top Ad Widget

Collapse

Announcement

Collapse
No announcement yet.

First Post: Need advice on slightly unique situation.

Collapse
X
 
  • Filter
  • Time
  • Show
Clear All
new posts

    First Post: Need advice on slightly unique situation.

    Hello everyone.

    Here is what is going on. We are a family of four (two parents, one 9 year old, one baby) and we have accumulated about $37000 in debt. Most of this is two large CCs, some medical. This debt is over six months old. We have a mortgage but no equity, no assets. Our budget shows us $1600 in the hole/month for living expenses. That is with me receiving unemployment, my wife works part-time. I will be starting work again at the end of this month, but the income will only be the same as my current unemployment until I start getting commissions (if I am any good at the job, which is as a bill collector!)

    Seems like a cut and dry Chapter 7, no?

    Here is the twist. My parents are willing to lend me the money from their retirement account, which I could pay back for as long as it takes, to settle the debts for about $.40 on the dollar. So we are looking at about $15000.

    My view is this:
    -File chapter 7
    -Rebuild credit from there
    -This would get me out of a $370/mo payment on a high-interest $15000 car loan
    -Borrow money from parents to get a cheap car
    -Borrow money from parents as needed until we can balance the budget to keep our home (we are current on mortgage)

    My parents' view is this:
    -Avoid bankruptcy at all costs due to the ramifications

    So my main question is: Under which scenario are we better off? Is settling going to be significantly better on our credit rating than a Chapter 7?

    Any advice or opinions is greatly appreciated, and time is of the essence.

    #2
    What makes you think your creditors will settle for .40 on the dollar? If by chance they do be very carfull because any debt they "forgive" will be counted as income and you will be taxed on it!

    Bankruptcy is just a business decision nothing more nothing less. Some of the richest people in the country have filed BK.

    Comment


      #3
      If you are talking to the debt settlement people, please run away from then as fast as you can.

      Comment


        #4
        I have spoken with the two major cc companies and they said they would settle for $.40 on the dollar. I have made no promises.

        Someone told me that the creditors can file a 1099 on me in the event of a chapter 7. Is that true?

        Comment


          #5
          Honestly, just file the BK. Don't involve your parents in this and create a possibly stressful financial relationship.

          Even though you can be loosy goosy with paying back your parents, all you are do is trading one debt for another. File the chapter 7 and simply eliminate the debt.
          Last edited by HHM; 01-08-2008, 12:08 PM.

          Comment


            #6
            FYI. http://www.bkforum.com/showthread.php?t=20461

            I like your view except for the part about borrowing money from your parents. Use bankruptcy to eliminate assets you can afford on your own. If it's just a short term temporary loan thing then OK.
            It's not what we have in our lives, but who we have in our lives and the quality of those relationships.

            Comment


              #7
              Stand on your own two feet, make a business decision of filing bankruptcy, and get out from underneath the debt.....

              If in the future, you need funds to purchase a vehicle before your bankruptcy is finished or your credit scores are still low, then consider borrowingfunds from folks to help get auto....

              Your folks worked hard for their retirement, don't cheat them out of it.............by borrowing on it.... it may be needed for their care in the future.....

              Bankruptcy is a "business decision", not a shamefull thing!!

              Your folks are from the old school (like me) who was taught to pay your debts - no matter what..............
              Minny

              "It's amazing the paths that our feet sometimes follow in life".

              My suggestions are from "personal experience" and research only. Do not consider this as legal advice. Each bankruptcy case is different.

              Comment


                #8
                Need advice on unique situation

                By all means, file the Chap 7, and remove all debts....it is clean and you can start over. Do NOT involve your parents retirement funds....you are just exchanging one debt for another. We filed and bought a used car the next week.....slightly higher interest but in our own name, no co-signers. No one can legally send you a 1099 for discharged debts!

                Comment


                  #9
                  Originally posted by wta View Post
                  Someone told me that the creditors can file a 1099 on me in the event of a chapter 7. Is that true?
                  No. Your debt is discharged in Chapter 7 bankruptcy and you no longer owe the money nor will a 1099 be sent to you.
                  Chapter 13 Filed "Old Law"
                  Filed: 6/2003 Confirmed: 3/2004
                  Early pay off sent: 10/05/2007 - 9 months early
                  11/16/2007 - Discharged!

                  Comment


                    #10
                    If you settle for 40cents on the dollar, that is when they can send you a 1099 for the amount they write off.

                    Someone correct me if I am wrong, but that is my understanding of settlement offers from the cc companies.


                    On a personal note also, do you really want to be "beholden" to your parents?? I agree with the others, I would file BK before borrowing a penny from either my parents or my inlaws. They might think it wouldn't matter if you werent able to pay them back in a timely manner, but in the back of your head you would have a seed of doubt. Not to mention how would siblings view this action?
                    Older people who have never been there tend to have a much more negative view of bk than it really carries.
                    Last edited by arkienurse; 01-08-2008, 02:07 PM.
                    Chapter 13 filed -8/12/04
                    Plan approved- 7/11/05
                    Date discharged--10-12-2007
                    Date closed- 12/6/2007:yes2::yes2:

                    Comment


                      #11
                      -Borrow money from parents to get a cheap car
                      -Borrow money from parents as needed until we can balance the budget to keep our home (we are current on mortgage)


                      I'd hold off filing until you can support yourself. Borrowing money to balance the household budget post bk means, you've accomplished nothing. Commission work is pretty iffy. Be sure you can generate enough income to stand on your own before you file.
                      Also, don't involve your parents in your financial problems.

                      Comment


                        #12
                        Your parents probably don't know that much about bankruptcy. I know that I tried to do anything but file because I had lots of misconceptions about bankruptcy. We almost did the borrowing from parents too and I am so glad we didn't. You need to do lots of research and post reading on this board before you decide what to do.

                        Comment

                        bottom Ad Widget

                        Collapse
                        Working...
                        X