To BK or not to BK?

[sivmtrohs]

How profoundly would BK affect my life? BK seems to be the only solution for my financial problem, but wouldn't it cause other problems? I would greatly appreciate your reply.

[GoingDown]

How profoundly would BK affect my life? BK seems to be the only solution for my financial problem, but wouldn't it cause other problems? I would greatly appreciate your reply.

We need more info. to answer that.

Bankruptcy will affect your life for many years to come, at least a decade, and on some applications for credit, etc., I've seen this question... "Have you ever filed bankruptcy?"

But, in most cases it offers a way of escape from overwhelming debt and a chance at a fresh start without lingering debts and creditor harassment.

On the other hand, if you are "judgment proof", in other words, if you have nothing of value to take and a job that can't be garnished, then a cheaper, easier alternative is to simply do nothing. Don't pay your debts. Let them sue you and then just wait for the statute of limitations to expire on them.

[sivmtrohs]

I have nothing. So, it will be a very simple chapter 7 case if I file. What is the statute of limitations? When does it expire?

[sivmtrohs]

Also, all my debt is unsecured credit card debt, can the creditors and collection agencies take away anything in force, such as my bank account?

[newstart]

Also, all my debt is unsecured credit card debt, can the creditors and collection agencies take away anything in force, such as my bank account?

If they get a judgement against you and you don't pay them they will start the garnishment process. Depending on the creditor, some start garnishing your pay check and some start by garnishing your bank account. I have had both happen to me. I don't know of any job that is garnishment proof. I have also had a creditor get a judgment against me, I paid for a while and stopped so they started intercepting my state income tax return.(of course I included them in my bk).

[GoingDown]

I have nothing. So, it will be a very simple chapter 7 case if I file. What is the statute of limitations? When does it expire?

It varies widely from state to state. In Arizona, creditors only have 2 years after an account becomes delinquent to file a lawsuit. If they wait more than two years, they're out of luck. After they get a judgment, they only have 5 years to collect it. They can go back to court at the end of the 5 years and extend it for another 5 years, but it costs them money to do that, and most of them give up by then. If they don't extend it, then they can't take any garnishment or seizure actions to collect it.

And nationwide, after 7 years, your credit report will clear up. They have to remove negative information from your credit report after 7 years.

[GoingDown]

If they get a judgement against you and you don't pay them they will start the garnishment process. Depending on the creditor, some start garnishing your pay check and some start by garnishing your bank account. I have had both happen to me. I don't know of any job that is garnishment proof. I have also had a creditor get a judgment against me, I paid for a while and stopped so they started intercepting my state income tax return.(of course I included them in my bk).

The only judgment proof jobs are those that are paid "under the table". If you have no assets, and you get paid under the table, i.e.-- no taxes deducted, etc., then you're judgment proof. An example would be working as an electrician for a contractor who doesn't deduct federal payroll taxes or social security, etc. Which is what I used to do. Or by going into business for yourself as an electrician and cashing the checks from customers instead of depositing them, which is what I am currently doing.

[sivmtrohs]

Does paying like $20, 30 make any difference from not paying at all?

[newstart]

The only judgment proof jobs are those that are paid "under the table". If you have no assets, and you get paid under the table, i.e.-- no taxes deducted, etc., then you're judgment proof. An example would be working as an electrician for a contractor who doesn't deduct federal payroll taxes or social security, etc. Which is what I used to do. Or by going into business for yourself as an electrician and cashing the checks from customers instead of depositing them, which is what I am currently doing.

Thanks for the clarification I didn't even think along those lines. You are absolutely correct.

[GoingDown]

Does paying like $20, 30 make any difference from not paying at all?

No, it doesn't make any difference. They can still sue you. If you can't afford to pay at least the minimum payment, it is better to pay them nothing. Each time you make a payment, it extends the statute of limitations by one month. The statute of limitations is based upon the last time you made a payment to them.

[newstart]

The only judgment proof jobs are those that are paid "under the table". If you have no assets, and you get paid under the table, i.e.-- no taxes deducted, etc., then you're judgment proof. An example would be working as an electrician for a contractor who doesn't deduct federal payroll taxes or social security, etc. Which is what I used to do. Or by going into business for yourself as an electrician and cashing the checks from customers instead of depositing them, which is what I am currently doing.

You are absolutely correct, I didn't think about it along those lines. Thanks.

[sivmtrohs]

Thank you very much. I might just file for chapter 7.

[sivmtrohs]

My case cuold be very simple. All unsecured credit card debt with zero asset. Can I do it without lawyer? I do not think I can afford to buy a lawyer. Also, is it OK to fill the forms by handwriting instead of typewriting?

[JimH]

My case cuold be very simple. All unsecured credit card debt with zero asset. Can I do it without lawyer? I do not think I can afford to buy a lawyer. Also, is it OK to fill the forms by handwriting instead of typewriting?

I also considered filing myself at the start of my decision but I'm not sure that is a good idea. I'm going with an atty mostly because mine is pretty complicated. But also all of the changes that happened on 10/17 with the bk reform act. It's alot more complicated now and there are no good self-help books out yet for the new code and it's confusing because much web info is for the old code. I just spent a good part of the weekend learning about ch 20's that can't be done anymore. Ask Stacci.

[SinkingFast]

Another thing to think about,.........

In researching our debt options, I discovered a Credit Card forum site.

http://www.cardratings.com/newmessageboardfr.html

I learned there that discharged debt becomes taxable income to the debtor and is reported by the CC companies on a Form R9. The CC companies can also list R9 on the debtor's credit report as well. If I understood it correctly, you would have to be prepared to pay taxes on the dollar amount discharged in a particular tax year.