I want to, but wife has reservations and questions

[psychobabble]

Debt: We have just under $30,000 in credit card debt from college, a wedding, some car repairs, and poor spending practices. It has been traded back and forth between our credit cards trying to keep a 0% APR while we paid it off. It was all initially bought on my cards, but at different points it's been on hers.

Income: I've been unemployed for over a year for a variety of reasons. She makes about $35,000 a year.

Possessions: I own an old beat up truck, she's making payments on a nice car. We live in an apartment and have a nice TV and a Wii.

People Involved: 27 year old husband and 22 year old wife living in Clermont, Lake County, Florida

So I want to declare Chapter 7 individually. My wife's concern is that they'll take her car and say that she has to pay the debt. She feels terrible that it'll ruin my credit and believes that we should try to pay it off, but I don't believe it's a realistic goal. I think we are in a good position since we don't have any assets, only debt.

We aren't sure if our household income is going to be looked at or only my income.

We aren't sure if the debt will be called "community debt" or just my debt (assuming it's all on my credit cards at the time of filing).


Can someone offer some advice or clarification on this? Thank you very much in advance.

[mintz]

I am not qa pro at this but this site has been VERY helpful. She will NOT lose her car. She can reaffirm it as long as she continues to make payments. You will have to take the means test to see where you are and that will depend whether or not you can do a chapter 7. If you can get around it don't file, you are young to destroy your credit so soon but then again maybe I am too old lol

http://www.legalconsumer.com/bankruptcy/nolo/syn_nolo_bankruptcy-means-test.php?ZIP=75703&sponsor=nolo#Part7

[Dst1]

I am not qa pro at this but this site has been VERY helpful. She will NOT lose her car. She can reaffirm it as long as she continues to make payments. You will have to take the means test to see where you are and that will depend whether or not you can do a chapter 7. If you can get around it don't file, you are young to destroy your credit so soon but then again maybe I am too old lol

I am not sure what age has to do with it. In fact, the sooner he gets it off the books the sooner he can get his credit repaired. @ 27, in two years he'll qualify for a mortgage again if he can get a job.

[danaf]

Whose name is the new car in? Just hers or both of you?

[psychobabble]

The new car is solely in her name. The old truck is solely in my name.

[StartingOver08]

Debt: We have just under $30,000 in credit card debt from college, a wedding, some car repairs, and poor spending practices. It has been traded back and forth between our credit cards trying to keep a 0% APR while we paid it off. It was all initially bought on my cards, but at different points it's been on hers.

Income: I've been unemployed for over a year for a variety of reasons. She makes about $35,000 a year.
Possessions: I own an old beat up truck, she's making payments on a nice car. We live in an apartment and have a nice TV and a Wii.

You have two issues: the main issue being lack of income. The BK will not fix the income issue. As I see it, your problem is lack of income which is an issue you need to resolve anyway - whether or not you file.

The trading the debt back and forth on your cards could be an issue too - unless I am wrong, you would have had to do balance transfers and/or cash advances to move the debt around. This could be a problem in the filing as the cards where the debt has landed just prior to filing will get stuck with the debt - and they may make an issue of it at your BK.

The spending practices you describe will need to be changed anyway - even if you do not file. In fact, it is probably a good idea to change your spending practices now. Establish a budget, get a job and then see where you are in the way of needing to file BK or not. The BK only gets rid of past debt - it does not change your spending pattern or increase your income

The household income will be used to determine your eligibility for BK, whether or not you file alone.

[debtmonster]

My one hospital bill alone is more than all that. I personally don't think it's worth it. Even if collection agencies sue you, they won't win as long as you go to court and fight it. Ask them for proof that you owe them the debt and to show any signed documents by you. They'll never have it and the court will throw it out.

I would save bankruptcy as a last resort. $30k is way too small to bother with a Ch. 7 and destroy your credit like that for 10 years.

To put things in perspective, I have 62 people I plan to include in my bankruptcy for over $350,000 in total debt.

A friend of mine went bankrupt on only $8,000 from a car accident that he got in trouble with. I just think that's nuts.

You should have no worries from the bottom feeders trying to collect from you. Believe me. I've had these people chasing me for over 15 years and not once has any one of them did anything. Their bark is worse than their bite.

If you have collection agencies ragging on you every day, go here and use this letter as a sample to get them off your back:

http://www.hogvalley.com/2007/09/06/collection-agency/

I've been using that same letter religiously for myself and many others and it works wonders.

As I have ridden it out for years, one of the main reasons I am filing BK now is because I am giving back my house and they will give me a 1099 that I will have to pay a ton of taxes on by the short sale of the house. It would be far cheaper to pay my BK attorney than it would to pay mega-thousands in taxes... plus I'd be wiping out $360,000 in debt.

[psychobabble]

Thanks for everyone's input. It's helping us decide.

mintz, I'm with dst1 in that I don't see what age has to do with it. My mother says that it may be good that if I need to do it that I do it early in life anyway. Which is an interesting point.

StartingOver08, the poor spending habits are old, old habits. I've reformed. The credit cards have only been used in emergencies. Yeah, income is a problem, but it's separate from this. If we can clear the debt, we can make it just fine. But we're paying $620 a month to just minimum balances.

debtmonster, you scare me. You sound like you enjoy yourself too much. We could never have people chasing us for 15 years, even if all they do is bark. We're stressed out now and there's no barking.

We don't have collection agencies calling us because we still keep up on all our bills. It's just that some of the bills we have to pay for with a credit card.

[debtmonster]

If it ever gets to the point where the CA's get you, it's not as bad as you think. People on here make too much drama about creditors and collection agencies. All they do is TALK TALK TALK. If it were that bad, I'd be pulled into court all the time. Not once in 20 years have I ever been summonsed to go to court. I wouldn't worry about it. If you have to stop paying, then stop paying. Nobody is going to do anything to you, especially in this economy with people defaulting every minute of the day.