Why File? Why not just let things fall apart?

[cityplanner]

I know this is a very basic question but when one's credit is gone, why file?
We have old debts ... lots have been charged off, some will be charged off, some might pursue us for collection and we can work w/ those creditors. I seems unfair to be put on an "allowance" by a court. Especially since these are mostly medical bills and mostly dh's. (He was an independent contractor/consultant for years then went to W2 and income plummeted because his consulting skill set was outsourced). We also have some old taxes due, but can get an installment agreement, I assume. If the standard term for IRS installment plan is 5 years, we can do that.

We're in a situation where no one ever looks at our credit. We rent a house that doesn't involve a broker/management company. We own 2 cars in the clear. We don't need to acquire credit for anything ....

Thanks in advance for your patience w/ what must be a frequent question ...

[junker]

from most of the posts i read on this forum....bk is the necessary evil..to get on with ones life...clear of debt..not having to worry about judgments, garnishments...seizures..etc..and start rebuilding credit and starting over......

BUT on the other hand...there are a few..(i am one) that see as you do...i am collection proof...had cc,s quit paying.....after a couple of years got NEW credit cards.... just bought a house on contract WITH a judgment and lousy credit....owner said he didnt care...if i defaulted he was in 1st position on loan anyway..i put ad in local paper saying wanted to buy on contract....10% down..he jumped on it...didnt even run my credit...so there IS life with bad credit...of course its not for most people especially with families...but...imo..if you are truly collection proof....you dont have to run and file bk right away...BUT..i was lucky..most work was cash...or exempt...not garnishable...

[SunshineGal]

In my opinion, it all depends on the age and the amount of the debt. Judgments and tax liens get tricky, they can haunt you for up to 20 years. Simple collection accounts can only report for 7 years from the date of last activity, same with charge offs.

Yes, you can buy a house with old collections still showing, but most lenders will require judgments and tax liens to be paid. You will also need re-established credit as everything seems to be about credit scores these days.

Beware of old collections past the statute of limitations. If you make a payment, your date of last activity changes possibly opening the door for judgments.

Hope this helps.

[HakunaMatata]

BK was a proactive business decision for me. I wasn't in a position where I HAD to file. I chose to file to avoid having "things fall apart". I pondered my options and decided to take the one "big hit" instead of enduring small, chronic, future punches. A fresh financial foundation superseded shaky ground. I now know where I stand; and, I recognize life is in flux. I may not presently need credit; however, the need may arise in the future. Landlords go bankrupt, cars break down, health issues can surface, etc. I have the opportunity to prepare for such and I've eliminate judgment/garnishment worry.

[HHM]

You really need to ask yourself is that how you want to live. It is about your goals. No offense, anyone with half a brain would choose BK and put themselves in a position to recover as quickly possible.

Also, for goodness sake, how is BK worse than what is going on now. That sort of belief is usually related to woeful misunderstanding of the long term effects of BK.

[rrj]

my reason is for my son

he doesnt deserve the phone ringing and not his questions answered as to why i wont answer the phone. or people banging on the door and scaring him becouse i wont answer the door for the nice lady that always gives him lollipops at the office

Im going to start over, i have my envelopes set up. im going to open 4 savings account for house down payment and Christmas and birthdays acccount, retirement account.. and one for his future (college if he chooses) so he can start his adult life with a little cushion

im going to one envelope for 1000.00 for emercgy fund, and also do a enevlope for me so i can save some money for a couple of days off when needed, im self contracted so i have to save for my own personal days

maybe 6 months open a vacation account

I have lived on cash mostly for the last 6 months, im going to continue

[jribe]

as many have said; filing bankruptcy is a way for people to get out from under the burden and stress of the debt and debt collection tactics. If you have not had any bad situations with collectors or people pounding on your door at night- you are lucky. If you have, you likely understand why filing bankruptcy is the best option. There are a lot of shady collection practices, and the only way to be rid of them is to file

Also- the judgement will haunt a person indefinitely. They can be renewed every 10 years.

If you have no need for credit - why not just file and be done with everything? Then you don't need to worry about any of it. The people that typically say they don't want to file is because they are worried about their jobs (or future job prospects) or buying a car/home etc in the future. You don't have those issues.

It's always up to you. We are all here to share our experiences and stories and from that you make the best possible decision for yourself and your family.

Good luck.

I know this is a very basic question but when one's credit is gone, why file?
We have old debts ... lots have been charged off, some will be charged off, some might pursue us for collection and we can work w/ those creditors. I seems unfair to be put on an "allowance" by a court. Especially since these are mostly medical bills and mostly dh's. (He was an independent contractor/consultant for years then went to W2 and income plummeted because his consulting skill set was outsourced). We also have some old taxes due, but can get an installment agreement, I assume. If the standard term for IRS installment plan is 5 years, we can do that.

We're in a situation where no one ever looks at our credit. We rent a house that doesn't involve a broker/management company. We own 2 cars in the clear. We don't need to acquire credit for anything ....

Thanks in advance for your patience w/ what must be a frequent question ...

[cityplanner]

Say what?! For all and Sunshine Gal

Sunshinegirl wrote: "Beware of old collections past the statute of limitations. If you make a payment, your date of last activity changes possibly opening the door for judgments.
Hope this helps. [/QUOTE]

Wow - could you elaboate on this? I have one creditor hounding me for a debt that is about 10 years old. This was a store that gave credit w/out even having me fill out an app or show ID. I bought something there and when I was checking out, was asked if I wanted to "charge" it, which I did.

Once our income dropped a LOT I struggled to pay. Anyway, 10 years later this company's hired guns (pennies on the dollar collectors) are really hounding me, court, etc. I have asked them several times to show proof of the debt and no response.

I realize this might deserve it's own thread... but would love to hear what your opinions are about this. Thanks!

[SunshineGal]

Here is a link that explains the statute of limitations. Be sure to research your state laws as they vary.

http://www.creditinfocenter.com/rebuild/statuteLimitations.shtml#2

Keep in mind, you'll still owe the debt, it's just that they can't force you to repay it.

[jshep]

I thought about just letting it ride, but there got to be a point where I just wanted it over. Early on, I thought that if I simply changed my phone number they would stop calling. I started getting calls again within days of changing the number.

My Mother is in the same position we are in, having been involved in the same company that went bankrupt. We both loaned large amounts of money to the company from our home equity lines that became uncollectable. Then the company creditors started after us claiming we had signed personal guarantees.

My wife and I filed a few weeks ago, and our 1st Meeting of Creditors is coming up on Dec 10th. I thas been a real reief so far.

My Mother, on the other hand is dragging her feet. She has even expressed the idea of just letting it ride. I don't know if she just thinks that at her age she will pass away before things get much worse, or what.

The day before Thanksgiving a guy showed up first at my daughter (her grand daughter's) home and was grilling her about my Mom's wareabouts. Then he went over to my wife's Mom's house and tried to pressure them into giving information.

I got home and our neighbor from across the street, who has been through all of this herself, told me she walked up on what sounded like the same guy prowling around our property, looking into windows and such. She asked him what he was doing and he gave her my Mom's name and said he had been trying to serve her "for months".

She told him she had no idea who that person was (she probably really didn't), and that it was obvious that we were not home and to get the out of the neighborhood now before she called the police. Then he produced a badge, which I assume was just a private investigator badge, and our neighbor said, "That doesn't mean sh-t to me, get out of this neighborhood NOW.

So, the tactic at the moment, and I believe this is coming from Union Bank of California, is to try to embarass my Mom into doing something. I keep trying to encourage her to just go with me to the attorney we used and get things going. I think she is just afraid.