as soon as I got those two things cleared off my credit (then the judgment, now more hospital bills).

Also, we are working on increasing our income, but my husband is a freelancer and work is rather slow. He just got a part time job. I have a stable income (from home). No, 30k a year (after my husband's part time job) isn't a whole lot but we are finishing our educations as well. Our situation will not be the same in a year as we will have no medical bills (currently covered 100%) which is the biggest killer and a vast majority of this stuff (judgment, charge offs) is from several years ago. We also have a very good check on our current finances and make due just fine, just with very limited disposable income. We have our very small credit cards and a car loan (those things I would not want to BK on), and otherwise use cash for everything. We don't even have a cell phone plan anymore, even though we'd had one for 8 years without ever seeing more than a $150 bill.

[keepmine]

Your situation will be a lot different next year with a baby in the family. Forget about any medical expenses. Just clothes and food and all the other stuff that goes with a new addition to the family. If you think disposable income is tight right now-just wait.

As to filing by yourself. It's like using an elephant gun to shoot a gnat. You're now talking about filing on under $10K. Your legal and filing fees will likely approach $1200-$1500. That's a good chunk that could be used to settle for 50 or 60 percent of what you owe.
Sometimes, bk just isn't the solution. I think this is one of those times.

[anablic]

Thanks again everyone for the input. Fortunately, we're naturally frugal and already have her first year of clothes, diapers (cloth) and I'll be nursing in addition to already having nearly everything we need (we have a lot of friends with kids who are passing stuff on to us). So, we'll be getting by cheaply during those first couple of years, while we're still at a lower income but that's not really even pertinent. I opted to leave out a lot of our income/personal information as I didn't really feel that it related directly to my concerns, but we know why we're in a low bracket right now and it's to work towards future goals where we'll be in a better financial situation. So, we'll struggle a bit now but it'll be worth it in a couple of years.

Anyhow, we have more discussing to do and I have some work with my creditors to see how flexible they'll be. Thanks again, take care.

[woeisme]

I know that how much debt is too much to deal with varies from person to person and how much income they make. To someone who makes 20-30K, 10K of debt seems as impossible to pay off as 100K worth of debt does to someone making $75,000 a year (my case, for example). So please don't be dismissive and say it's nothing, that it can be paid off easily with a little belt tightening, ok?

I think what some of the posters might be concerned about and just not expressing real well is that if you use the option of BK now, if you have some other unforeseen situation arise, like medical problems (you already know how those can bite you in the hinney!) or if one of you can't work, etc. If you use the BK option now, and then something happens, you are stuck with absolutely no recourse for 8 more years. This is true for any one of us, it's always scary pulling the BK trigger, especially CH 7 since the wait to re-file is so long, so just be sure this is what you want to do, and you have throughly examined all your options, like the one with your medical bills, re-apply for aid first before making your decision.

If you do decide to file, it sounds like you should have a fairly simple no-asset case from what you have described, so you might be able to file pro-se (without a lawyer) and save a lot of money. Just do a lot of research first, but it seems like the average person on here filing pro-se does a better job than the average attorney, because so much more is at stake for the person filing than is for the lawyer who just approaches it half-a$$ed.

Good luck.

[spectria]

hello anablic,

Your debt may seem daunting, but I am trying to get clear what it is that you want to accomplish.
It seems as thought you were working to improve an low credit situation, and old things kept popping up (one forward, two back), and tarnishing your improving record.

If you actually have charge-offs and judgements, they will remain on the record for a number of years, as do PIC (paid in collection) or just late payments. If you pay everything ontime going forward, lower your credit card debt to near zero, and pay cash whenever possible, your credit situation will clear up sooner than it will if you add a BK to it. That will stay on longer than anything.

As my Mom taught me, make whatever payment you can each month, more than the minimum if possible but less if not, just make the payment every month.

Stop using the credit cards, period. If you must use them, do like I did, pay down the balance with my paycheck, then wait a week and pay the bills with it. Then pay it down again. The credit card company gets less interest, you get good credit for having an ontime open revolving account on your record.

In my state, if you contact the creditor and request they only contact you by mail (no more phone calls) they must adhere to that request.

Otherwise, change your phone number and give it out to your friends and anyone you want to have it.

Then figure out which time of day, or which day you feel strongest, and only open the mail from the vultures when you're in your strongest state of mind, not before going to bed, or before your friends wedding!!

Hang in there, your situation isn't that bleak... Bk will only add to your expenses at this point, it won't reverse the credit damage.

[Iamfree]

First off, great forums. I've read through a bit of it and am grateful that people here are so nice and nonjudgmental. Second of all, I apologize if any of this has been asked. I have been reading over BK info for a couple of hours now, but am slightly overwhelmed and feel really frustrated (about my situation mostly). I'll try to keep this short and spare you my sob story about...

A couple of years ago (early 20's) I let my credit go to heck. We hit a rough patch and instead of trying to work things out with creditors, I let it all go. I had a couple of charged off CCs and a hospital bill that are on my credit report. My husband's didn't suffer as bad and he had nothing in collections as of recently. Over the last couple of years, we've been working on improving our credit and repairing the damage that was done. Last spring, I was informed that I had been sued by one of my past creditors that resulted in a judgment in their favor. That $700 debt turned into $1700. I wouldn't have let it get that far but the notices were going to my parents and my mom, well, she can be a bit spacey and just ignored the mail that came for me (fair enough, I haven't lived there in years and was living out of state). I was going to fight it, but procrastinated and now it's been too long. Another blotch on my report.

Hubby's quickly excelling credit was then damaged by a $1800 phone bill... I know, who gets an $1800 phone bill? Well, we were stupid and used our wireless internet in Canada. We were in the process of moving and didn't bother to check on our final bill from them, so that resulted in it going to collections with extra fees. Yes, our fault again. He tried to work it out with the collection agency to avoid it being reported, but without being able to make a huge lump sum, they wouldn't work with him.

So, all of this was workable. We were going to use our bargaining power and tax returns/rebates to get a real handle on this, once and for all. Then I found out a hospital bill I've been paying on is going to collections as it wasn't paid in full (I didn't even know they could do that). So it seems like for every step forward we take, we take two back. Today was the final straw. I had a $6000 hospital bill from last summer. I filed an application for assistance (ie write off) and assumed it had gone through as I hadn't heard anything. Today, after MONTHS I just got a notice that I still owe it and it'll also be headed to collections soon. (Okay, I lied about keeping this short).

The total of my collections/judgments is ($500 charged off CC + $700 hospital bill + $500 hospital bill + $1700 judgment) $2400, plus my husband's $1800 = $4200 on our credit histories. Add $6000 hospital bill plus a few other ones I've been paying on and we're sitting at a little over $10k in debt. It just becomes bleaker that we can reasonably pay this and it's hitting our credit very hard, yet again.

So BK seems to be becoming an option.

My main question is this. Can you exempt any of your bills from bankruptcy? The reason I ask is we have a car (inexpensive) and my sister in law cosigned the loan. I do not in any way want this to affect her. I don't want our car loan affected at all either as we need our car! We owe $11k on it yet and I believe it's worth $9k. I will not even consider BK if it'll affect my SIL.

Also, what about a future mortgage? I feel tied here. Like maybe if we keep working hard to pay this stuff, we'll get it off our credit reports and can buy a house, but again, every time we pay something, we get something else and aside from the cell phone snafu, we haven't made any stupid purchases or anything in years. We own nothing! A crappy old tv, inexpensive furniture, a Saturn, a wedding ring, etc. The hospital bills were from two surgeries and I have paid so much on my own of those.

Like so many others, I just want a clean start. I can't go back five years and undo the mess I started. I was willing to suck it up, suck up the horrible credit I created, pay it off on my own, but it just keeps mounting!!

I think we'll qualify in other areas. Like I said, we really have no assets. Our income is also well less than our state's median.

Thanks in advance for any advice.

My advice for 10K worth of debt is not to file.

Call MMI. http://www.moneymanagement.org/

They are the approved credit counseling company.

They can set up the payment plans to get you back on track. I would have done that, but I was $80K in debt.

You can get rid of $10 in a couple of years.