Doing nothing

[gak555]

Just sitting here late trying to sort through this incredibly complicated bankruptcy mess.

The funds are low and was just wondering if one did nothing and let the collection calls, law suits, liens and garnishing wages
begin and then at that point filed bankruptcy would that be a prudent way of doing things and getting rid of all the above, or is that playing with fire.. Just thinking about saving for food, lawyer fees, car repairs, etc.

[FilingOnMyOwn]

Yup. You can stop paying. I'd shut off the phone you were using before, and get another cell, pre-paid or whatever to receive calls from only those you want. Or turn off the ringer on the phone you have now. It will take months or years for wage garnishment to take place, so I wouldn't be too concerned about it.

[djk]

key words are "prudent " and " " incredibly complicated bankruptcy mess." if your case is as you state, IMO, it would not be "prudent" to "do nothing" for any longer than 60 days.

[FoolAndHisMoney]

Just sitting here late trying to sort through this incredibly complicated bankruptcy mess.

The funds are low and was just wondering if one did nothing and let the collection calls, law suits, liens and garnishing wages
begin and then at that point filed bankruptcy would that be a prudent way of doing things and getting rid of all the above, or is that playing with fire.. Just thinking about saving for food, lawyer fees, car repairs, etc.

I think this is a good way to go about it. You can have plenty of time between your last charges and the bankruptcy filing to minimize the chance of anyone claiming fraud. You can save money and by the time they start any legal proceedings you can file and explain that the reason why you filed(if asked) was due to the law suits and potential garnishments.

Some would think you should do it sooner to save your already damaged credit score, but I think priority one at this stage should be making your bankruptcy go as smooth as possible. You can show the court you went to counseling and tried to work things out before filing and just couldn't work it out. I think anyway that's better then filing after only missing 1 payment. Just my opinion.

[clb123]

I disagree. I was never late before filing and now I am able to start over and restablish my credit quickly. I would advise anyone to file before letting everything get totally out of control.
Just my 2 cents...............

[SinkingFast]

You really do what you gotta do.

It's easy for someone to say "pay your payments until the day you file" when they have the money to do so. When their total amount of old debt payments, not counting current living expenses, isn't $500 more than their net.

Our CC minimums were nearly $3K/month. It was costing us right at $2K to maintain the house for sale outa state. Right there, those payments alone were $500 more than net. And we haven't even paid our rent yet. Or bought groceries yet. Or paid the utilities on the house we're renting yet.

Do we live or do we pay the payments on old, dead debt that's dragging us down??

You tell me,............ What would you do??

We used up every last cent in savings, sold off anything we owned of value to keep paying those payments. When we couldn't do it anymore, we quit.

Yeah, our credit history is trashed, but my kids have had a roof over their heads and food in their stomachs for months now. We woulda been on the street otherwise.

[tresjolie]

I would like to file now but do not have the money to do so. I am now two months going on 3 months behind on my credict cards payments. Always paid them prior. Was horribly difficult to find I could no longer pay. Not a choice of wanting to or not. My car started having problems/needing repairs and that was it. So far have had a few notices in the mail from the CC co's stating I am behind....the balances due are now over my credit limits. I will have to get my car running again first and then begin to save for the fees for my bankruptcy attorney before I can even file. Hopefully will not take too long but coming up with $1600/1900 ain't happening right now with the car not running.....

[SinkingFast]

If you can do it any other way, LaP,........ Don't cash out that IRA. It can't be touched in the BK.

In the last year, we cashed out our IRA to pay-off the second on the house, getting it market ready. We spent about $20K on fresh paint, new carpet, new windows, new tile flooring, new kitchen appliances, etc., so the house would look it's best. Still hasn't sold.

We've sold things to stretch the savings to keep paying everything. And were doing nothing but grinding our gears and going nowhere but deeper in debt. Hoping all the while, the house would sell, and things would turn around. They didn't.

If you can at all avoid it, don't cash out your IRA. It's safe under the New Law. They can't touch it. And at least you'll have that left when you come out the other side.

[aa06a47]

You really do what you gotta do.

It's easy for someone to say "pay your payments until the day you file" when they have the money to do so. When their total amount of old debt payments, not counting current living expenses, isn't $500 more than their net.

Our CC minimums were nearly $3K/month. It was costing us right at $2K to maintain the house for sale outa state. Right there, those payments alone were $500 more than net. And we haven't even paid our rent yet. Or bought groceries yet. Or paid the utilities on the house we're renting yet.

Do we live or do we pay the payments on old, dead debt that's dragging us down??

You tell me,............ What would you do??

We used up every last cent in savings, sold off anything we owned of value to keep paying those payments. When we couldn't do it anymore, we quit.

Yeah, our credit history is trashed, but my kids have had a roof over their heads and food in their stomachs for months now. We woulda been on the street otherwise.

Each person is different, and I don't think clb was saying throw good money after bad. I do think he was saying, don't wait until every hound dog has you in court trying to collect bad debt. Don't stay in denial, just file. You'll be better off in the long run.

[mydebtsucks]

If one did wait till collections, and your state has no garnishment laws, how do they get their money? Even with a judgement? If they can't garnish, what are the other options, especially if you own nothing?

[Graphic]

They more than likely won't sue you if they have nothing to get. It's according to how much you owe. If it's a credit card that you owe say 2k on ... it isn't worth it to them to sue because lawyer fees and court costs will cost them more than that.

If they think a few years down the road you might be making more money or have other items that they can take then they may sue anyways. and if you have debt that is like big dollars then more than likely they won't just let it go, they might but who knows they are all different.

[philnk]

Is binding arbitration a horse of a different color? What is the result of binding arbitration, a suit, or seizure of property, or what?

[clb123]

Each person is different, and I don't think clb was saying throw good money after bad. I do think he was saying, don't wait until every hound dog has you in court trying to collect bad debt. Don't stay in denial, just file. You'll be better off in the long run.

Thanks, aa06a47. I don't mean to imply what I did will work for everyone. I just knew it would only get worse for me if I waited. I also think all of us have to plan for our future. Filing sooner worked for me. Please don't misunderstand, my intention is not to judge. I was relieved after I filed but then tried to look ahead positively to plan ahead for a better future. And every situation is different, that is why we have this forum to get other ideas and to offer support for each other.
Cindy

[SinkingFast]

If one did wait till collections, and your state has no garnishment laws, how do they get their money? Even with a judgement? If they can't garnish, what are the other options, especially if you own nothing?

They can get Judgements against you that remain on file at the Court House until the Judgements are satisfied. That can prevent you from ever owning property of any kind in that County, and may prevent any Lender anywhere you move to from ever giving you credit.

There are Credit investigators nationwide that go to Court Houses every day researching people. If you have a Judgement against you in NYC, and you move to Florida, that Judgement will eventually show up on your Credit Reports. Meanwhile, the whole time you live in NYC, you won't be able to purchase property there.