Who should I consult?

[promtcy]

I am considering what to do to resolve my situation and I'm not sure who to consult to get the best advice. I talked to one BK attorney and I qualify, they also wanted to get started right away, etc. Big firm, I assumed they just wanted the money. I didn't bite. I talked to an attorney who handles collections, not bankruptcy, so I would know what to expect when that happens. He suggested I look at filing chapter 7. I have not talked to another attorney yet, I sort of assume they will all tell me I should file. That's how they make money. I'm not convinced I should. Especially living in Florida where the exemptions only total 6K. A little about my situation:

I'm in my early 50's. I had emergency surgery in December 2014 with no health insurance. Total of all seven bills is 30K. I only have one part time job right now. I have talked to all parties and they are accepting $25 each month, although some say it will go to collections after 60 or 90 days anyway. I have 6K in credit card debt. So my total debt is 36K. I rent and don't own any property. Income obviously is pretty low and I easily qualify for chapter 7. I do own my car, it's a 2006 and worth about 7K. I do have an IRA, some stocks worth about $900 outside of that from a company I used to work for. About $500 in savings.

Obviously I need more income and I'm working on that. I'm probably not going to see anything above 30K a year right now in the county I live in and with my education. At least for the next year or so anyway. I've kept my expenses low, it's even tighter now paying out an extra $175 a month. I do have health insurance now, obviously a high deductible plan.

I really don't see any way that I can keep paying these medical bills without more income. I can't save any money for that high deductible insurance plan or anything else, I can't invest any money, etc. If something else happens I won't have any money to take care of it if I continue on this path. I see my choices as dig the hole deeper by continuing to pay, stop paying the medical bills (no idea how likely it is they'll sue), or file chapter 7. I'm working on the employment situation and I know it'll change, I just don't know when.

What type of person should I be looking for to get advice about my best options? If any of you have some guidance I would appreciate that as well.

Thanks in advance.

[LadyInTheRed]

You saw a bankruptcy attorney and he told you to file BK. You saw a collections attorney who doesn't do BK and he told you to file BK. What did he have to gain by telling you that? Attorneys have an ethical duty to give you accurate advice, regardless of how it affects their fees. The vast majority of attorneys take their ethical obligations seriously. If you think you talked to one who doesn't, consult with another BK attorney and see if you get different advice.

You could go to a credit counselor. Here's some information on credit counseling http://www.consumer.ftc.gov/articles...edit-counselor. A credit counselor might suggest a debt management plan. Be very careful and make sure you understand the plan they suggest works. Many people try a DMP and then find themselves in BK anyway after throwing money away trying to pay down debt.

If not paying on the medical debt will allow you to pay your living expenses without using credit, then you could stop paying and wait to see if you get sued or if you are able to increase your income before you are sued. You can always file BK after you are sued and stop the lawsuit in its path.

I can't tell you how many people come to BKforum after having tried everything to avoid BK and regret not filing years earlier.

As far as exemptions are concerned, once you pay attorney fees, you probably will no longer have non-exempt assets. If you can't exempt all the equity in your car, you can probably buy the non exempt portion back from the trustee. What you will pay for BK will probably be less than not filing BK, even if you have to give up assets. I'm not saying whether or not you should file BK. Just get fully educated about all of your options and make the decision that will help you deal with your debt and move forward in a way that will allow you to live within your means and not get back into debt. And have some trust in the professionals you consult unless they give you a reason not to be trusted. The fact that people get paid for their work does not mean they are not honest in their work.

[LadyInTheRed]

I suggest you read this thread: http://www.bkforum.com/showthread.ph...-regret-filing. It is focused on Chap 13, but a lot of what people express about what they do and do not regret is also common among those who filed Chap 7.

[promtcy]

Thanks for the response. Obviously I wasn't all that trusting of the bankruptcy attorney I talked too. They worked things like a car dealership and as I used to be involved in that business, I know a hard close when I see one. The collections attorney was very helpful. I did find it interesting he suggested filing bankruptcy, and tbh I think that's probably the best course. After thinking about it, I guess I'm just trying to avoid it. It's not really a huge amount of money, just seems that way right now.

I have found two more bankruptcy attorneys to consult with that have good reputations. I've been searching for any other options before making an appointment with them. As you said, I just wanted to get fully educated about all of my options. After doing some reading here, it seemed like a great place to ask some questions.

The medical expenses are the only thing that has me considering filing. Slashing my living expenses to the bare essentials allowed me to pay well over the minimum on the credit card. I had that much lower than it is now. That was never a problem. I got talked into putting some of the hospital bill on the card the day after surgery.

The almost amusing thing with the hospital was I didn't qualify for their assistance program based on one thing. My credit score, it's too high. They even showed me their written guidelines. They couldn't seem to comprehend that my score has nothing to do with how much I could pay.

I will check out that thread. Thanks again for taking the time to give some advice, I really appreciate it.

[LadyInTheRed]

If you file BK, you definitely want to find an attorney you are comfortable with. I'm glad you will be consulting with more.

Medical debt is a very common reason people are pushed into bankruptcy. The hospital knows that, which is why they wanted you to use credit cards to pay.

$30K is a lot of debt when you have only a part time job! It's good to avoid BK if you can, but don't kill yourself to do it. A good rule of thumb is that if you can't reasonably expect to get your debt paid off in 5 years, BK may be a good option. Take your time to figure out what is best for your financial future. There is no reason to rush as long as you are not simply putting off the inevitable out guilt, shame or fear.

Please ask all the questions you need to.

[Jongo]

If these debts were erased, how would you feel about your income, living expenses, ability to save for emergencies, etc? Make sure that you have a post-BK plan that is livable and reasonable, because the days and years after a bankruptcy are just as real as the ones you are living right now underneath this debt.

[promtcy]

If these debts were erased, how would you feel about your income, living expenses, ability to save for emergencies, etc? Make sure that you have a post-BK plan that is livable and reasonable, because the days and years after a bankruptcy are just as real as the ones you are living right now underneath this debt.

Interesting question. Thanks also for the advice on a post-BK plan.

Before the medical bills came along I was able to save some and work on paying off the small amount of credit card debt I had. I wasn't using it for living expenses and I wasn't out buying expensive toys with it. I was hardly using it at all. In fact I haven't used it since December at the hospital and I have no plans too.

I don't feel great about my income level, I'm working on that. I had a plan for saving more, I knew I needed a bigger emergency fund, the medical bills pretty much threw that out the window. If the debts are erased I can save and invest more and also put money into an HSA account for any future medical expenses. I don't have any plans to spend more on living expenses, I've never really been one to do that anyway. Having health insurance now goes a long way towards making sure this doesn't happen again. I wasn't at the income level I wanted before the medical bills, yet I was keeping my head above water.