To BK or wait it out? 39, Single, defaulted on $20k 2yrs ago

[dean407]

Had a REALLY bad 2008-early 2010. Lost my job and could only find contract work for 2-3 mos. Then it took 4-6mos to find another contract. You know the story.

Ended up defaulting on multiple creditors for just under $20k total while I lived in FL, but no single account was more than $4500. I used most of that credit to exist off of while unemployed.

The charge off's on those credit lines are now appx 2yrs old.

I am 39yrs, single, no kids, no assets at all now. I am $2k upside down on my 2007 Corolla, but up to date on payments. I owe the IRS $3200 I am slowly paying off. I also have a personal loan of $10k I am slowly paying off.

I ended up moving in with my Father as sad as that is to get back on my feet.

I now have a stable but low paying State job at $27k/yr

My goal is to rebuild my computer certifications so that I can get back into the IT field at decent pay. It will take 1-1.5yrs to do that from now.

I JUST started to catch up with all my bills this month. I am now wondering if it makes sense for me to explore BK OR just wait things out another 5yrs?

The only loans I am worried about is a car loan in another couple of years.

My Father declared BK 2 or 3 yrs ago and just got a new car loan at 9.9% which isn't bad at all.

It seems if I wait it out: I won't be able to get ANY kind of loan for another 5yrs until those charge off's drop off, but after that - I should be in very good shape.

Whereas, if I declare BK, I know for sure nobody will pop up and sue me plus I could potentially get a loan in 2 yrs or so.

Thoughts?

Thanks in advance.

-Dean

[LadyDoveFL]

FYI: forget getting decent pay in the IT field; most jobs have been outsourced to India or China and the few that have remained in the states, well, the employers are taking advantage by offering severely-deflated wages. I earned my BS in Comp Sci over 20 years ago at a Tech U and I'm seeing a lot of mid-career IT jobs offered at LESS THAN what I made at my first job right out of college...

[sofarsogood2]

JMO, but if you are single and currently living at home, I would probably not push the BK button at this time for several reasons.

Are you being pursued for payment? You didn't indicate any collections activity in your post.

IRS debt can't be discharged.

You are not currently in danger of losing assets (like a home) that someday in the future, you may need to protect.

If you are not being pursued, check on the statute of limitations in your state, maybe you can ride it out.

Check out the threads in "collections" for more info on dealing with creditors.

Now, if they pursue you and threaten to garnish your wages, I would speak to an attorney.

Good Luck!

[dean407]

LadyDoveFL:

I feel your pain.

I started as a Network Technician in 1996. In 2005 I went into Real Estate as my employer had downsized.

My Microsoft certs were already outdated. I had to start over as a PC Technician in 2007. I made $34k/yr, but after the 1st 6 mos the economy went bad and the small company reduced my hours to the point I was just on-call. They wouldn't fire me because they didn't want unemployment ins to go up.

It seemed to pick up a bit in the Orlando area as I had not 1, but 2 full time jobs I phone interviewed for and made it to the 2nd cut for both of them.

One was temp to perm at $15/hr as an all around PC guy for Expedia in Central FL. It was with one of the larger consulting companies. The other was with a very solid company - Coleman Technologies as a Helpdesk tech for $32k.

When the Coleman HR rep asked me if I would take $25k for the job, I knew I had to increase my credentials. I need to get back into consulting and network admin work.

It's a far cry from when I made $35/hr for installing PC's in 2001!

Right now I have hardware credentials such as A+, HP, IBM, Okidata, Xerox and that's good for $15 at best with some exceptions.

I'm actually a Corrections Officer at a max security prison now as my Father lives in a VERY rural area. The schedule gives me plenty of time off to study. Start my MS tests in a few weeks. Plan on taking 1 per month.

After I get my MCSE and a few other certs I should at least be able to PROGRESS even if I need to start out as a PC Tech/Helpdesk tech again.

Another benefit is that since I no longer have any possessions, I can easily move to where the jobs are.

One step at a time, right?

-Dean

[dean407]

JMO, but if you are single and currently living at home, I would probably not push the BK button at this time for several reasons.

Are you being pursued for payment? You didn't indicate any collections activity in your post.

IRS debt can't be discharged.

You are not currently in danger of losing assets (like a home) that someday in the future, you may need to protect.

If you are not being pursued, check on the statute of limitations in your state, maybe you can ride it out.

Check out the threads in "collections" for more info on dealing with creditors.

Now, if they pursue you and threaten to garnish your wages, I would speak to an attorney.

Good Luck!

I am aware I can't get rid of IRS debt, just including it as something I do need to pay.

That's the thing....I haven't been contacted by any debt collectors in over a year in a half except by mail. So, I am aware it is there, but I am not harped on my debt collectors at all.

My score is 526 per Equifax as of yesterday. However, I *just* learned the man I subleased my apartment to did NOT pay the electric bill or cable/phone/inet for 3 months...which was still in my name. I just got a collections letter for $378 from the utility company. I'm sure the phone/cable company is soon to follow. So, now that is another two derogatory marks.

The Statute of Limitations in FL is 5yrs. It's been 2yrs.

I can't see how I can improve my credit in the next couple yrs so I can get a car loan without bankruptcy. Perhaps I am mistaken?

[nervous1]

Maybe I missed it, but why are you planning on a car loan in the next couple of years if you have a 2007 model?

Our van is 2004 and we're driving it until.....forever ;).

[krautrocket]

FYI: forget getting decent pay in the IT field; most jobs have been outsourced to India or China and the few that have remained in the states, well, the employers are taking advantage by offering severely-deflated wages. I earned my BS in Comp Sci over 20 years ago at a Tech U and I'm seeing a lot of mid-career IT jobs offered at LESS THAN what I made at my first job right out of college...

It's about experience, not certifications. I manage folks on shore and off shore for a large mobile phone manufacturer. Sure, we off shore grunt work but there is still a place for demonstrated talent stateside. I have NO degree, 10 yr history with this company, and make more than twice median income. It can happen. I suggest starting with internships / entry level rather than certifications. FWIW i have no degree and manage folks with Masters in CompSci...

[LadyDoveFL]

It's about experience, not certifications. I manage folks on shore and off shore for a large mobile phone manufacturer. Sure, we off shore grunt work but there is still a place for demonstrated talent stateside. <*snip*>..

So, are you hiring?

[sofarsogood2]

I am aware I can't get rid of IRS debt, just including it as something I do need to pay.

That's the thing....I haven't been contacted by any debt collectors in over a year in a half except by mail. So, I am aware it is there, but I am not harped on my debt collectors at all.

My score is 526 per Equifax as of yesterday. However, I *just* learned the man I subleased my apartment to did NOT pay the electric bill or cable/phone/inet for 3 months...which was still in my name. I just got a collections letter for $378 from the utility company. I'm sure the phone/cable company is soon to follow. So, now that is another two derogatory marks.

The Statute of Limitations in FL is 5yrs. It's been 2yrs.

I can't see how I can improve my credit in the next couple yrs so I can get a car loan without bankruptcy. Perhaps I am mistaken?

Have you looked at your actual credit reports to see how the accounts are reporting? That might give you a better idea of the status of the accounts.

Filing would help you clear out the debts and begin to rebuild, but comes with a 100 point credit ding of it's own. It usually takes 2 years to rebuild back to where you were at the start of the BK, which brings you within one year of the SOL. Your late payments remain on your credit report, BK doesn't erase those. It only clears the balance and relieves you from the debt, but those months and months of late payments will remain. You will exit BK with a score of about 426 and can then rebuild, but I think it will be a real slow process starting from 426.

It may be quicker to offer settlements for pennies on the dollar if you can.

There are other threads in "collections" where those posters have found ways to deal with creditors by negotiation that could help improve your credit score if successful, without the additional 100 point ding. I think they are worth a read before you decide either way.

Best Wishes