Considering Ch 7 if we qualify...

[CoupleInNE]

Well, we just met with a debt attorney and considering everything that is going on, we seem to be shooting toward bankruptcy. I can't get past the stigma of that name until we were reminded about how many actually file bankruptcy in the business world etc. and work the system all the time. We are extremely nervous about this and wonder what we will be getting ourselves into. It couldn't be worse that our dilemma now. A few things...(1) How long does our credit show bankruptcy? We'd like to consider college loans etc. in the next 7-10 years for our sons. (2) Debt consolidation doesn't seem to look like a viable option, so, are there any hidden dangers that we might not know about? (3) Does it affect public service pension's etc.? (4) Is this really the best option to get us on our feet in the next few years or should we really completely exhaust all options...we were considering a mortgage reduction before we even do the Ch 7 & 13 consideration...Any input??? Thank you.

[HHM]

1. A bankruptcy is reported as a public record on your credit report for 7-10 years. HOWEVER, the negative effect of the BK only lasts about 2 yeas. College loans are typically not effected by a BK because getting college loans has nothing to do with your credit worthiness.
2. Hidden dangers of what?, BK or Debt Consilidation?
3. No
4. Can't really answer that without more info, but for the most part, BK should NOT be considered the last resort. (a) you cannot borrow your way out of debt (e.g. debt consolidation), (b) if you have to liquidate retirement funds to deal with debt or pay expenses, then BK is the better the option. etc.

[CoupleInNE]

whew...

Your response does make the transition a bit more palleteable. There isn't much to take. We have no/minimal assets, savings is a 401K, pension, school loans, and A LOT of credit debt that we amassed by paying off one with the other with better rates etc. Cars are paid off. Debt consolidation will probably not help much and regardless of how we get "some" of the rates down from our largest that is 14%, it seems our best bet is go for the 13 take the means test and see if we can qualify for the 7. We're hoping for the 7. Once we get over the shock of doing it and realizing we have just done the "bankrupt" thing, I'm sure the few years will go quickly. We're actually in good shape for our regular expenses. Credit just got out of hand to fix up a house and add a few extras. Mind you, we don't own a boat, RV or anything extra. Just a house, above ground pool, hottub (waste of money, for now) and that's about it. I look forward to any and all responses as we make the transition. Wish us well and hopefully, this will be a decision that will help us in the long run...Thanks.

[LuciluS]

Hi Ya'll - Yes, I'm from the South.

Last Sept. I was at the end of my rope. I had robbed 'Peter to pay Paul' all I could to keep making the CC payments. Hubby didn't even know. I sent our info via CCCS website on a Thurs. & we had a conference call on Sat. The guy was very nice & informed us he couldn't help us. We needed to see a Bankruptcy Attorney. I finagled the 1st 2 letters of the last name of an Attorney from him.

As the forms were quite detailed and when printed were many pages, I did a Spreadsheet of our Monthly Income & Expenses without the Credit Card payments. We met with the Bankruptcy Attorney the following week. He quickly glanced at them & said 'you qualify for a Chapter 7'. At that time, I had no clue what that meant. He said stop paying on all credit cards except for 1 because I had a balance transfer in Aug. to get a lower % rate. I made 3 pymts. with a little extra each month just to show good faith. He gave us a packet to complete. Told us we could file in Dec. or Jan.

Hubby found this Forum early Oct. OMG! I have read posts, posts, & more posts, used the 'Search' button. So glad DH found this forum as some Monies I was receiving could have been deemed Income & I had a lawsuit pending on the accident which deemed me disabled. We would be in a Chapter 13 had we filed in Dec. or Jan. The extra income dropped off in Feb. of this year & lawsuit was settled also. We will be filing using Mar.-Aug. income on 9/30/09 as our Bankruptcy Attorney is in a small town (we are in a smaller town than his) & files all of his clients bankruptcies the last day of the month.

Once we paid him a deposit of $300, we were able to refer CC phone calls to his office. He is paid in full now. I've talked to all CCs' at least twice. Some of our accounts have been turned over to Collection Agencies and I think one is with Junk Debt Buyer. Received about 5 letters through the normal way of mailing with the Post Office. He told us not to answer the phone unless we know who is calling.

We both are Walking Medical Patients, but have medical insurance. Our prescriptions are $500 a month & medical bills out the wazoo. DH is an Over The Road Truck Driver.

Some of the CCs are in my name only, some are joint & some are in DH's name only. I am disabled and receive SSD which is not included in the Means Test but is included when determining your income vs. expenses to get your disposable income. They cannot garnish my SSD.

We are praying we do not receive any type of lawsuits from the CCs until we get filed. Our Attorney did say he could delay if a lawsuit was filed.

Welcome to the forum. Hope you will take the time to read the Stickies (some are a tad bit outdated, but still useful information) read, use the search button and ask questions.

Luci

[freshstartfl]

CoupleinNE: Check the exemptions on your vehicles for your state, since they're paid off. You want to make sure they will fit in the exemptions so that you can keep them!

[CoupleInNE]

another response...

Fresh, we will do that. Thanks. Lucilus, I feel your pain. Do yourself a favor and keep a debt attorney in mind. Our attorney assisted me with a college loan company, Chase, who immediately and recently claimed I was default on a student loan. It ended up to be an error but numerous phone calls and the 30,60,90 day delinquent notices were filed to the credit bureau. Two letters and $100 saved the day and all is getting reversed. Said it was system error. Couldn't believe how the representatives had no clue what a previous rep. had done with me over the phone hours earlier. Anyway, check with the debt attorney. Any phone calls or letters to your home after you start the bankruptcy could make you eligible for a lawsuit BACK at the CC companys'. Good luck. I'll be checking the boards a lot. Still think we should meet with one or two financial people etc. to see if any other type of option is feasible before the ch 13 or 7 is filed.