Another Legal Consultation
peaceful seabird
Thread Starter
Join Date: Sep 2008
Location: floating
Posts: 4,822
Another Legal Consultation
I have scheduled a legal consultation later this week.
I am looking into the option of filing bankruptcy.
The short list why:
My divorce was final one year ago.
We had a marital home, not in my name. My inheritance was the downpayment on that home. (legal documentation to prove this fact).
The divorce granted me repayment from AX for the downpayment. With a clause that I would receive a lump sum from the sale of the home which would reduce or end AX's repayment plan.
I was also granted repayment for debts on Credit Cards (my name) that AX incurred during active alcoholism.
My fantasy was that the house would sell and I would be able to knock out a large part of the massive debt in my name. I would be able to continue payments with the money I receive from AX for CC debt, plus add funds and get that taken care of within the time the courts gave AX to payback.
Now my reality is this:
I have been working my job for a year. No raise.
Rent went up and my cost of health insurance went up.
My son turned 18 last month and his dad(ex #1) is no longer obligated for child support. (still paying, temporarily, to help with cost of son's car insurance)
XA lost the house in foreclosure last year. Therefore, no lump sum repayment.
I am making ends meet and paying my debts on time. But I live paycheck to paycheck. I am one paycheck away from not being able to pay anything. I am reliant on my XA to make his payments on time. This makes me uncomfortable.
I am worried because I am only making minimum payments on this enormous debt. When the repayment schedule ends, I will still have a huge debt. The only way I was going to get ahead was with a lump sum from the sale of the house (or a lottery win).
Now I am considering bankruptcy.
If the CC debt is eliminated, I will be able to put money into savings.
How will this effect me when I move with my job (hopefully within 2 years)?
How hard is it to rent or turn on utilities with bankruptcy on your history?
I don't have relatives to co-sign anything. I am it.
I am looking into the option of filing bankruptcy.
The short list why:
My divorce was final one year ago.
We had a marital home, not in my name. My inheritance was the downpayment on that home. (legal documentation to prove this fact).
The divorce granted me repayment from AX for the downpayment. With a clause that I would receive a lump sum from the sale of the home which would reduce or end AX's repayment plan.
I was also granted repayment for debts on Credit Cards (my name) that AX incurred during active alcoholism.
My fantasy was that the house would sell and I would be able to knock out a large part of the massive debt in my name. I would be able to continue payments with the money I receive from AX for CC debt, plus add funds and get that taken care of within the time the courts gave AX to payback.
Now my reality is this:
I have been working my job for a year. No raise.
Rent went up and my cost of health insurance went up.
My son turned 18 last month and his dad(ex #1) is no longer obligated for child support. (still paying, temporarily, to help with cost of son's car insurance)
XA lost the house in foreclosure last year. Therefore, no lump sum repayment.
I am making ends meet and paying my debts on time. But I live paycheck to paycheck. I am one paycheck away from not being able to pay anything. I am reliant on my XA to make his payments on time. This makes me uncomfortable.
I am worried because I am only making minimum payments on this enormous debt. When the repayment schedule ends, I will still have a huge debt. The only way I was going to get ahead was with a lump sum from the sale of the house (or a lottery win).
Now I am considering bankruptcy.
If the CC debt is eliminated, I will be able to put money into savings.
How will this effect me when I move with my job (hopefully within 2 years)?
How hard is it to rent or turn on utilities with bankruptcy on your history?
I don't have relatives to co-sign anything. I am it.
Member
Join Date: Jan 2006
Location: behind the viewfinder...
Posts: 6,278
I cannot tell you if bankruptcy is best for your situation. I can only share what I learned when I filed for bankruptcy 13 years ago (while still married to my A). I wish I had not filed for ALL my debts to be absolved. I wish I would have reassumed some of them. Instead, everything was written off, and I had to start all over from scratch to build my credit. I learned later that I could have picked some debt to keep paying on, thereby building my credit back up. As it was, it was a big struggle even getting anyone to loan me money to prove that I was worthy.
Just my experience....
L
Just my experience....
L
Member
Join Date: Mar 2009
Location: Midwest
Posts: 545
Wow you are in a tough spot. I once had a very good friend tell me that the world is about options... not money.... money is only a means in which to obtain more options.
As a rule of thumb... I always try seek the road with the most options. Only you can determine if you can live with the consequence of bankruptcy... what are your long term options if you do or don't. Which ever way gives you the best options long term... may be the route to consider.
I would strongly advise you to seek financial advice.... many times you can get it for free... have you tried to settle for pennies on the dollar with your credit card companies... negotiate a lower interest rate?
You have options.
Take care.
As a rule of thumb... I always try seek the road with the most options. Only you can determine if you can live with the consequence of bankruptcy... what are your long term options if you do or don't. Which ever way gives you the best options long term... may be the route to consider.
I would strongly advise you to seek financial advice.... many times you can get it for free... have you tried to settle for pennies on the dollar with your credit card companies... negotiate a lower interest rate?
You have options.
Take care.
I'm no angel!
Join Date: May 2005
Location: tampa, fl
Posts: 6,728
No right or wrong answer to this one.
My company will not rent to anyone who has filed bankruptcy in the last 2 years.
We will not hire anyone who has filed bankruptcy in the last seven years, the company feels that if one cannot manage their money how can they manage ours. Not my rule, as many people who work at our company ride around on lawn mowers, so they have no access to money.
If you file Chapter 13, reorganization, you agree to pay off a certain percentage of your debt, the balance is written off.
If you file Chapter 7, you generally keep 1 car, 1 home. Chapter 7 is a liquidation of your assests, the assests are secured or sold and what is left after that is written off.
Now the bankruptcy stays on your credit record for 7 years, every company has their own rules as to when and if they will give the debtor credit again.
Have you called your credit card companies and asked for a lower rate or a balance reduction? Some would rather get a lesser amount rather than have to bite the bullet for the entire balance.
I agree with Hammer, explore all your options.
My company will not rent to anyone who has filed bankruptcy in the last 2 years.
We will not hire anyone who has filed bankruptcy in the last seven years, the company feels that if one cannot manage their money how can they manage ours. Not my rule, as many people who work at our company ride around on lawn mowers, so they have no access to money.
If you file Chapter 13, reorganization, you agree to pay off a certain percentage of your debt, the balance is written off.
If you file Chapter 7, you generally keep 1 car, 1 home. Chapter 7 is a liquidation of your assests, the assests are secured or sold and what is left after that is written off.
Now the bankruptcy stays on your credit record for 7 years, every company has their own rules as to when and if they will give the debtor credit again.
Have you called your credit card companies and asked for a lower rate or a balance reduction? Some would rather get a lesser amount rather than have to bite the bullet for the entire balance.
I agree with Hammer, explore all your options.
Member
Join Date: Sep 2009
Location: Quebec
Posts: 2,708
How about a consummer proposal? Is that open to you?
Have you thought of checking out CreditBoards (Powered by Invision Power Board) to ask some advice?
I figured out how to ask for a Pay for Deletion for one of my outstanding debts with a collection agency. I also negotiated the amount down from 1700% to 850$ cash. It's worth a shot to try for some of the smaller debts you might have.
Be careful who you consult for financial advice. I made the mistake of asking a bankruptcy trustee what to do, and of course, she told me to go ahead and file. I had to have my mother cosign on a lease one year, but aside from that, I haven't had any issues regarding jobs or utilities. Most utilities companies here require a cash deposit anyhow to guarantee some kind of security. I still have 3 more years to go before the bankruptcy is removed from my credit report....
Have you thought of checking out CreditBoards (Powered by Invision Power Board) to ask some advice?
I figured out how to ask for a Pay for Deletion for one of my outstanding debts with a collection agency. I also negotiated the amount down from 1700% to 850$ cash. It's worth a shot to try for some of the smaller debts you might have.
Be careful who you consult for financial advice. I made the mistake of asking a bankruptcy trustee what to do, and of course, she told me to go ahead and file. I had to have my mother cosign on a lease one year, but aside from that, I haven't had any issues regarding jobs or utilities. Most utilities companies here require a cash deposit anyhow to guarantee some kind of security. I still have 3 more years to go before the bankruptcy is removed from my credit report....
Occasional poor taste poster
Join Date: Jul 2005
Posts: 2,542
I can only tell you what I know form my first exW's experiences, she filed BR shortly after we were divorced in 95 and a year after that was able to get a loan for a car and secured credit cards at crazy high interest rates. But some how she was able to rebuild her credit enough to actually get a loan for a home!!! This was all before seven years and before they changed the BR laws.
Over the years she did not change her spending habits and last year ended up filing for BR again after having a condo foreclosed. Now the laws are different she was not forgiven the debt but had to restructure the debt. She has some sort of trustee of the court assigned to her (representing her creditors best interests) that has full disclosure on all her financial dealings. This trustee worked with her to determine the max monthly payments she could afford. Plus there's some kind of ongoing oversight where she got dinged for having too much of a fed return and the creditors took it. She had to change her deductions so she nets a zero return or she looses that money. This is all happening in VA so I don't know if it would be different for your state?
Good luck Pelican. I have a sizable "stupid tax" I'm paying on, hate to see anyone get stuck with that. Curious to hear how it goes with the legal consultation.
When S filed BR years ago I had to assume her CC debt that was in both our names. I called all my creditors and asked for help and a couple worked with me reducing payments and one even stopped interest and let me pay only on the balance! Probably don't see that much anymore but it's worth a try. Have tou looked into Consumer Credit Counseling Service? S and I used them back in the late 80s with a great outcome. Consumer Credit Counseling Services Got out from being under water with only one ding on our credit.
Over the years she did not change her spending habits and last year ended up filing for BR again after having a condo foreclosed. Now the laws are different she was not forgiven the debt but had to restructure the debt. She has some sort of trustee of the court assigned to her (representing her creditors best interests) that has full disclosure on all her financial dealings. This trustee worked with her to determine the max monthly payments she could afford. Plus there's some kind of ongoing oversight where she got dinged for having too much of a fed return and the creditors took it. She had to change her deductions so she nets a zero return or she looses that money. This is all happening in VA so I don't know if it would be different for your state?
Good luck Pelican. I have a sizable "stupid tax" I'm paying on, hate to see anyone get stuck with that. Curious to hear how it goes with the legal consultation.
When S filed BR years ago I had to assume her CC debt that was in both our names. I called all my creditors and asked for help and a couple worked with me reducing payments and one even stopped interest and let me pay only on the balance! Probably don't see that much anymore but it's worth a try. Have tou looked into Consumer Credit Counseling Service? S and I used them back in the late 80s with a great outcome. Consumer Credit Counseling Services Got out from being under water with only one ding on our credit.
Member
Join Date: Jul 2009
Location: PA
Posts: 985
I would recommend a consultation with a financial advisor to find out how it will affect things.
I hear from others that renting is very dependent upon your credit rating these days and your income. Utilities can be worse but might be related only to not paying utility bills.
Long ago when I considered bankruptcy - a consultation revealed that some of my debts were exempt from b. and the things it would have affected in the future were not worth it for me.
I know some who it ruined and others who have managed to rent and rebuild credit. Of corse, things are much different these days so it is will require research on your part.
Will keep you in prayers.
I hear from others that renting is very dependent upon your credit rating these days and your income. Utilities can be worse but might be related only to not paying utility bills.
Long ago when I considered bankruptcy - a consultation revealed that some of my debts were exempt from b. and the things it would have affected in the future were not worth it for me.
I know some who it ruined and others who have managed to rent and rebuild credit. Of corse, things are much different these days so it is will require research on your part.
Will keep you in prayers.
To thine own self be true.
Join Date: May 2009
Location: U.S.A.
Posts: 5,924
Pelican, I have no expertise in financial matters so I do not have any practical feedback but I do want to say that I am sorry you are going through this and I hope things work out for you soon. :ghug3
Member
Join Date: Sep 2007
Location: Atlanta
Posts: 31,179
(((Pelican))) - I can't tell you about bankrupcty, but I can tell you that, here in Atlanta, you can't even RENT an apt. without a good credit score, and even though you aren't looking for another job, many employers also do a "background check" which includes a credit report. Mine is not so hot, been trying to build it back up, but it's tough.
My dad just filed bankruptcy..whichever one where he pays the debts back, but no interest? He was allowed to keep his house and he had already paid his vehicles off, but he no longer HAS any credit cards. It was a tough decision to make, but he had no other options. He's self employed, went through a bankruptcy lawyer/court and the repayment bankruptcy was decided to be best for him.
Hugs and prayers!
Amy
My dad just filed bankruptcy..whichever one where he pays the debts back, but no interest? He was allowed to keep his house and he had already paid his vehicles off, but he no longer HAS any credit cards. It was a tough decision to make, but he had no other options. He's self employed, went through a bankruptcy lawyer/court and the repayment bankruptcy was decided to be best for him.
Hugs and prayers!
Amy
Member
Join Date: Apr 2010
Location: Alaska
Posts: 2,913
Pelican, I'm sorry that you're going through this. As others posted I would suggest consulting, researching and researching. My AH and I declared bankruptcy several years ago; however, most of 'our' debt was in my name because I'd had a darn near perfect credit score before him and could get the loans and credit lines, while his credit history was less-than-desirable.
The first couple years after the bankruptcy were rough, but I've finally been able to work my credit score back up and prove my credit-worthiness, and it's getting easier. (Definitely helps that I've left AH and he is no longer on any of my accounts, and was never on the new credit card I keep for emergencies.) However, I'm not sure what today's financial climate is like and just how rough climbing back up will be if filing bankruptcy today.
Best of luck,
The first couple years after the bankruptcy were rough, but I've finally been able to work my credit score back up and prove my credit-worthiness, and it's getting easier. (Definitely helps that I've left AH and he is no longer on any of my accounts, and was never on the new credit card I keep for emergencies.) However, I'm not sure what today's financial climate is like and just how rough climbing back up will be if filing bankruptcy today.
Best of luck,
peaceful seabird
Thread Starter
Join Date: Sep 2008
Location: floating
Posts: 4,822
Thank you, my friends, for your ES&H!
Your caring, concern and tips have helped me mentally, spiritually and physically. I have been carrying this burden around and having anxious moments each time I sit down to pay my bills. After sharing my concerns here, I have been able to research, research and explore options. I feel a little lighter today (chest not as tight, too). I feel the love!
I've also realized that I am grieving, again! I am saying goodbye to years of hard work and good credit. However, I know I will be OK!
DollyDo spelled out the bankruptcy options clearly.
NoDay and Jazz offered excellent links for research into Credit Counseling Services.
All the personal experiences helped with putting real images in my brain as well as helping me remember - I am not alone.
My attorney visit was informative.
I arrived with my Credit Card statements and my divorce decree. I also had a list of my household expenses (rent, utilities, insurances).
The lawyer plugs all this information into forms to determine which program will be in my best interest. Since the reform of BankRuptcy laws in 2005, there are new restrictions for each Chapter of BR. The attorney also shared the information for a local Consumer Credit Counseling Service that some clients have found to be a better option. We discussed that option, as I had done my research before I arrived.
I believe it will be in my best interest to file Chapter 7 (liquidation) of the hefty unsecured CC debt. Here's why:
I do not own any real estate that I need to hold onto (Ch 13 & CCCS would help in that case)
My credit is going to take a hit (giant red flag) with all the options: Ch 13, 7 or CCCS. The credit hit will make me unattractive to lenders (car, home, credit card services) and property managers and utility companies and some employers (banking).
With Ch 13 & CCCS, my debts are consolidated, interest rates reduced where possible and monthly payments are established to payback the debt. However, based on my income - my repayment plan may still have me living paycheck to paycheck for a long while with little extra cash to cover the extra deposits I would need to make for utilities and rentals if we move. (I passed a house for rent on the way to the lawyers office. The house had a home made sign in the yard. I was reminded that I will be able to rent a house from an individual with 1st & last months rent paid in advance plus a security deposit)
The federal guidelines for Ch 7 BR are tight. There is a mean average income based on number in household and household income. Add in any other sources of income (Child support & alimony). My alimony is the repayment of the downpayment on the forclosed home and a seperate allotment for the repayment of the CC debt. The divorce was clearly stated in these areas. MyAX will be relieved of the CC repayment if I file BR. AX will still be responsible for child support and the downpayment repayment.
So, it looks like in preliminary figures, I qualify to meet federal guidelines for Ch 7 BR.
I will be required to complete a consumer credit course before the BR case is finalized.
I have also spoken with some people in the car and rental business.
Rental properties can be had even with a credit hit, but it narrows the field of choices considerably. In my current apt, I payed a fee for a credit check and was asked to show two credit cards. I happened to have my American Express (no balance -emergency only) and a credit card I never used (it was holding a huge balance). I showed the realtor these two cards. They never checked my credit.(I had to pull my credit report last year) There were no inquiries from my rental property. They approved me based on showing two credit cards and my job I guess.
My girlfriend revealed that she was able to purchase a home 3 years after filing Ch 7 BR with a higher rate of interest the first 2 years, then her interest dropped to 6%.
In the car business, they see a credit hit but will be able to finance you after 2 years from filing BR.
I asked if I could keep one or two of my credit cards and continue making payments. The lawyer said that is a nice request, but it would be met with my creditor closing my account as soon as my BR request hits my credit report.
I still need to take in 6 months of paycheck stubs and my 2009 tax return to get the final figures and options.
I have not committed to anything at this time.
Your caring, concern and tips have helped me mentally, spiritually and physically. I have been carrying this burden around and having anxious moments each time I sit down to pay my bills. After sharing my concerns here, I have been able to research, research and explore options. I feel a little lighter today (chest not as tight, too). I feel the love!
I've also realized that I am grieving, again! I am saying goodbye to years of hard work and good credit. However, I know I will be OK!
DollyDo spelled out the bankruptcy options clearly.
NoDay and Jazz offered excellent links for research into Credit Counseling Services.
All the personal experiences helped with putting real images in my brain as well as helping me remember - I am not alone.
My attorney visit was informative.
I arrived with my Credit Card statements and my divorce decree. I also had a list of my household expenses (rent, utilities, insurances).
The lawyer plugs all this information into forms to determine which program will be in my best interest. Since the reform of BankRuptcy laws in 2005, there are new restrictions for each Chapter of BR. The attorney also shared the information for a local Consumer Credit Counseling Service that some clients have found to be a better option. We discussed that option, as I had done my research before I arrived.
I believe it will be in my best interest to file Chapter 7 (liquidation) of the hefty unsecured CC debt. Here's why:
I do not own any real estate that I need to hold onto (Ch 13 & CCCS would help in that case)
My credit is going to take a hit (giant red flag) with all the options: Ch 13, 7 or CCCS. The credit hit will make me unattractive to lenders (car, home, credit card services) and property managers and utility companies and some employers (banking).
With Ch 13 & CCCS, my debts are consolidated, interest rates reduced where possible and monthly payments are established to payback the debt. However, based on my income - my repayment plan may still have me living paycheck to paycheck for a long while with little extra cash to cover the extra deposits I would need to make for utilities and rentals if we move. (I passed a house for rent on the way to the lawyers office. The house had a home made sign in the yard. I was reminded that I will be able to rent a house from an individual with 1st & last months rent paid in advance plus a security deposit)
The federal guidelines for Ch 7 BR are tight. There is a mean average income based on number in household and household income. Add in any other sources of income (Child support & alimony). My alimony is the repayment of the downpayment on the forclosed home and a seperate allotment for the repayment of the CC debt. The divorce was clearly stated in these areas. MyAX will be relieved of the CC repayment if I file BR. AX will still be responsible for child support and the downpayment repayment.
So, it looks like in preliminary figures, I qualify to meet federal guidelines for Ch 7 BR.
I will be required to complete a consumer credit course before the BR case is finalized.
I have also spoken with some people in the car and rental business.
Rental properties can be had even with a credit hit, but it narrows the field of choices considerably. In my current apt, I payed a fee for a credit check and was asked to show two credit cards. I happened to have my American Express (no balance -emergency only) and a credit card I never used (it was holding a huge balance). I showed the realtor these two cards. They never checked my credit.(I had to pull my credit report last year) There were no inquiries from my rental property. They approved me based on showing two credit cards and my job I guess.
My girlfriend revealed that she was able to purchase a home 3 years after filing Ch 7 BR with a higher rate of interest the first 2 years, then her interest dropped to 6%.
In the car business, they see a credit hit but will be able to finance you after 2 years from filing BR.
I asked if I could keep one or two of my credit cards and continue making payments. The lawyer said that is a nice request, but it would be met with my creditor closing my account as soon as my BR request hits my credit report.
I still need to take in 6 months of paycheck stubs and my 2009 tax return to get the final figures and options.
I have not committed to anything at this time.
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