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     | Wednesday, February 16, 2000 - 09:22 am  5 mths ago my wife lost her job (she just happened to be 6 1/2mths pregnant at the time) and was out of work for a month and then found some temp work making 70% of the former. This all happened a yr after we plucked down 12k for are new home's down payment and closing cost and a yr after we had bought 3 cars that required 2-3k down. Before the long lectures of over extending ourselves...its over now so.. Anyhow right before she was laid off we had enough funds to sell the car upside-down on our own (to get more) and Ford apparently agreed and gave us our 3rd car (Expedition) while we would sell our 2nd at a later date. When she got laid off (w/ no severance), we spent the funds to get by on and thus had to make 3 car pymts, mortgage, cards, etc on 1 1/2 income. We took the 2nd car back. We have not paid any creditors for the past 5 mths and 2 mths ago we talked to cccs but have yet to be able to pay them. Creditors still send bills, still call, etc not one has been charged-off but they will soon. My question is (living in Tx), "Should we take the do nothing approach and let them get written off (about 15k in cards and 8k in repo after sale even though they sold it 3-4k under blue bk)or file?" I understand that they can't do anything but get a judgment that does not garnish wages (b/c of Tx law) so what gives? Why file or pay? Any advise or experiences are welcome.
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| | Wednesday, February 16, 2000 - 10:52 am Every time someone drives by me in an Expediton or Navigator I can see it in their eyes: "I'm young, wealthy, and I look it, so there". And, while I go on my way in my old Caravan I think: "Yea, buddy, I hope you never lose your phony job propped up by a phony economy". A lady on our drive has a Navigator and she makes $8.50 an hour. Her husband does construction. Shame on the bankers!!! Unless you come upon a big chunk of cash quick I would think a BK lawyer will be making enough from you to make a half-payment on his/her Navigator.
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| | Wednesday, February 16, 2000 - 11:44 am Dear Anonymous in old caravan, Seems you missed the point, yes I enjoy my exp but the point was that its easy to get over-extended when bad things occur at bad times (called timing I believe). But we are young and healthy if not wealthy. Have no fear fellow christian my wife got a new job a few months ago making more than the one that laid her off so back it up a bit. It's hard to catch up when you put out alot of backup funds temporarily but we are able to live and eat. Again thanks for the hospitality. Anyone with some helpful advise would be appreciated. I'm looking for options, clues as to what happens.
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| | Wednesday, February 16, 2000 - 02:59 pm There is a certain pattern in the anonymous posts. Commendable restraint in your response. You have a relatively small amount of outstanding debt. Probably about the same as the average American couple, but my information comes from a radio program and is also a few years old. If your wife's new job is that good then I would recommend trying to pay off the debts. Obviously you cannot afford to pay 100 cents on the dollar. But if the debts will soon be charged off, as you state, then the creditors would probably realize that the accounts are not worth 100 cents on the dollar, and they might accept less as a settlement. Do not use CCCS for this. If you cannot pay it off through settlement offers that allow you to pay the settlement amount in a year or 2, then bnk might become an option. Otherwise, I opine against bnk. The reason for my opinion is that loan officers tell me that a person can rebuild to "A" credit approx 2 years after bnk with the proper counseling. If you can pay it off at a discount and rebuild credit without having a bnk on the report for 10 years, then that seems better. There is a great difference of opinion on these questions and I doubt that there is an absolute right answer. If the creditors are unwilling to settle for a low enough amount, then when they assign the debt to a new creditor, or when enough time passes, the attitude may change. Some would argue that allowing these to goto collections will damage your credit. I agree. But you say that they are near charge off anyway, so some credit damage is already done. The issue then becomes, relatively speaking, which will do more additional damage: allowing the accounts to goto collections or to file bnk. I am not saying bnk is bad, but you will feel better about your choice (and not look back) of bnk if you first explore this option by making some settlement offers.
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| | Wednesday, February 16, 2000 - 03:04 pm Lost and Confused: They can't garnish your wages, but could they seize your assets? I'm not familiar with how it works in TX. You have 12K plus a years worth of mortgage payments, so whether or not to file BK depends partly on the whether or not they could do this. Anonymous: Your time would have been better spent creating a new conversation about why the economy is phony. We could all probably learn something from that. All we learned from the post you made above is that you don't care for folks who drive SUV's.
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| | Wednesday, February 16, 2000 - 03:22 pm L&C, I have been through a similar situation. Choosing between paying major medical bills or letting my credit obligations lapse was my dilema in 1992. I can tell you this, I wish I had been a true leader in my household at the time. I wish I had taken the time to simply contact all my creditors to explain my situation and work out payment plans to avoid impending collections. I wish I had not gone on ignoring the phone calls, the letters, and all that accompanies such laziness... ultimately leading to the dreaded charge-offs. I wish I had been a man and addressed my families situation in a mature and moral manner. Once I decided to take responsibility for these debts and lack of leadership... it was too late. Our total debts were less than 10k, but that was a lot for us. I considered BK, but through guidance of several mentors, I was able to avoid it. But the charge-offs have been credit killers for me and my wife. We have been working for 2 years now trying to get our financial lives back in order, and it's been a struggle. Negotiating debts and chargeoffs years after the fact is very hard and painful. It takes alot of time to get back into good standing. I would urge you to look at your situation and consider taking it by the horns. Take control and meet it head on. Letting it get worse will add years of pain to you and your families live. It is not too late and I know you can do it. Also in my opinion, do not let anyone tell you that BK is the best option. For some it may be the only choice. But if you have a choice, then choose to avoid it. Recovering from a BK is not all champagne and caviar. Its not the quick fix that is often advertised on TV. Finally, I would also suggest you contact Carreon & Associates. They are specialists in the field of debt negotiation. They can look at your situation and give you some ideas about how to proceed. They are honest and trustworthy, give them a look: http://carreonandassociates.com I guess what I am saying,"my hope for you is that you do not make these same mistakes." Peace, Barry N (fellow texan) CreditMania.com Inc. (Still eating bologna sandwiches)
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| | Wednesday, February 16, 2000 - 04:54 pm It's hard to say what someone should do without knowing their income, expenses, and plans for the future. I do have to say that contrary to Barry's opinion, I have found it EXTREMELY difficult to negotiate with creditors on current debts. The older the debt, the easier and cheaper it is to settle. And as always, CCCS is the absolute worst choice. Also, keep in mind that starting to pay and then paying LATE will hurt your credit more than simply not paying at all.
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| | Wednesday, February 16, 2000 - 05:17 pm Barry N, I'm sure that you mean well, but if you are advising, as an absolute rule, that a person should not file bnk, then you are going to hurt some of the people who are willing to follow your advice. If, on the other hand, you are suggesting that LOST & CONFUSED not jump at the bnk option because of their particular circumstances, then I agree. Bnk is not only a choice for people who have no other choice, but it is also often the best choice when there are other options. In the field of financial planning, it is a tool, and not necessarily an act of desperation. It is intersting that you recommend Carreon & Associates. A representative from that office posts here and, as I recall, on occasion she has recommended bnk over other options. As it turns out, for you I would have strongly advised against bnk. $10,000 in debt is definitely the sort of debt where one should, as you state, try to work out payment plans. (But there are even exceptions there). But $23,000 is a little more significant. If L&C engages in a payment plan, and it is a typical (from what I hear) 5 year plan, then here is what happens. They suffer for 5 years using all disposable income left over after paying basic necessities to fund the settlement installments. We hope that they never get sick, pregnant (again), or have a car break down with significant repair costs, because the money is dedicated elsewhere. During that 5 years the credit report is not flattering. To future creditors they may have the APPEARANCE of someone who could file bnk at any time. They are a bomb about to go off. It is a frightening thing to future creditors. Employment cannot be guaranteed for that 5 years, so they can fall behind again even after 2 or 3 years of suffering and sincere effort. There will be some anxiety with the suffering. And even if, and even after they finish paying, the credit report still shows the negative information for another 7 years. That is 12 years of credit reports with adverse information. But if bnk is filed right now, and finishes in a few months, then that will fall off after 10 years. So which would create a longer period of "bad" credit? Experience and statistics dictate the people who file bnk have an opportunity have an opportunity to rebuild credit. I like bologna and I agree with much of what you say, but I suggest that you consider that bnk is not only a final choice, but may also be the best choice. It all depends. The people who say that bnk is the best solution always are no more wrong then people who say it is the worst solution always.
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| | Wednesday, February 16, 2000 - 05:31 pm L&C, I have received unsolicited offers from creditors, offering to settle for as little as 20%. In these situations, the debtor was late. This is intuitive. Christine has much more practical experience than I do and she seems to have made the same observation. But I still don't know which will affect credit more, allowing them to proceed to chargeoff and therefore improving your negotiating position OR to file bnk. Christine is correct that you do not give enough information. How about: your age, number of children, anticipated children, any illness history, fixed rate or variable rate mortgage, relatively static real property insurance or not, same for real property taxes, length of mortgage, job security, maternity insurance at new job, your marketability in the event of another unemployment, and when do you anticipate making another large purchase (home/boat/car) that will involve a credit check. I also agree with Barbara that you should confirm that you are judgment proof. My state has an anti-garnishment statute, but there are exceptions. And you cannot tell from reading the statute. You can only tell from reading the case law wherein the judges construed the law. Are your other assets also protected?
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| | Wednesday, February 16, 2000 - 06:09 pm I consider my post a friendly suggestion, as well as sharing my experience, strength and hope. We all know that L&C must make his own decisions. But if we give him options to think about, he is far better than I was in 1992. I stayed out of the so called "expert" discussion in the past weeks, and have only felt compelled to share personal experiences in this forum. For fear of being bashed for being a pseudo-expert I always include in my posts that it is pure suggestion. What the reader does with this suggestion is his/her own free will. My observation about the world of credit repair/restoration is that there are many different ways a person can approach it. Much like a lawyer practices his profession... there are many strategies they can use to achieve their results. We need to study all possibilities and then and only then create a game plan. I do not think BK should be the only choice. That was my point VK. I too know people who had no choice but file. In my case I was able to avoid it. I just hope that the pitfalls of a BK are openly discussed as well as the advantages when a client seeks that route. Much like, how many people are really informed about CCCS when they go into that office seeking dire help? In desperate/urgent situations humans tend to isolate, and that is where we can help. Help them get focused on the big picture, in order to make a more informed and confident decision. Rather than turning every thread into a debate, I would much rather see the posts become valuable guidance through the sharing of resources, experiences, and hope. Question: At what point do you tell a person they need to seek legal help? I mean all that is suggested here may best be handled by an attorney. Peace, Barry N p.s. I do not know Carreon & Associates philosophy, nor do I care. What I do care about is that they are reputable,prompt, and get results. A "quality" hard to find in the credit restoration/debt negotiation realm of the Internet.
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| | Wednesday, February 16, 2000 - 06:15 pm Voigtkampff: Just yesterday I was reminded that a bankruptcy actually never really goes away. While it disappears from the "normal" credit report, I believe for loans above certain amounts and certain employment it will always show up. I don't have any actual experiences with that, which is strange since I brokered mortgages for years. Must have been a coincidence that none of my clients had a bk over 10 yrs old. Or maybe a *special* report must be ordered for those cases?
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| | Wednesday, February 16, 2000 - 06:34 pm Barry: The problem with telling people to seek legal help is that all the lawyers I've ever dealt with couldn't care less about their clients. They didn't know a thing about credit, and sure gave a lot of REALLY bad advice/info to my clients. Of course it doesn't surprise me, because bk lawyers only get paid when they FILE. I have yet to see someone who is broke and willing/able to pay several hundred dollars for a REAL consultation. But even IF they're ready to pay, how do they find someone worth paying? To my knowledge, Voigtkampff is the ONLY lawyer to ever post and read here. I greatly appreciate that.
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| | Wednesday, February 16, 2000 - 06:52 pm I know what our philosophy is :)... Bankruptcy should be a last resort and what I mean by that is , if you try to resolve it through negotiations and have the resources to do it ,then it can save your credit rating. On the other hand, if you have no means in which to negotiate your debts then I reccomend a credit program ONLY if the COUNCELOR gets WRITTEN agreements from the creditors to -suspend reporting while you are paying back the debt. If you cannot get those agreements then you WILL end up with bad credit and debt just as you have now. We do get some clients that we advice to speak with an attorney because in our opinion, Bankruptcy is there best option. All to often though you have people filing out of ignorance and over ridiculous amounts and that is what kills me! It's all about education and knowledge. I think anyone who can qualify for credit cards and other debts should have to take a course is responsible spending! You know how many people I have seen file BK on 3400.00! That is crazy! but the person did not know any better & panic set in. If more people would look at their credit limits as money not earned yet, instead of available cash then you would have less BK's. I knew BK attorneys who adviced the clients to file on 3400.00 Why? because he was making 800 bucks on the deal. He did not care about the after affects to the client. But, as with anything else you have scammers and Hero's.! Ps: Christine: I am glad to see you:)---
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| | Wednesday, February 16, 2000 - 07:14 pm Barry N, I don't disagree with your second post. I agree that we should give L&C the options. In fact the title of this conversation states 2 choices. Bnk OR do nothing. You and I both suggested a 3rd choice, settlement. There may be even more, but we'll need more information to know if other choices are available. But be mindful of what you first posted. "If you have a choice, then choose to avoid it (bankruptcy)". This is what you posted after the 3 choices were aired. Even in your second post you state "I too know people who had no choice but to file." You are still reiteratng that bnk is something that is only done when one has no other choice. I disagree. In a world where there are no absolute answers, I can say, as an absolute, that bnk is not just a last choice. It can be the first choice among many. And I am not pro-bnk. Look at my past posts. You have prior actual experience. AND you are obviously sincere. Hard to fake that. That makes it more likely that someone will follow your advice. It would be quite reasonable for L&C, or someone else, to read your 1st and 2nd post and be motivated to stop considering bnk as a choice. Ever. Hope it doesn't seem that I am attacking your character. But consider not only what you WRITE, but how it might reasonably be READ. The unfortunate thing about misinterpretations is that we do not always find out that our words were misread. And we cannot always fix it. Christine, I really really would like more info about bnk showing up after 10 years. I've never heard that before. And I used to visit a number of websites. Maybe it is true, but because so few people know it, it has little practical effect. I find it so difficult to give advice when something that has been consensually validated, like the 10 yr reporting period, turns out to be in doubt. Makes me wonder if I KNOW anything.
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| | Wednesday, February 16, 2000 - 07:53 pm I've read those statements about the extended reporting for bk's with the credit report explanations. I have never seen it happen, which is probably why I forgot about it. I can't imagine that any lender would care. But it might be important for executives, people who need special clearances, etc.
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| | Thursday, February 17, 2000 - 03:20 am Here are the details: Net Mthly Inc: 5,100 Mortgage: 1,100 (no escrow) Est Home Mthly Tax: 340 Home Mthly ins: 50 1st Car: 536 mth 2nd car: 489 mth car ins: 180 mth Current credit cards: 180 mth min CCCS prop: 350 on behind cards for 5 yrs... (Before they were behind: 700 minimum) Loan: 290 Paying parents back loan: 300 mth Paying other parents back loan: 125 mth Utilities: 200 avg mth Lunch money for us @ $5/day each: 200 Groceries (now high b/c of baby): 400 With quick math one might say who there is a lot left but... Future Student loans awaiting our graduation of 75,000+k est 650mth for 20 yrs or $900 for 10 yrs House is an ARM with a 3 yr pre pay penalty (We'd love to sell b/c the house has increased 20+k in value in one yr but 6 mth interest penalty hits is sold before 3 yrs and realtor commissions are outrageous) B/c of not having an escrow we owe 3,600-4,000k on home taxes, home assoc, school, M.U.D., etc (taking out s.loan this yr to cover) I refuse to stop paying back our parents even temporarily b/c we leaned on them way too much over the yrs (we owe each about 15k). Good news is that we make alot (to bad our youthful ignorance watches it go out the back) w/o having graduated thus our income can still increase significantly(hope,hope) but we have to stall graduating to until we can pay the grim reaper (s.loans). My job is stable as any but I can lean back on a 401k, pension, disburements and severance if need be. But she has no backup in case of job loss (easy to get a job w/i 80% only). We are finally getting a savings again and I have decided (good or bad) that the budget is the budget and we have to save a solid amount to fall back on in the future (or continue to go down this road)since one car is leased and I'd like to have the ability to pay it off in 2 yrs (20k then)through a combination of 401k loan (if needed) and savings but still leave funds for backup and use that 500 mth slot for school loans. Plus in a climate of rising interest rates the house may not be affordable in 2 yrs (but we can sell for a hefty profit then). Letting them go appears easy b/c once our s.loans are added to our debt/ratio then we will be a high risk regardless. I'm trying to get use to no credit except for big ticket items which we need no more of. It be nice to say trade in what you got for less all the way around but we would not get approved w/o $$$ down. If I filed it would rid me off the repo charge of 8k plus 15k in cards (the loan is co-signed by parents so no way it goes away). But 5k of debt is from a furniture bill that would have to be payed some how or lose it (correct?). I do not know exactly what judgement proof is? no boats, or luxory items besides that described. The time that we have not paid anyone has helped catch up (still a month behind on house).
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| | Thursday, February 17, 2000 - 03:47 am Forgot about gas:160-200 mth Net Income is little higher actuall by 2-300 b/c of ot (but I do not want to relie on this). Thanks for calling my first response commendable. I only went here to find truth about what lies ahead and for other info since many read but few post. All opinions are welcomed but I also want to know what are the ramifications of all choices. I've read about BK and have an idea (like to know ramifications on employment and the like), no on has ever said what happens during and after cccs like programs, and what happens with charge-offs. Do the chargeoffs go away due to bad debt expense and can/will they sue if so how much is the threshold to warrant them sueing, on furniture can they just walk in and take it (would they bother since its 5k debt but on many things, nothing that was originally 5k or even 1.5k new) or can I expect a life of endless "out of area" calls and letters. Plus, there is no way I'd ever pay 8k for a car I no longer have especially when they claim they sold it for 4k less the drop bottom book (the dealer offered me 2k more then what they sold it for and that w/o nego.) 5 yrs from now both cars, loans, cards will all be paid in full (except my parents loan 125 and s. loans) but until then its tough. I really do appreciate the caring responses. After I made my first ever post and got a response, I was wandering why I bothered opening my private life out but y'all (yes I'm definately from TX w/ that language) came to help. Thanks.
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| | Thursday, February 17, 2000 - 04:09 am I have some bad news. I count approx $3,800 in necessary expenses from your list. You did leave out home maintenance/upkeep (occasional painting for example), lawn/pool maintenance, out of pocket medical (aspirin, copays, contact lenses), car maintenance (tires, oil changes, etc), clothing replacement, laundry & dry cleaning, and more. I'll add a conservative $300/month for that. Which makes a total of $4,100 in necessities. I ignore the $290/ month loan payment and the credit card payments. Those are not basic necessities. If you want to file bnk you must be able to represent to that court that you have no money left to pay creditors. Obviously you cannot say that you have no money left to pay creditors because you are paying creditors. And your parents are creditors too. You canot argue that the $1,000 left over is mnot enough to pay, so you should be excused from the debt, because the response is that it is still better than paying nothing. Though if you went ch 13, you would only have to pay what you can afford to. Now the student loans are no longer dischargeable in bnk unless you have undue hardship. So that is a monthly payment. And you are behind in property taxes. If that is enough to account for most of the approx $1,000 left over each month, then you qualify for a ch 7. Though I am not addressing whether or not you might lose any property if you file bnk. I don't know your property or your state's exemption scheme. It now sounds like you should file bnk. If CCCS proposed a 5 year payment plan (as you state) then I dout that you could negotiate or afford a 1 or 2 year payment plan that you negotiate on your own. You are obviously strapped. And even though the debt is relatively small, it looks like you need every penny to deal with student loans and other debts that survive bnk.
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| | Thursday, February 17, 2000 - 04:28 am I do have to say that contrary to Barry's opinion, I have found it EXTREMELY difficult to negotiate with creditors on current debts. The older the debt, the easier and cheaper it is to settle. I'll agree and add a little as well. If you think current debtors are difficult to settle with, try an old debtor that is successfully garnishing your wages. They don't HAVE to negotiate a settlement - they're getting money NOW. I managed to convince them that it would be in their best interests to settle for 50 cents on the dollar of the original debt, because it would have taken them 15 years to collect it a few bucks at a time. But it WAS a bear to work with them. While it disappears from the "normal" credit report, I believe for loans above certain amounts and certain employment it will always show up. I've done quite a bit of investigation on this in the past (consulted attorneys, the three CRA's, mortgage brokers and officers and other financial professionals) and the answer depends on what you mean by "show up". When you say "show up", are you referring to showing up on a credit report generated from data obtained from one of the three CRA's, or from other sources of information? Once it's gone from your CRA history, it's gone from your CRA history. They do not maintain records for eight/ten/twenty/thirty years just in case you happen to apply for a certain loan or a certain job. They (the CRA's) can't, as it's against the law. HOWEVER - the CRA's are not the ONLY source of information used when someone is performing a background check on you for a loan or employment. The BK may "show up" twelve/fifteen/twenty years later, but the CRA's were NOT the source of the information. You should know this, as credit reports that must meet the residential mortgage credit report guidelines utilize more than just the CRA's information (IF the company assembling the RMCR are doing their job - searching public records, etc.) In addition, most applications for loans of ANY type ask you something to the effect of "have you EVER filed for bankruptcy". If it's beyond the 7/10 years, then it's up to you to decide if you're going to tell the truth or tell a little white lie (which, of course, is misrepresentation and grounds for them to deny or rescind down the road). However, any inquiry pulled by a potential employer for a position that pays more than $75k per year OR an inquiry for loans over a certain amount can remain on your report indefinitely (source: the three CRA's). rcb Bielak's Consumer Credit Information Center
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| | Thursday, February 17, 2000 - 04:40 am Now the very bad news. The money that you refuse to stop paying your parents, you have to stop paying. When you file bnk you must list any single creditor who was paid more than $600 in the 90 days before filing bnk. But for family you must list money repaid in the last year. You've paid over $400 a month to parents so this could be a bit of money. This is called a preference payment and under §547 of the bnk code the court trustee could pursue that and demand the money back from your parents. There is an "ordinary course" defense, but I would not rush towards that fight. You might decide not to disclose the preference payments. Abandon that thought. If the trustee asks for bank statements or tax returns and finds out from those documents that you lied, then your parents lose the money AND that is just the beginning. Hell to pay. It's federal court. The only way to guarantee winning a fight is not to have the fight. If you wait one year after you cease making payments, then there is no longer a requirement that you disclose those payments. They cease being preferential. Then file bnk. But a trustee, if they find out somehow (from list of creditors), might still allege that the payments were fraudulent (not preferential) in that you were simply hiding money with your family. There can be longer than a 1 year period on this (depending on the state), but this is VERY unlikely. After bnk you can do whatever you want with your money. You can eat it or make paper airplanes. So you can surely repay a old discharged creditor (like family) out of moral obligation. But if you wait a year before filing then you may have built equity in your car. In my state, the trustee can take away the car if there is more than $1,000 in equity. I'm not talking about the car lease. Obviously do not use the 401k or other pensions to pay off the car. In my state such assets are exempt. So in Florida, that would mean that you took a protected 401K asset, and used it build equity in a car (that would have otherwise been safe because there was no equity) and now you lose the car after exhausting the 401k. Don't touch the pension plans. You have a complicated case. I cannot advise you. This is general information just to give you an idea of the risks. There will be a great deal of strategy needed. And how you go with one option to one issue may create new issues, and may also add or take away options on other issues. Too complicated for me to address on this forum. But I now feel that ch 7 bnk is the best solution. Clearly. I am in the minority in this opinion, but I feel that CCCS can be good. But not with a 5 year plan. Death to credit. Bnk is definitely an option for you. It simply must be done perfectly. Speak to several attorneys in your area and do not trust what any single attorney says.
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| | Thursday, February 17, 2000 - 11:04 am Thanks for the insight, It appears that it would be of benefit to go thru a cccs but lately (today,yesterday) I'm getting calls from 2nd parties. I can't pay them yet but could soon but most want to know when. Well when could be in 2 wks or 2 mths but a paper budget vs an actual are two different things. I do not care to live paycheck to paycheck b/c the next disturbance puts me back in square one. Can anyone tell me what happens if I just ignore them? card 1- 5,000 furniture card 2- 4,200 dept store card 3- 1,200 visa card 4- 650 visa card 5- 2,200 sears card 6- 1,300 discover repo 1- 8,000 voluntary surrender 8k left after sale We get by just right on our budget w/o these bills (I'm excluding the 8k repo b/c its absurd IMO) and could make the aforementioned 340 pymt but not for at least 1-2mths.But the creditors want dates,amounts,or else. I'm past the point of feeling embarressed,ashamed and maybe my non-chalent approach bugs them. I explain what happened (they seem to take it harder then me now) but it does not change the here and now calls,questions. Plus, if I start paying cccs will the money get accepted (absurd question probably but I need truth not assumptions) since they have passed them on to "X,Y,Z assoc". If they get charged off and thats it w/o any loss of property (in tx everything is out of their grasp, except for the secured card on furniture, I believe) then why pay if my credits shot. I check the bureau last time and my score had dropped to mid 500's. How low can it go? Plus I could use the money from not paying the chargeoffs to help on down payments yrs from now. Either way the credit is low now (correct?). I do not want to file bk b/c I realize that the payments to our folks would come under scrutiny. So its either cccs or do nothing or settle (if I settle later, will they accept 50% on the dollar in payments over 1 1/2yrs or so interest free?). Please help, It's coming to a bottleneck/crossroads. Thanks for everything so far.
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| | Friday, February 18, 2000 - 12:50 am Buy some time by hiring a bankruptcy lawyer to represent you. Nobody can tell you what your creditors will do. Well, unless they're psychic. Every company uses different contracts and has different policies, which frequently change. I think you need some time. You're very stressed. Important decisions shouldn't be made in a hurry under stress. For a few hundred dollars you should get a few months. You tell the creditors that you are filing a Ch. 7 and you refer them to your lawyer. That way they don't bug you any more. You might even try to negotiate with the creditors after a few months. Although I recommend you have someone else do that on your behalf. Not the CCCS, but an independent person/biz such as people who post here. Or your lawyer? Do lawyers do that? Does anyone have experience with negotiations literally days before the filing? I've never seen it done, but seems to me it would be a great time to negotiate. Anyway, if you buy yourself time, you can do some more research, work with the numbers, possibly with the creditors, and then hopefully make the best decision. What does Voigtkampff think about that strategy?
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| | Friday, February 18, 2000 - 02:26 am I see myself ten years ago prior to being reorganized twice and getting kicked by life. I settled with most of the creditors and used up the equity in my home. I was so down I couldn't find a decent job for over a year. My income was 30% of what I previously made. Some creditors wouldn't settle and ultimately got zero when I had to declare a 7. The mortgage people over valued my home and the value they had was way over the actual sale price they will ultimately get--by about $100,000. I spent 3 years trying to get the credit straightened out and used up all my cash. My advice is to do the 7, get it behind you and go on with your life. It was a real hard thing to do but now that a year has almost gone by I realize how stupid my efforts were and that I shouldn't have tried to do the honorable thing and pay something. I should have protected myself.
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| | Friday, February 18, 2000 - 05:56 am My question on bk is will the court recognize the student loans are hanging around (growing interest daily on unsub part) and are only not due b/c we are stalling our graduation. If they recognize the impending monthly debt then it should be easy to recognize the need to file but if they don't I've blown $1,000. I talked to 3 bk lawyers who are board certified and only do bk and they seem very knowledgable of the bk law and the one I'm leaning towards has 20 yrs exp and is a trustee as well but if it will get thrown out then I'd rather try and negotiate later down the road for 50% or so in payments over 1-2 yrs if possible. BK would work out if I could be assured of it not being thrown out or converted to a 13. Thanks for the advise. I'm starting to get an idea but will continue to stall a few days until I'm firm in my choice. Thanks again any more advise is welcome. Does anyone know what happens once a debt gets charged off?
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| | Friday, February 18, 2000 - 07:29 am The Schedule I of the bankruptcy petition, where you disclose your income, does have a section where you state any change of more than 10% expected in the next year. Unfortunately, the Schedule J where monthly expenses like student loans are listed does not have a section where future changes is listed. I am sure that it would not take too much in the way of creative drafting to list it. And even if the trustee asks about whether you can afford to pay bills, you could always explain the student loans at that time.
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| | Friday, February 18, 2000 - 01:58 pm Regarding using credit information over seven or ten years old, it is in the Fair Credit Reporting Act: http://www.ftc.gov/os/statutes/fcra.htm#605 "Exempted cases. The provisions of subsection (a) of this section are not applicable in the case of any consumer credit report to be used in connection with (1) a credit transaction involving, or which may reasonably be expected to involve, a principal amount of $150,000 or more; (2) the underwriting of life insurance involving, or which may reasonably be expected to involve, a face amount of $150,000 or more; or (3) the employment of any individual at an annual salary which equals, or which may reasonably be expected to equal $75,000, or more."
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| | Friday, February 18, 2000 - 02:24 pm Thanks Greg! I made a new topic for that subject as it is rather important. And I hope I never ever see anything as ridiculous as Rbielak's posting about extended reporting and inquiries staying on forever.
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| | Friday, February 18, 2000 - 02:52 pm To Confused; I am sure you don't want to hear about how you have have really overextended yourself. This isn't a situation that crept up on you before your wife lost her job. From your depts it is obvious you have had some serious problems before hand. The loss of job just made it worse. My suggestion is very basic, nothing like the more experienced people here. You need to cut corners. You are under a misconception that you make good money. My husband and I make as much money as you do and I wouldn't dream of carrying balances on as much as you do. I thought we were in bad shape because we owe about half as much as you do (in medical bills), And $245 on the VISA. You can trim your budget even more. Brown bag your lunches to work. That saves an additional $200. Sell the cars and drive a cluncker that doesn't require full coverage insurance. Cut your cable tv, dinner out. Cut your food bill by making simple meals (Yes you can live off Ramon for a couple weeks!). Ask your parents if you can cut the monthly amount you pay in half them for a couple months to get back on your feet. They must know your situations if they have loaned you money. And from personal experience don't take out any more in student loans that you have to have for tuition and fees. The little extra adds up. From as much as you have in student loans you should be getting close to being a nurosurgeon. I can empathize with you. I hope you are able to get out of this mess. In the mean time, stop trying to compete with the Jone's. It's not worth the loss of sleep.
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| | Friday, February 18, 2000 - 04:56 pm It does seem like you are overextended, which is why I wonder how you think that you can afford CCCS. It seems like you are being unrealistic. People tend to get emotional in this matters, and they do not behave rationally. For example, why are you in such a rush to decide what to do? Is there a rational reason, or do you just WANT to start doing something? What you want is not always what you need. There is a place for emotion and this is not it. I suspect that Christine was right that you are overly stressed. Take some more time on this.
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| | Saturday, February 19, 2000 - 06:30 am We were not over extended before (IMO) b/c alot of the cards got charged up for cash and the others were to be moved over to s.loans which would be paid back interest free while in school. Our imcomes "should" continue to go up 10% plus a year until we reach a stopping point and even then can expect 4% each a yr. We have always spent very little on miscellaneous stuff and larger amounts on house,car, etc. We were in the process of paying everything off and shortening out budget (we do not pay cable, internet, cell phones, eat out, etc). I'd consider brown bagging but if you count the dollars and cents of the bread, cheese, meat, spread, chips, brown bag, ziplocs, then it still costs approx $2.50. We only spend about $3.50/day. The remaining dollar is spent on a splurge of a soda on or from work. I want a budget that has cuts that are permanent not misc stuff that eventually creeps back. The changing out cars does not work b/c they are under a yr old and thus would loss $2,000+ on each. We are fine currently and have the funds over to cover a pymt if each creditor would back out the absurd fees that made each card 20% higher than before. For those that do not know, they (creditors, reduce limit then say over the limit fee $25, late fee $25, higher interest rate b/c of the former 26% now even higher finance charge $88 and the bill starts to accumulate exponentially. Our furniture account was opened 2 yrs ago w/ a balance of 5,000. We paid 150 mth for two yrs and had it down to 3,000. Now its currently back to its original balance. Fair? Maybe but not of much help. We spend very little on other spending b/c it goes into the groceries category. Everything is new so small repairs or improvements are not necessary. The student loans are the future stability issue but upon graduation our income should increase w/ a new job/title. I do not believe we make alot for an avg american but I do believe we make alot for two college kids. Nothing to write home about but something to be proud of. I'm thinking that the best approach will be to talk to each creditor and negotiate down the balance to something reasonable (near the original last current baclance before the fees,rate hikes, lower limits, etc)BTW the creditors don't try and close the account for no payments b/c they seem to enjoys the over the limit fees ( I assume it gives them more room when its time to negotiate or since many go the cccs route they pay more but get a reduces rate from 25% to 14%). Thanks for the help. Sorry if anyone miss understood and thought that I implied we were hunky dory. Of course things our over extended but there is a light at the end of the tunnel (I hope).
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| | Saturday, February 19, 2000 - 10:21 am Kathy's posting was NOT appropriate as I specifically outlined in the NEW Forum Policy. I expected your car situation to be just as you described it, and the creditors are screwing you royally, as usually. That's why I feel that they DESERVE the discharge. I personally have never owned a new car, and I don't plan on it, ever. I don't think YOU should have bought new cars, but you just did what they told you to do in the ads. I cannot relate to people buying furniture for thousands of dollars. My most expensive purchase ever was a 2 or 3 hundred dollar bed or futon. I'll never understand why people like to work so much they make sure they have to. You are a MODEL american, corporate's dream consumer.
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| | Tuesday, February 22, 2000 - 06:45 am So, re: Greg's posting about exemptions to the 7-year SOL for reporting: If certain "exceptions" apply to the 7 year clock, then that would imply that the CRA's keep the info for more than 7 years (forever?) - else what would be the point of having the 7-year clock "exceptions" list? So do the bureaus keep the info longer than 7 years and simply do not report it to general requests, or do they DELETE/PURGE/ERASE it after 7 years?
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