wondering if I should move forward with bankruptcy?

[luckstyl]

I was stupid while I was in college, and had several credit cards with relatively small limits. I also had a large unsecured loan which was part of the Army ROTC program that I was contracted in. I was injured, and lost my ROTC scholarship which doubled as my income, and wasn't able to make payments on any of these accounts for extended periods of time. All of the accounts, including the loan, have been charged off, and most of the charge offs were about a year ago. I still get collection phone calls, but not nearly as many as I used to.

The debt totals about $40,000 - 25 of which is the unsecured personal loan. The loan was NOT used for educational purposes, nor was it intended for education.

I want to note also that I have almost zero disposable income - otherwise I already would have attempted to negotiate some kind of payoff plan to avoid bankruptcy. Right now though, it's just not feasible.

My first question - given the period of time that has passed since the charge offs, what is the likelihood than any of these creditors will take legal action? I'm hoping I can simply wait the 7 years total for this all to fall of my credit report, but I'm very scared that a couple years down the road I'm going to be sued by creditors.

Second question - since it's already been ~1 year since the charge offs, would I just be better off waiting 6 more years until these accounts fall off my credit report, or should I look into bankruptcy?

Third question - I incurred all of my debt while living in KY, and last January I moved to Alabama to take a job after college. Which state's statute of limitations applies to me regarding credit card debt - KY or AL? I did some research and found out that Alabama has a 3 year SOL and KY's is 5.

Thank you for any advice you can offer, it's a very frustrating and stressful time right now.

[SMinGA]

My understanding is the SOL that matters is where you lived when you took out the accounts. For filing bankruptcy, you use the exemptions of your current state (at time of filing) if you have lived there for 2 full years. If not, you look to where you lived for the majority of the time for the 6 months before the most recent 2 years. If there is no majority - use federal.

As to what is the best option for you to take, only you can make that decision. No one can predict the odds of whether or not a creditor will file suit against you, to some extent that is random and/or based on whether the creditor thinks they can accomplish anything with a judgment.

[HHM]

I must admit, this question ALWAYS baffles me. The question to file BK or wait for some date that DOESN'T matter. In no world, in no circumstance, do I see any benefit, whatsoever, to doing NOTHING. It will actually take longer for your credit to recover if you do nothing, and you will live with this pending uncertainty waiting for the other shoe drop. Where is the benefit in that alternative?

The real question is what lifestyle do you want, how much certainty do you want.

Do you want to live looking over your shoulder, do you always want bad credit? If yes, then do nothing. Keep in mind, the SOL is ONLY a defense to a lawsuit. The SOL does not prevent them from trying to collect the debt. Also, these debts get traded around for many years after charge off. So you will keep getting new collection accounts on your credit report.

OR.

File bankruptcy, which will fix your credit in 2 years or less, bring certainty to the status of ALL this debt, and you are done.

I just don't see that there is any comparison.

[ladyjenn]

File bankruptcy, which will fix you credit in 2 years or less, bring certainty to the status of ALL this debt, and you are done.

I just don't see that there is any comparison.

2 years or less to rebuild credit? WOW! That is great! We are filing mid July.

[BankruptinNJ]

I was stupid while I was in college, and had several credit cards with relatively small limits. I also had a large unsecured loan which was part of the Army ROTC program that I was contracted in. I was injured, and lost my ROTC scholarship which doubled as my income, and wasn't able to make payments on any of these accounts for extended periods of time. All of the accounts, including the loan, have been charged off, and most of the charge offs were about a year ago. I still get collection phone calls, but not nearly as many as I used to.

The debt totals about $40,000 - 25 of which is the unsecured personal loan. The loan was NOT used for educational purposes, nor was it intended for education.

I want to note also that I have almost zero disposable income - otherwise I already would have attempted to negotiate some kind of payoff plan to avoid bankruptcy. Right now though, it's just not feasible.

My first question - given the period of time that has passed since the charge offs, what is the likelihood than any of these creditors will take legal action? I'm hoping I can simply wait the 7 years total for this all to fall of my credit report, but I'm very scared that a couple years down the road I'm going to be sued by creditors.

Second question - since it's already been ~1 year since the charge offs, would I just be better off waiting 6 more years until these accounts fall off my credit report, or should I look into bankruptcy?

Third question - I incurred all of my debt while living in KY, and last January I moved to Alabama to take a job after college. Which state's statute of limitations applies to me regarding credit card debt - KY or AL? I did some research and found out that Alabama has a 3 year SOL and KY's is 5.

Thank you for any advice you can offer, it's a very frustrating and stressful time right now.

Just because the credit report says CHARGED OFF doesn't mean anything. That's what I thought and I got sued anyway. But is spurred me into action: I'm probably filing BK this week.

[flyinbroke]

2 years or less is for those in chapter 7 BK. Lots of people were getting CC offers before they even got discharged....some within days of filing! 13s probably won't see any improvement with credit or life in general until they are done paying.

And "chargeoff" is an accounting term and in no way stops them from collecting on a debt. It just means the negative balance is off their books and they get a tax writeoff.