Should I or Shouldn't I?

[ScoobaSteve]

I am in the market for a new job. I also may need to move to a new apartment in 1 year. How much trouble will a bankruptcy cause for both these things? Any idea?

[HHM]

Okay, sounds like someone is now looking for ANY excuse not to file.

New Job = NO issue
Rental = NO issue.

Rentals, by there very nature must rent to people with questionable credit (people with good credit buy)
Job, the credit impact on job search is more myth than reality. Unless you are trying to get a job at Lockheed building the next ICBM, your BK is of no concern to anyone.

[ScoobaSteve]

Not looking for excuses. I was talking to a friend last night and he brought up both of those possibilities. So I figured I would ask you all. I spent most of my evening last night researching attorneys.

[alo]

HHM - I like your straight shooting style. For my situation, I think your responses would be the same!! Something I needed to hear a year ago and OP is lucky to hear now.

[frogger]

HHM - I like your straight shooting style.

Indeed. It's a style that some might consider to be brutal, but acceptance of reality is key here.

How many people are bankrupt that don't even know it? Sometimes it just takes a firm dose of reality to get the point across.

[Sammie]

Hi! You have gotten some very good advice from experts on this Forum.

I wish we had filed 5 yrs. ago instead of 6 wks. ago. We too thought we could work out the credit c debt. What we did was make it worse, we took $42,000 out of my h 401 last year to pay off "some" of the debt, then got hit with a 35% penelty tax on our Taxes last year for early withdrawl. But sometimes you "can fix stupid" we swallowed our pride and filed BK. We are learning now to life without plastic.

Good luck in your decision, you are young and it is time to start fresh. sammie

[ScoobaSteve]

The thought of getting to start over without this debt hanging over my head is so dreamy. I hate how I struggle over every small purchase I want to make. I'm a tennis player and want some new rackets but am too afraid to spend the money on them (they are about $150 each). It would be so nice to just have money in the bank and be able to buy a new racket without torturing myself over the decision. My parents will freak out but ultimately I know I need to do this. Unfortunately, just last month, before I really started thinking about this, I shredded all my old credit card bills and stuff. I'm sure I can get that stuff online though.

[kawh]

Consult with some attorneys, but realize their advice may be skewed toward doing the BK. Just sayin.

How much equity does your state allow in a vehicle? If yours is going to be totally paid for next year, will you be allowed to keep it?

If I were in your position, I would hold off for awhile, and create a strict budget (you're going to have to do this anyway, you know, after you no longer have any credit cards to fall back on), and see if there is any area, such as entertainment or cell phones, or convenience foods, you can cut back on. I know from my own experience those were areas I was overspending on when I had a good job
You could borrow from your 401-k to pay off a lot of the $18k debt. If you then received a great offer to transfer most of the other debt to 0%, you could create a plan to pay off the balance sooner.

I know the government takes a huge portion of your earnings when you're single, and it's a shame you can never get those taxes back when you fall on hard times.

Just MHO, of course, but if I were looking for a new, higher paying job and it meant a lot to me, and I had only $18k in debt, I would not file --- yet. I waited way too long to file on my own $40k in debt, and made a lot of mistakes like withdrawing from my retirement funds to pay the debt, so I was about two years too late in filing, as nothing happened in those two years except I paid payments of about $900 monthly that I can never replenish as now I'm over 60. Not advising you to do anything so foolish, but if I were in your place, I would hesitate and try to work with the budget some more. I know sometimes it's possible to save in areas I never thought were possible because I always had the cards to use for my emergencies.

And who knows? You could find a higher paying job and be able to pay off the debt at a low interest rate, or if not, then you could default and have bad credit. AFTER you have the better job.

[ScoobaSteve]

Even though I would like a new, higher paying job, they aren't exactly growing on trees right now.

I have a pretty strict budget now. I drink the coffee made at work. Make my own breakfast, lunch and dinner. I only go out to eat on Saturday nights. I canceled my gym membership years ago. I can't really think of anything I can get rid of now.

Are services like the Consolidated Credit Counseling Services that have commercials on TV a total scam or can they actually help?

[frogger]

now.

Are services like the Consolidated Credit Counseling Services that have commercials on TV a total scam or can they actually help?

I won't say that they are a total scam, however I would say that I absolutely would not participate with any of these services. Do some looking around on the board and I think you will find that this is the opinion of 99% of the posters here, and for good reason.

[frogger]

My parents will freak out but ultimately I know I need to do this.

Your parents are probably not as ill-informed as you think. While they may not know the financial details, I'm sure that they know you and that all is not well.

I too was concerned with this, however after discussing bk with parents and family, they were all 100% on board with it.

I should have done it 5 years before I did......

[ScoobaSteve]

Going to see a bk lawyer on Monday October 22. My friend is a lawyer in the same office (but doesn't do bankruptcies). He is a very well-liked guy and I actually see him every year at a charity wine auction event at a local community college that I volunteer at. He has something to do with the event itself, but not sure in what capacity. Anyway, it makes me much more comfortable sort of knowing him a bit. I'm nervous but excited! I keep imagining my life without the black cloud of debt over my head all the time.

[tobee43]

as pointed out by hhm you debt to income ratio being at 48.6% would be a sign for me that's it's time to file. also you need to know your 401 is protected and can stay exactly where it is, so please don't cash it out to pay any of your bills.

what is your DMI? (Disposable Monthly Income) in other words how much do you have left after all your monthly bills have been paid? how do you look after you do the means test?

here's a site for connecticut means test calcluator :

http://www.legalconsumer.com/bankruptcy/means-test/state.php?st=CT

also as AC mentions go to at least a few attys. we went to 5 free consults before picking the firm we were most comfortable with.

best of luck and keep posting there are many here to help!

[ScoobaSteve]

I am in the negative when I do a rough calculation of monthly expenditures versus my income by about $200 dollars. Thank you for saying my 401K is protected. What about an IRA? I have an IRA of about $7500. I'm well below the monthly and annual means income for my household

[tobee43]

IRAs, including Roth IRAs, don't have precisely the same shields as the 401 but under a 2005 law, the bankruptcy abuse prevention and consumer protection act, up to $1 million in IRA assets are protected in the event of bankruptcy

while there's some controversy about the language in the law, which says $1 million in IRA assets is protected in bankruptcy "without regard to amounts attributable to rollover contributions," . most experts say that phrase should be interpreted to mean that amounts rolled over from employer plans get creditor protection, as well. but others, so called experts believe it means that the $1 million is determined "without regard" to whether the amounts are attributable to rollovers. (to date, court rulings on the language are all but nonexistent.)

in any event, at least $1 million in IRA assets would be protected if you filed a bankruptcy claim. someone will chime in hopefully to add more specifics.