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     | Wednesday, June 28, 2000 - 09:19 am  >Okay I have a really hard question that I have been fighting with for a long >time. I am in the process of considering filing bankruptcy. I am 25 >single, I own a home and will own my car of five years in about two months. >I like many other people here on this page made some major mistakes. I >struggled to make those mistakes right for two to three years. And last >year they just became so overwhelming that I battled depression for about >six months because of my financial situation. I have now come to terms that >although I make very good money, it is not enough to go around. Especially >with interest rates eating away at any amount of money I can apply towards >my credit card debt. Basically never affecting my principle. I had a visa >card that I got my freshman year in college and the balance was 900. Over >the past year alone they have added 100% of interest to this balance, >although I think that is there right, there is no way I can work towards >paying all of my debts off within a good time period if that is the way that >are being handled by the creditors. My dilemma is this: >I am struggling with the decision to reaffirm some of the debt I owe but I >don't know if this is a good decision. Should I just try to wipe the slate >clean and try to rebuild my life? Considering I am only 25 the bad history >will be on my credit report for seven years after I file that would make me >32 with (if god is willing) much of life in front of me. And because I >already own a home that I have been responsible with does that help me in >anyway? Bankruptcy for responsible people who were brought up to be honest >but just made some bad decisions or were put in circumstances they had no >control over is a very very defeating thing. And like I said, I feel very >bad, I at one point thought that I was a complete failure and it was so hard >to change my mind set to the fact that I just made some really bad decisions >and god has given me my health a fine roof over my head and a good job to >supply me with the nourishment I need to go on. But I just don't know if I >am being unrealistic in my thought process. I was thinking if I were able >to reaffirm some of the accounts I would possibly be able to keep those >account (with a much lower limit of course) but this would assist in helping >me to rebuild my credit. I find that I want to believe all that is said >about you being able to once again possibly purchase a home about three >years after bankruptcy. I have basically accepted that from here on out I >will have to be on a cash basis. And what of this new trend with employers >wanting to run a credit report on possible new hires? Will this now limit >my professional future as well? And is it also better to go ahead and file >if you know that it will not be possible to pay off the debt you owe within >the next three years? Also, it was advised to me not to reaffirm anything, would this not give me a heads up on re-establishing my credit? Couldn't I do that by reaffirming one credit card account which I have been told allows you to keep that account.
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| | Wednesday, June 28, 2000 - 12:32 pm Please read http://www.bayhouse.com/discus/messages/123/655.html?962170897 and that should answer most of your questions. Please post here any further questions and try to hit return every now and then for new paragraphs. It's really hard to read without any white space. Re reaffirming one credit card: Which card is it? How much do you owe? What's the interest rate? What's the limit? How long have you had it? What's the credit report for this card look like?
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| | Wednesday, June 28, 2000 - 05:43 pm I recommend that you don't reaffirm anything. Discharge it all, get a secured or high-risk credit card and mail a copy of your discharge papers to all three credit bureaus to make sure they have everything right.
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| | Thursday, June 29, 2000 - 05:02 am I would recommend following up on the bankruptcy papers with the credit bureau. they are idiots and I am still trying to get them straightened out almost a year after discharge. I used to feel sorry for them earning minimum wage but now it is just frustration. they tell you anything and are no better than collection scum. they don't know their own rules. trying to call them they keep you on the phone for 15 minutes before getting a human being. writing to them is a total exercise in Alice in Wonderland rules. My favorite is when they send you a copy of the credit report. You write them back with a copy highlighted with the errors. they send you back the entire package asking for a copy of your driver license and social security card. You send it back with the request. they send it back for a copy of your income statement. Round and round and round until you are ready to go postal, hop in a truck and get some action. Again, chairman mao was right.Where does power come from? It's enough to radicalize the most conservative.
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| | Thursday, June 29, 2000 - 07:35 am I also wanted to let Mieko know that having an employer pull your credit report doesn't rule out the job. I had a BK and two open judgements when I applied for this job, and they did pull a report (since they classify it as a 'sensitive position'). No problem. And to Senator, my favorite one is when they send you back a correction to my dispute with the page that says Action Taken - Item Deleted. Yet it is still on the report on the new copy they enclosed. I've had this happen twice already.
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| | Thursday, June 29, 2000 - 09:15 am Shylock, don't you think it might be worthwhile reaffirming a card with only a few hundred dollar balance?
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| | Thursday, June 29, 2000 - 10:56 am I am also wondering if by reaffirming an account will you actually be given a new account with a smaller limit as a lot of the credit card companies say they do? Also, the card I would like to reaffirm is my discover, I only have a couple hundred dollars owed to them in the first place. I have heard of people not including certain accounts within there filing. If I were not to include them and were to pay them off on my own what are the legal risk? And since one of my creditor is a sears account is this something I shouldn't even mess with considering sears and discover use to be one in the same.
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| | Thursday, June 29, 2000 - 12:06 pm My personal experience with Discover has been rather bad. It was many years ago when they wouldn't give me a card while I didn't have a single late payment. The reason: our phone wasn't in MY name. On the other hand, I've seen them send out pre-approved Sears cards with $3,000 limits 3 weeks before the Ch. 7 filing AND they never closed the account after the filing and didn't decrease the limit either. That account wasn't included in the filing because no money was owed. If you post their customer service # I'll give them a call and get their general guidelines. A Discover card would be a good one to have after bankruptcy.
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| | Thursday, June 29, 2000 - 12:48 pm There customer service number is 1-800-347-2683
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| | Thursday, June 29, 2000 - 03:51 pm Why would anyone want to reaffirm anything? First of all it will have a comment in it of debt reaffirmation so who knows how negative a thing that is? Plus you can just take $300 and get a secured credit card and pay your $35.00 annual fee. That's a lot cheaper than reaffirming a few hundred in debt. Plus the secured credit card is FOR SURE going to keep your account open while the other reaffirmed debt might merely get you to pay them off and close the account on you.
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| | Thursday, June 29, 2000 - 08:42 pm That's what I'm trying to find out, the little details. Was on the phone for a while with Discover earlier this eve, got transferred around and eventually disconnected. So I'll try again tomorrow. I've read so much bad stuff about the cards targeting people with bad credit (see Providian's settlement) a Discover card sounds good.
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| | Friday, June 30, 2000 - 11:49 am Just went through 20 minutes of transfers and holds again to finally get a recording: The bankruptcy department is closed. Regular business hours are Mon - Fri 8am to 4pm EST. So, West Coast customers have to call before 1 pm, and none of the many people transferring me around seemed to know that. Looks like Discover doesn't take bankruptcies very serious. I'll try again Monday ...
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| | Wednesday, July 05, 2000 - 05:55 pm I don't think reaffirming is as easy as everyone assumes. Prior to ch7 I had a Capital One and a First Consumers card. Neither would allow me to reaffirm even though I offered to. One year later, I am now getting unsolicited unsecured offers in the mail. I've started a collection of them. My advice: don't reaffirm anything unless you like their logo or something else. Take a year, regroup, reorganize, start thinking differently than you did in the past. Become radicalized
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| | Thursday, July 06, 2000 - 06:54 am You are technically required to list all debts. This is a matter of law. Sometimes at the §341 creditor's meeting, while you are under oath, the trustee will ask if you have listed all of your debts. In my district, they sometimes ask for the last few months of cancelled checks and will notice if you have made payments to a creditor that is not listed in the bankruptcy schedules. Although I have also heard that Sears and Discover are both related (either directly or through Greenwood Trust Company) their computers do not seem to be cross-referenced. The benefit of listing the debt is that if you don't include it and just pay it, then you must ordinarily pay the full amount. But when you list it in bnk, the creditor often feels that they must motivate you to keep paying. SO they often agree in the reaff to reduce the principal balance in exchange for your reaff. Of course they also reduce your credit limit. Sears usually does this, unless the debt is secured. Another benefit of reaff is that you start out with an unsecured card after bankruptcy. Last time that I read stats on it, only 17% of people get major unsecured credit cards in the month or two after bankruptcy. Of course, there is no benefit to reaffiriming a large debt. It defeats the purpose of bnk to walk out with a huge debt. If you do not include it in bnk, and continue paying, then an intelligent creditor should just be happy that they are getting payments. Some creditors do not feel that. For example, Amex always cancels people after bnk. Even if they were not listed. So I have seen people omit Amex, make a year's worth of payments after bnk, and then get canceled when Amex does a maintenance inquiry and discovers the bnk. That being said, I hate reaffs. Unless it is very small amount I really try to convince people not to do it.
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| | Thursday, July 06, 2000 - 12:06 pm I figured that all debts would have to be listed. Of course a 0 balance isn't a debt, and that seems to be a great way to keep cards to re-establish credit after the discharge. American Express is sort of a credit monitoring service, found that out over 10 years ago when they sent me the account closure notification after ITT had reported incorrectly on my credit. So I finally got through to Discover. Was told that unless I provided the account number, they were not going to discuss "confidential" information. I wanted to know whether the account was guaranteed to stay open. I've read about other creditors who'll close your account if you're late just ONCE. Apparently, the Discover reaffirmation procedures depend on you and your account. This (non) info was provided by Rosa, with no last name or extension. When I asked whether there is only ONE Rosa in the world she responded "pretty much." I guess I'm a little out of touch since I haven't dealt with bankruptcy/collection people in a while. Forgot how arrogant and annoying they are. If this was *my* account I'd either 1) "pretty much" charge it to the limit before the filing. Maybe the bankruptcy attorney takes Discover? What are the laws on that? 2) pay it off and not list it and hope for the best. I wouldn't bother with reaffirmation because they don't provide any info. And if you call and DO provide your account number, they'll probably close or freeze the account immediately, eliminating the other options. Mitch is definitely right about reaffirming only very small amounts. I wonder how those accounts are reported? Is there a notation "reaffirmed?" Or any other derogatory notations? Do they mention credit reporting in the agreement? If anyone has an affirmation agreement, I'd like to have a look at it and post it (of course without the identifying data.)
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| | Thursday, July 06, 2000 - 12:59 pm Okay but if you are willing to take the risk that the Discover card may or may not be cancelled after the bankruptcy goes into effect would I legally be able to pay it off before I finish with my bankruptcy proceedings? I thought that if you were caught paying off certain accounts before your proceedings were finished in order to keep the lines of credit your bankruptcy filings could be denied, because you were basically making the decision that one creditor is more important than another the bankruptcy laws could force that creditor to return the funds paid to them and split that money up amongst your other creditors. So basically my question is, how long does the creditors account have to be at zero before I can file my court papers? I am do to make my first payment towards my bankruptcy filing on the 17th of this month and I would like to keep my discover card if possible, my last payment will be due right before my attorneys are due to go to court. So if I paid it off before that, using cash and not a check (since it was said that they sometimes request cancelled checks) would I be in violation of bankruptcy laws? Also, thanks everyone for all of the helpful information I have gained more from this site then what I have gotten from my attorney.
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| | Thursday, July 06, 2000 - 01:24 pm If the account has no balance, they aren't listed. If there is a zero debt, they aren't listed. You run the risk of violating the law if you favor one debtor over another by paying them ahead of another and creating a preference. Unless it is an obvious payment of several thousand dollars I can't believe a creditor will file an objection altho you never know these days. Also, your state might have some rules that enter into this discussion that you need to be aware of. Have you talked with the attorney about doing some prebankruptcy planning? Good ones can do wonders if you know about the forthcoming event about a year in advance and are a resident of a great state--like Florida or Texas.
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| | Thursday, July 06, 2000 - 03:08 pm You state that you are due to make the FIRST payment. Does that mean that other payments are following? Is this a chapter 13? If so, that changes everything. The bankruptcy schedules require disclosure of payments in excess of $600 to any one creditor within the 90 days pre-bnk. The schedules also require disclosure of payments to insiders within the 1 year prior to filing. Yes, this is called a preference or insider preference. And no, the creditor receiving the money would not object to it. But the trustee can, and should, do so. If they recover the money from the creditor, they get to keep a certain percentage for their own pocket. The rest basically goes pro rata to ALL creditors. But what if you pay only a few hundred over the course of that 90 days. Then it need not be disclosed on the schedules. Yes, the trustee sometimes demands bank statements and cancelled checks. And while they might thereby discover that payment of the debt, who cares? It was less than $600. You had no duty to disclose it. And if the trustee tries to pursue, it would be a complete waste of time fighting for so small an amount. And the creditor can win such an action anyway if they can show that the payment was made in the ordinary course. If you insist of keeping that card for some emotional reason, then reaffirm it and hopefully get a reduced principal and/or interest rate. This sounds like a court-approved preference, doesn't it? But it is legitimate. Sorry but I don't have a scanner to send a reaff.
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| | Friday, July 07, 2000 - 07:22 am No it is a chapter 7, and when I stated "First Payment" my meaning was that my payment of attorney fee's for the bnk have been split to three payments. From the responses posted it would seem as though my idea of trying to save the discover card account would be unrealistic depending upon the laws of the state of Arizona.
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| | Friday, July 07, 2000 - 12:25 pm I don't think that the state laws make much of a difference with respect to the reaffs. I'm too lazy to read the posts again, and I honestly don't fully recall the issue. So at risk of repeating someone's post, you can always just: (1) list Discover in the bankruptcy; (2) see if they offer reaff under favorable terms; (3) if not, then call them and solicit an offer; (4) but don't reaff if it is more than a few hundred dollars (in my opinion). Instead walk out of bnk with no debt. Also be advised, that at least here in Fla, if you sign a reaff, that you have 60 days to change your mind.
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| | Friday, July 07, 2000 - 01:17 pm Mieko, I thought the Discover balance is only a couple hundred dollars? Why not just pay them off and not list them?
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| | Thursday, July 27, 2000 - 07:51 pm I too fought with the decision to reaffirm or include accounts in my filing. I came to the decision opposite of the advise given here. I decided to reaffirm my credit union accounts (2 signature 1 credit card). About $8K total. My reasons for reaffirming did not stem from reestablishing credit although I believe that since these accounts have been open for a couple of years with no lates, it could only help with scores because part of the FICO system's calculations involves the payment history of accounts. Much less positive effects are seen on an account that has been opened for 3 months as compared to 3 years. When this time difference gives a minimal difference in your scores I do not know but I do believe it helps to see that you have made several payments without being late when a creditor is looking at your report. Anyhow, I kept my credit union accounts because I was assurred that my credit status with the credit union would remain unchanged and thus I still have credit available to me to purchase a vehicle or even a home. They know that as long as I work for the company (and this is not the type of job you leave intentionally), that I am a good credit risk because their payments come out of my paychecks. Thus, it was worth $8K to be able to pay 9% on my credit card and signature loans as well as a very low interest on a home or auto. Also, I was assurred that if I did include the credit union in the bankruptsy, I would be unable to do any business with them in the future, and forever is a long time when you will be working for 25 or 30 years. Also, $8K is less than 15% of my annual gross so I consider this to be relatively a small amount that I can pay-off in 1 year's time.
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