My situtation

[0money]

unsecured debt - 54,000
salary - 68,000

no other income
i rent
finance a car
green card holder, not a citizen

talked to CCCS, they offered to reduce APRs on my credit cards, total monthly payment to CCCS will be pretty much the same compared to what i'm paying now

talked to bankruptcy attorney, she offered chapter 13, total monthly payments will be about $500/month less (with my car included) compared to what i'm paying now

bad thing about declaring bankrupcy is that once i'm in the program i can't get out of it, and the payment will apparently be automatically deducted from my paycheck, therefore my employer will know my situtation

also a concern is that when i apply for citizenship in about a year - bankrupcy might look bad on my overall history, what if this affects my citizenship application

frankly i don't know in which direction i shoud proceed

any ideas ?

thank you

[magyar123]

Don't think filing bankruptcy will affect your citizenship application. Being in debt/filing bankruptcy is not a criminal act

[JRScott]

Debt Management Programs such as that offered by CCCS seldom work. Indeed most of them lead to you ending up in more debt and worse financial situation.

Take time to see 3-4 more lawyers before making the final decision. YOu might gain new insights after talking to each, and it is important to make sure you have one you are comfortable with. I don't think it will affect citizenship, however ask a lawyer to be sure.

[0money]

JRScott,
could you please elaborate on why CCCS is bad choice ?

CCCS said they will close all my accounts except one, will negotiate my APRs down to lower levels, and their fee will be $50/month.

Is CCCS's main disadvantage is that, unlike in the case of Chapter 13, i still will be able to use 1 credit card account and will eventually go over the limit ?

thank you

[southernbelle]

0 money, I've read that agencies like CCCS are traditionally a bad idea because participation by creditors is voluntary. In chapter 13, their participation is mandatory. I've read that some agencies like this are top heavy (they pay the exec's too much) and end up filing BK themselves. I'll search the forum for the post that relates to this, but it was eye opening.

Keep in mind that (like me) you must change the behavior that got you into this situation in the first place. Having a credit card available for use might not be a good thing. Personally I think living on a cash only basis has been a tremendously sobering experience and makes me aware of where my money goes every month.

As far as not being able to get out of a Chapter 13, that's not necessarily true. When you file, you do commit to paying the debt back for a specific amount of time, but if you have a hardship like a job loss, etc. you can ask for a hardship discharge and all payments made up to that point count towards the balances you owed when you filed. But be careful because I think the creditors can go back and charge interest and penalties for the amount of time you were in the BK.

Double check the accuracy of being forced to do automatic deduction in your district because most districts offer direct payments to the trustee by check or money order OR automatic deduction. I don't think they force a.d. on you. I think it's voluntary.

Your citizenship should not be affected by filing BK because it is not a crimminal act to go broke. You should speak with an atty to find out for sure, but I think you will be okay.

Good luck.

[kornellred]

CCCS is a non-profit organization. They derive a significant portion of their income by actually dissuading debtors from filing for bankruptcy. The large bank lenders kick back a percentage of the unscured debt to CCCS when a debtor (client) agrees to a settlement contract proposed by the agency. In New Jersey (where I am from) they even state this clearly on their website.

The law makes it mandatory to receive credit counseling before filing for BK. I went to CCCS of New Jersey and they proposed a solution that I could never afford. Since there was no question that I was going to file before I even received the counseling, I would have refused a reasonable settlement even if they had proposed one.

[sahaley]

I went to CCCS too... the guy there actually told me on the "down low".... to go talk to an atty as bk is typically a better option.... at least it was for me. As southernbelle said - the creditors don't have to participate in the CCCS program and so you'd be back to square 1. Good luck to you.

[BigJohn]

You are a green card holder. How long have you had a green card holder?
Is the card good for 2 years or 10 years?
When does the green card expire?
When does your work permit expire?
Where you sponsored?
What kind of visa did you have?

[JRScott]

The others here have answered it.

DMPs are voluntary, a creditor can refuse to participate. In general about half will agree and half won't. Thus really if your situation is bad it is generally better to file the bk rather than use a DMP, even if forced into a Chapter 13, Ch 13 participation by creditors is not voluntary and ordered by the court.

[0money]

You are a green card holder. How long have you had a green card holder?
Is the card good for 2 years or 10 years?
When does the green card expire?
When does your work permit expire?
Where you sponsored?
What kind of visa did you have?

i appreciate all the answers, thank you )

i had my green card for 4 years, it's a 10 year green card
i don't need a work permit
was sponsored, but don't need this any longer
i had H1B visa

[0money]

another question/thought i have:

currently i can't file chapter 7, won't pass the means test..

but what if my employer fires me for whatever reason, or i get laid off ?

i don't have any savings to last even 1 month without immediately defaulting on all
my payments..

will i be able to file chapter 7 then ?

and if i successfuly file ch. 7 - and find a new job soon after, can court throw out my case ?

[Phillymanhere]

The answer is yes: if as a result of being laid off, your previous 6 months' income is less than the median, you can "pass" the means test and possibly qualify for a chapter 7.

And yes, if you get a job shortly afterwards, that doesn't necessarily cancel your chapter 7. Now there are all sorts of qualifiers here. If you quit a job for no obvious or defensible reason (other than the qualify for chapter 7), the court will likely look at that harshly.

By the way, did you visit more than 1 lawyer? ... There are people on this board who have gotten varying opinions from lawyers--some saying they could qualify for a chapter 7 while others saying they could only qualify for a 13.

Even in the situation where the lawyers agree that you only qualify for a chapter 13, there can be significant differences in opinion on how much you can afford to repay. You say this one lawyer said you'd have to pay $500 less than what you are now. Well, I'd check out several more lawyers. There might be a really good one, one who has integrity and really knows their stuff, who is confident that you could pay $700 less a month or $900 less a month. I wouldn't take one lawyer's opinion as "the truth."