How bad are charge offs before filing?

[lalap123]

Haven't paid creditors in almost a year and am starting to see charge-offs. I know this may be a moot point b/c I'm planning on filing in the next month or two, but how much worse will my credit be in the near future because I didn't have everything current when I filed? For some reason I feel like it's going to be much worse for future creditors to see charge-offs on my credit report before the BK shows up there. Any experiences?? I guess the charge-offs take seven years to fall off just like the chapter 7??

[HHM]

You are correct, it's a moot point in the grand scheme of things.

But, yes, it is worse. Charge offs are still negative entires and the BK does not necessarily remove the charge off entry once the charge off is on your credit report.

But, credit recovers over time.

[holycrap]

Haven't paid creditors in almost a year and am starting to see charge-offs. I know this may be a moot point b/c I'm planning on filing in the next month or two, but how much worse will my credit be in the near future because I didn't have everything current when I filed? For some reason I feel like it's going to be much worse for future creditors to see charge-offs on my credit report before the BK shows up there. Any experiences?? I guess the charge-offs take seven years to fall off just like the chapter 7??

My wife and i stopped paying CC's in Aug. We had originally planned on filing in Oct, but have decided to move that date to Jan/Feb. My attorney seems to be pushing me to still file in the fall. Is there any good reason for this? You made it a whole year before you filed. Why does she want to move us so quickly?

I just want to make sure i get all of the little repairs done and some expensive dental work done before i turn everything over to a trustee for 5 years.

[HHM]

The attorney I plan to use was very much the opposite. She told me, look you only get to do this once every 8 years (yes it is seven, she said eight, I even said isn't seven? She said, buy the time you get done with this and are ready to file your next BK, I really hope your not standing at my door in seven years and one day after your discharged. She said I just tell my clients 8 years because I want to impress upon them it is seven years and bit longer by the time you start it again.)

huh??

Umm, it really is "8" years. It is 8 years from filing date to filing date to do chapter 7.

In any event, unless there is a "good reason" to wait; by that I mean a strategic reason, file as soon as you can, that way you can begin your financial recovery all the sooner.

[holycrap]

[QUOTE=BigBoy2U;333972]Your attorney needs money for the holidays....



I have had that exact thought. I have told her my reasons for wanting to wait and she keeps saying not to. Maybe if i offer to give her more of her fee before filing she will calm down.

[Pizza]

To me, 'rush out and file' seems exactly as described by BigBoy's attorney. So what if you get if you get a quicker recovery after filing? Your credit score is 'bad' instead of 'horrible'. Big deal, when you consider:

1) You don't need to jump into getting credit again anyway. Learning to live without credit is tough but keep helps you from reaching that comfort zone at year six & seven that could bring a relapse of bad habits and lead to the next bankruptcy.
2) Even if bad habits weren't an issue, you can kiss your credit recovery good-bye if you have an expensive illness, job loss, divorce, or anything else happen soon after filing. In this day and age, job losses are far too common to take for granted, and if you lose your health insurance with your job, you could just be walking along feeling fine, collapse, and wake up with hundreds of thousands in hospital bills. It happens.

Granted these thoughts aren't mainstream, but I think there should be some imminent danger of not filing first; at the very least a pending lawsuit. Then if it were me, I'd determine if I were collection proof, and if not, what I could lose. Have you received an informational subpoena - that would trigger urgency to file.

Basically, the status of credit after bankruptcy IMO should fall below the priorities of:

1) The BK's success - has enough time passed to avoid presumption of abuse?
2) Job expectations - do you expect your mobility to move upward or downward? For most of us, it's downward right now unless we're already unemployed
3) Health predictibility - keep in touch with your doctor, ESPECIALLY if you have no insurance or high-deductible insurance
4) Stability of your non-financial life (home life).
5) Will you need to replace or repair a car soon, and if so, can you afford the repairs, get someone else to cosign a note, or can you find a 'junker' that still runs?
6) Do you see some expensive home repairs coming up?

Think of your financial situation as if you had just filed yesterday. Are you fearful or relieved? Either way, the banks aren't going to eat you. I would think long and hard and wait for a real sense of urgency. You can change your phone number, you can move, you can change checking accounts, lots of things. Unfortunately, no one can predict the future, especially today.

[frogger]

I personally think a lot of attorney like to run a BK mill and it is a numbers game for them.

We've got a few of these in our area and they churn 'em out left and right. You see a lot of 13's that last for a few months, and then get kicked out for not making the payments. It is a numbers game for these attorneys and it's all the numbers that they can put in their pocket.

It doesn't matter if you really need to bk, if you show up, they will bk you. One amusing thing I saw a couple of years ago. A guy I knew had a garnishment order show up on a Thursday, by the next day (Friday), he had filed.

No thinking ahead, no planning, no options for at least 7+ more years. He and his family are in worse shape than ever.

[treehugger1]

Things are especially hazy if one has reasonable wages. What does a 25% wage garnishment look like compared to a potentially higher percentage BK 13 payout. In my case, I've opted to suffer 25% garnishment for as long as I can. Each individual case is quite different. Are there assets in danger of being taken? Is real property involved? Is your credit important to you? what is your age? Do you have elderly parents who may require your assistance, monetary or otherwise? Do you have huge student loans, big wild-card in the BK world if you can't file a BK 7 and get right back to making those SL payments?

Other than your credit getting really trashed, judgments and garnishments may not be the worst thing that can happen to you.

There is no doubt in my mind that eventually Iwill need to pull the trigger on a BK gun. At my age, with my student loans, ailing family members, and the possibility of cutting back my workload to part-time and retiring, I may very well qualify for a BK 7. If I would have found myself in the same predicament 15 years ago, I would have sucked up the BK 13 and been way ahead at this time.

I agree that a good BK attorney will take a hard look at your overall financial picture and consider other factors that help you make a decision. The attorneys I spoke to 3 years ago are all highly regarded, but only one of them suggested an immediate bankruptcy. We played around with a lot of different numbers, sutting down my overtime, etc. In the end, when I thought my salary was going to be dramatically reduced, the opposite happened. An increase in salary made was more than enough to cover the possibility of 25% wage garnishment. Unfortunately, I had already created a big financial crisis for myself. Now, I spend a great deal of time dealing with collections and recently, a circuit court lawsuit. Yet, I'm pretty calm these days. I've learned a great deal. I definitely understand the collections issues more than I would have if I had filed the BK 13 in 2006. I have much more to learn. I continue to be grateful for this board and the experiences shared by all.