Bankruptcy Questions, please help!!!
 

I need some opinions and some experiences from some other people on filing bankruptcy. My husband and I are swamped with credit card debt which has originated from about two years ago when we moved to try some other job opportunities and none of them worked out and we ended up using our credit cards to pay bills to make it month to month. Well that didn't work out for us so we moved back to our original home and hubby got his old job back. In the midst of all this I had two kids and my income has been limited because I work for barely more than minimum wage to avoid child care costs for two children. If I took a higher paying job the money would go to child care. We live paycheck to paycheck, can't buy a house and we have no money for savings because of our credit cards. We can't ever seem to get ahead. We don't have any extra money to pay down credit cards and no money to put in savings. It depresses me every month when we barely make ends meet because of what we owe, roughly $18,000 in credit cards. I just want to start over and get a fresh start. What do you all think?? Any other options I am missing?? How bad was filing bankruptcy and was it worth it? Thanks

All I know is the bankruptcy laws have changed so make sure you look into it very carefuly before you decide.

wrked out fine for me.. and now after one year i was even able to get a new car loan at 10% . the laws have changed, however, the changed so that higher income persons couldnt just use it as a means to ditch their debts, an attorney will go over your income and debts to see if it is possible that you can work out a way with the people to owe to create a payment plan... if your basic living costs are higher than your income the new laws shouldnt affect you....

to answer your question? yes it was very worth it to get all of the bill collectors off my back.... as soon as my bankruptcy was finalized i got at least 10 applications for credit cards every week..... BUT now that a visa debit card is accepted as readily as a visa "credit card" I WILL NEVER EVER ... have another credit card ...!



p.s google the bankruptcy laws for your state... and make sure if u decide to do it that you write down every debt that you owe and make sure u dont miss any...

Thank you for your advice. I checked with my state income requirements and we are below the limit they give. We already have our cars, but no equity in them and from what I read we could keep them if the payments are current. We are going to talk to a non-profit credit counselor to find out which option to go with. We just keep getting deeper and deeper in debt.

BK should be the last resort. You should first check with an organization like Consumer Credit Counseling. They can help you to lower the interest rates and payments and consolidate all of your CC debt into one smaller payment.

Well, we filed about 8 months ago. For the most part, this has made things a lot easier for us. (we never in a million years EVER wanted to file BR, but that is another story) There are a few things to consider first. Like are you settled in your own home, and does your husband have a good job that he plans to stay with for awhile. See, the thing is that right after we filed, we sold our house, and my husband changed jobs. The delema is that if we want to buy a new home, we have no job history, and he hasn't been at this job very long. But if you have no plans on moving, and all that. You can still get loans and such. WARNING!!! after you file, you will have cc company's coming at you left and right trying to get you back into debt. You might try a credit counseling, What this is all about is.... you contact one of the company's (you can find many on line) they will "ask" your cc company's to lower your interest rates, and minimum payments. say you are currently paying 400 dollars a month in cc bills, this could drop to $200 or less. You will pay directly to the councilor, and they will pay the company's for you. but this will still cause your credit score to drop. The credit counselor will tell you that you can stop making your payments as soon as you get off the phone with them, but if your bills aren't behind, I suggest that you try to make the payment till they start making them for you. This will help your credit score. The problem is they want the $200 up front, and don't pay the creditors for 30days. If you don't go ahead and pay them for that 30days, they may turn you over to collections. well, I hope this helps, and I hope I didn't confuse you. Its hard to gather my thoughts when my 2 year old is babbling at me :). If you wanna ask me anything, just pm me.

I have really bad credit because of a divorce. Excellent credit til the ex ruined it. I owe about $6000 and it continues to grow but I can't pay it. And still with this terrible credit I have been getting credit card offers in the mail almost daily.

I have a friend who defaulted on loan payments on her trailer. She was recently approved for a $200,000 house. Not sure how she's getting past this one.

Good luck!

Check out www.bankruptcyforum.com - there is a lot of good information there.

It should be a last resort. I did Credit Card counseling for a year and a half first, but my measly income + huge cost of living around DC + student loans meant I would have (literally- no joke) $7 a pay period for food AND gas. Not happening. I talked with a great lawyer, who helped me weigh my options.

It's stressful and should only be the absolute last resort.

Good luck with whatever you decide!

I agree that bankruptcy should be a last resort. Using Consumer Credit services can also negatively impact your credit rating. You may very well need their services but try and negotiate lower rates/payments on your own first. Figure out how much you CAN afford to pay. Call the credit card company, explain you are facing bankruptcy (no details necessary - they hear sob stories day in and day out and don't need another one). It is in their best interest to work with you since bankruptcy may very well mean that they never see a penny of what you owe. Tell them how much you can pay (.50 on the dollar, etc.). Tell them how much interest you can afford.

I don't have any personal experience but my sister filed a few years ago. The thing is, if you are meeting your financial obligations (even if just barely) but just not getting ahead then there is a good chance you really don't need to file. From talking with my sister it is as stressful as the debt itself and the repercussions are big especially if you have a major purchase coming up (home/car).

The credit card applications come in after you've filed because these companies now know that you are clear and free. Someone who has recently been released from their debts but hasn't changed their spending habits are their best customers. But the interest rates are KILLER. The same is true for purchasing a home. As an example, my sister and I bought homes at about the same time (soon after her bankruptcy). Our house was about $75000 more than the one she bought and she put a much bigger percentage down. Still her note is a little more than twice ours - and that was with a family friend in the banking industry pulling strings to lower her interest rate.

Remember too, that filing bankruptcy can make it difficult to find a better job. Many companies run credit checks now so, if you may be looking into working full time when your children are older that is something else to consider (depending on the age of your children your bankruptcy may still be on your report when you start applying for jobs).

Yes, that is a good point Lucky. Bankruptcy can make it difficult to find a better job. It would be in your best interest to call your debtors, and negotiate with them. Stand your ground, you be surprised to see how willing they are to work with you.

We did ours about 3 years ago or so. It was VERY worth it! There was NO way we were going to get out of that much debt by ourselves. We too (at the time) were both just working at min. wage jobs and just not getting ahead.

However, the laws have changed now so you need to check into that. I think they won't let you "wipe it all off" like they used too, but it may help. I would schedule a consultation with a bankruptcy lawyer. (ask around and ask the lawyer before you go if he/she gives free consultations) and then just write down all your questions you have.

Good Luck!

*Flady*

I do agree that it should be the last resort, but be careful with those credit care companies. Ask them lots of questions and try to get one that is non profit if you can.

Also another thing if you haven't tried it already is calling the companies you owe. I know it's probably the LAST thing you want to do, but a lot of times companies have programs to help people. It's something to try before getting with a credit counseling service or bankruptcy.

Another thing to try is selling things you no longer need. May sound simple, but it can bring in some extra cash to help you with the bills. Also another idea is to get rid of any unnecessary bills. Like cable, etc. I know I love my cable too. But we went without our cable, internet, and even a phone so we could try to pay bills at one time. (before bankruptcy).

I know its not easy and I understand how you feel overwhelmed and like you will never get ahead, etc. But you will. Somehow, someway, you will. Just keep telling yourself that.

*Flady*

I don't think the law lets you wipe it all out anymore. And I think some sort of consumer credit counseling is now required as part of bankruptcy. Has anyone filed after October, 2005, under the new laws?

I'm going to be filing next week, and they do let you file Chapt. 7 (the one that "wipes out" all your unsecured debt). There are more restrictions, more income requirements, but that is still an option if you qualify.

The credit counseling is not like the debt management programs you see on TV. They are classes (you can even take them online) that you have to take about debt and credit. They run about $50 or so.

Good luck whatever your decision!!!