Only option = bankruptcy, Help..

[sunnymisty]

I am a divorced 59 year old woman with $20,000 in credit card debt and a $2,500 lien being held by Titlemax for my car. The car was fully paid off but I became desperate for cash and put my car down as collateral at Titlemax, and they are charging me something like 130% APR on my loan. I got a job as a waitress and have been using my tip money to make my credit card payments but recently hurt my back and have been unable to goto work. I feel like bankruptcy is the only option for me at this point. I'm totally lost on how to go about the situation and just want to be able to keep my car after bankruptcy so I can keep working for food and shelter. I appreciate any help/advice..

[Bell30656]

Step One... Take a deep breath. You are amongst friends. We've been there, done that. The car is obviously a priority the credit card debt is not. Go have a free consultation with an attorney or two. I am assuming that if you can't pay the $2500 on the car, you also can't pay an attorney to file the bankruptcy right now. Keep in mind that the credit card companies won't just come take your stuff. The credit card companies are like the Big Bad Wolf. First, they have to huff and puff... Getting that car paid off is a high priority because there is something that they can take.

Go see a couple of bankruptcy attorneys. Get more than one free consultation. If indeed bankruptcy is your best option, no need to be in a hurry. It's a long way from a credit card company calling you about being late and actually getting a judgement.

[Drazil65]

Hi and welcome...Read everything here (all the stickies at the top of each category) and absorb as much info as you possibly can. Its will empower you and you will feel like you have some control again. Because you are feeling so out of control right now it makes you feel very lost and confused, reading and educating yourself on bankruptcy is one of the best things you can do for yourself.

Next, start looking for a bankruptcy attorney in your area. Make appointments with several (at least 2 or 3 and more if you need to) attorneys for the "free" consult. Go to the consults with lots of questions and gather as much info as possible from them. When you feel you found one that makes you feel very comfortable and will work in your best interest (you will feel it) then start making payments to that one towards your fee. Most will take payments for a chapter 7 filing.

Create a timeline for filing. Make a goal and start on the road to filing. Gather all your paperwork (your attorney will let you know what you need) and fill out what you need to fill out. Stop paying on all unsecured debt by this time as you would be throwing away money on payments at this point. Also, research and setup Google Voice (its free) it will be your saving grace and give you peace and quiet through out the process.

See, once you get on the road to filing you actually feel so much better and you feel like you have options once again in your life. This will be one of the best decisions you will make for yourself, a business decision for the business of you. Good Luck and ask any and all questions here that you need to, lots of knowledge here so fire away!

[sunnymisty]

Thank you so much for the kind advice. What really upsets me is that I've been working non-stop to the point of becoming physically ill and used every paycheck to make the payments towards the credit cards and now I feel like I've done all of that for nothing. I'm also really kicking myself for not paying off more of my debt from TitleMax. They're the ones charging me 130% interest so I should have put all my effort towards that debt...I don't know what I was thinking. Would it be a good idea or even possible for me to do a cash advance on the credit cards that I have and use the funds to pay off my TitleMax loan?

[keepmine]

Once bk becomes a viable option, you need to stop using those cards.
Just stop paying the cc's and use that money for the titlemax loan.
Since you're not working, I'd suggest you concentrate on getting well and wait until you're able to support yourself before you file bk.

[btbeme]

Hi Sunny, you have received good advice here.

I want to second what Keepmine said - don't use the cards for a cash advance. That would delay your ability to file for a much longer time than you would want.

A basic rule of thumb is to stop making payments on things you don't care to lose. Credit cards - stop paying. Walking away from a vehicle? Stop paying. But continue to pay on the things you wish to keep, such as your situation with the car. Use the cash that you would otherwise have used paying the credit cards to make those payments.

Another basic rule of thumb is that you want to stop using credit about 90 days before filing.

Lastly, consult with a few attorneys, even if you cannot afford to hire one. They will generally have a free consultation where you can get other sound advice that is more critical to the way your local BK Trustees tend to work. Ask those attorneys about the car loan specifically - whether to pay off, whether to reaffirm or not reaffirm, etc. as that decision could have a bigger impact on you post-BK. This may sound a little confusing right now, but if you read through a few of the stickies at the top of the Ch 7 forum it will all start to fall into place.

We have all been there. You will get whole again if you walk through this (sometimes frustrating) process and touch every stone on the path. We will help you.

[TheBajan]

Thank you so much for the kind advice. What really upsets me is that I've been working non-stop to the point of becoming physically ill and used every paycheck to make the payments towards the credit cards and now I feel like I've done all of that for nothing. I'm also really kicking myself for not paying off more of my debt from TitleMax. They're the ones charging me 130% interest so I should have put all my effort towards that debt...I don't know what I was thinking. Would it be a good idea or even possible for me to do a cash advance on the credit cards that I have and use the funds to pay off my TitleMax loan?

I'm so sorry to hear this and I know how you feel. I'm astounded by the interest rate they are charging. I didn't even know it was legal to charge that much. Do not take out a cash advance. It will delay your filing. Just stop using the cards, stop paying the cards and get caught up on the car note. Someone can correct me if I'm wrong but I don't think you are allowed to make extra payments to one creditor when you stop paying your other creditors. That's preferential treatment and the trustee can undo the payments and redistribute them to everyone else. So just get caught up, save a little money that is exempt-able in your state, and then save to pay an attorney so you can file. You are among friends here.

The Bajan

[LadyInTheRed]

Someone can correct me if I'm wrong but I don't think you are allowed to make extra payments to one creditor when you stop paying your other creditors.

It's okay to pay secured creditors.