Filing for bankruptcy

[Stangfriik]

Well I'm starting to really think about this option. We're almost 20k in debt and we only make a combined income of about 55k a year. I don't see either of us getting some high paying job anytime soon so I don't know where to go from here. Debt consolidation won't do anything but lower our monthly payments but we'll still be paying more in the end. We can make the monthly payments fine but I don't see us getting any closer to being out of debt. Has anyone done this? Any advise is helpful. Please hold the "you should have managed your money right: stuff. I'm stricly looking for advise.

 

[big_bad_buff]

do not file bankruptcy. anything else, make your wife stand on the street corner if it will keep you from this, beg family and or friends for money. this will screw your life up in a very big way

 

[DcupSheepNipples]

20k that's it! You must be joking! I don't know how I could help someone trying to file for bankruptcy with only 20k in debts!

 

[fogg88]

As a flip-side to triple-B's reply...

once you've had a chapter 7 discharge, you can't file another for like 7 more years... therefore, you are even more attractive to lenders, since you don't have a way out of your liability to them. Bear in mind though that you will be paying very high interest rates for quite some time on any consumer credit. Also... most employers now routinely pull a credit report when looking at prospective hires, so if you work in any kind of finacial field, this could hurt you.

 

[2Thick]

You should take out a 2nd mortgage on your house.

If you do not own a house, then find a studio apartment where you pay next to nothing in rent, then only buy food in bulk and eat lots of cheap food. Cut everything you do not need in your life. After a year or two, you should be out of debt.

 

[DcupSheepNipples]

You should take out a 2nd mortgage on your house.

If you do not own a house, then find a studio apartment where you pay next to nothing in rent, then only buy food in bulk and eat lots of cheap food. Cut everything you do not need in your life. After a year or two, you should be out of debt.

Bare bone it for a few but In my opinion you would be crazy to file with just the 20k in debt!

 

[ajtomasi]

If you can make the payments just find, then enrol in a debt program that reduces your payments and interest and just make your normal "large" payments and you'll be out in five years.

 

[big_bad_buff]

True, but my parents filed B, they couldnt get a creadit card for 4 1/2 years, and nothing under 20%

As a flip-side to triple-B's reply...

once you've had a chapter 7 discharge, you can't file another for like 7 more years... therefore, you are even more attractive to lenders, since you don't have a way out of your liability to them. Bear in mind though that you will be paying very high interest rates for quite some time on any consumer credit. Also... most employers now routinely pull a credit report when looking at prospective hires, so if you work in any kind of finacial field, this could hurt you.

 

[plornive]

If you can move out of the US and join the underground economy, filing for bankruptcy will be a good idea.

 

[plornive]

20k?

that's like buying a 25k car and making monthly payments on it. What difference does it make? Just keep making payments.

unless u already got a car payment.

-= nav =-

Yeah it's not much at all.

 

[[email protected]]

First off. You are CONSIDERING filing for bankruptcy. So, legally you have not decided this yet. If you were to take out more unsecured loans and then go bankrupt later it would not be illegal. 20K is usually not enough to consider bankruptcy. I would try to pay some of it off and get some loans that will cover you at a 2% introductory rate or something. Even if you bang it up to 40K the option to go bankrupt is still there. Read between the lines.

It’s not true that you cannot go bankrupt again for 7 years. It’s actually every 6 months, but there is a little trick to doing this. Lenders may contest if you keep slamming them every 6 months.

It will stay on your credit report for 10 years. You can get a mortgage with a normal rate after 3 years. You can get credit cards the day after your bankruptcy is discharged if you know how. Not some BS card, I mean a normal card with a 5K+ limit.

Don’t say NO people. I’ve done it already.

Do not pay any collections accounts. Even if you pay them the collections statement will still be on your credit report. May as well be an R9 charge off because you will be screwed just the same. Let them charge it off and pay them nothing. You will get a 1099 statement at the end of the year if your interest and principal did not equal the amount of the original loan.

If they are breaking your balls, send them a cease and desist letter. This only works with collection agencies. Not the original lender.

Corporations do this kind of crap all the time. People don’t usually do it because they get scared when a collections agent calls them or they get nasty mail.

 

[KAYNE]

20k?

that's like buying a 25k car and making monthly payments on it. What difference does it make? Just keep making payments.

unless u already got a car payment.

-= nav =-

NOT EXACTLY ACCURATE SUPERNAV.......CAR LOANS ARE USUALLY SIMPLE INTEREST LOANS WHICH MEANS YOU HAVE TO PAY BACK A SET AMOUNT WHETHER YOU PAY IT OFF IN 2 MONTHS OR 5 YEARS.

HIS DEBT IS PROBABLY CREDIT CARD PURCHASES AND SHIT LIKE THAT. IN WHICH CASE ALL THESE LOANS ARE COMPOUNDED (PROBABLY CONTINIOUSLY). INTEREST IS ADDED TO THE PRINCIPAL AFTER EACH COMPOUNDING PERIOD. $20K ON A CONTIOUSLY COMPOUNDED CARD AT A HIGH RATE WILL TAKE YOU YOUR LIFE TO PAY BACK IF YOU ARE MAKING MINIMUM, OR NEAR MINIMUM PAYMENTS.





KAYNE

 

[Imnotdutch]

I agree with 2Thick. 20K is not that much........you can definitely work your way out of this. You just need to cut your living costs to a minimum for a couple of years.

You should take out a 2nd mortgage on your house.

If you do not own a house, then find a studio apartment where you pay next to nothing in rent, then only buy food in bulk and eat lots of cheap food. Cut everything you do not need in your life. After a year or two, you should be out of debt.

 

[Stangfriik]

Thanks for all the advise. I'm just weighing my options right. The 20k didn't include my car. That would probably be another 8k plus the house if you count that. Unfortunately at the time we tried to get a home equity loan, we had only been living in our house for 4 or 5 months. They told us we didn't have enough equity yet. Is a 2nd mortgage different? We have now lived here for 7 months which I don't think is long enough. I'm so clueless on this stuff which is why I'm trying to find every option available. We are making the payments but we have to pay the minimum amount on each of them. Mortgage doesn't get paid until the 14th of every month b/c we never have enough money left over at the beginning of the month. All cards are maxed right now b/c when we really didn't have any money at one point forced us to use the cards for necessities. I've tried applying for other credit cards with lower interest rates so I can transfer the balances but we both keep being denied. I just don't know what to do. Luckily we have a home warranty so if anything major breaks, we won't have to pay that much. But it expires in August and we don't have the $360 to renew. We haven't even been able to pay the Home Hwners Association fee for this year b/c we never have that kind of money left over. Unfortunately we're not prepared to deal with a major hit like a broken down car, house probs, etc.

 

[TroyRoccoco]

Stangfriik - my advise is that you put away a little one everymonth. E.g. $20 or $30 in an intrest savings acount e.g. straight from your pay-check into a credit-union or something. That way you never see the mony so you dont miss it. Every month just throw away your bank statment withough looking at it and you never now you got that cash to spend.

Then one day youll will look at your bank-statement and will see that your reglar savins have built into a nice little nest egg which youse can use to pay off your debts.

If you do considr bankruptcy my advice is that you contact a financial adviser first.

 

[fogg88]

It’s not true that you cannot go bankrupt again for 7 years. It’s actually every 6 months, but there is a little trick to doing this. Lenders may contest if you keep slamming them every 6 months.

please elaborate on this...

 

[[email protected]]

CAR LOANS ARE USUALLY SIMPLE INTEREST LOANS WHICH MEANS YOU HAVE TO PAY BACK A SET AMOUNT WHETHER YOU PAY IT OFF IN 2 MONTHS OR 5 YEARS

Absolutely not. There was a lawsuit against GM over 10 years ago for that exact thing. They can only charge you interest for the time you actually owe them money.

Also, in the loan agreement you usually use the car title as collateral. Unless it was an explicit personal loan. Then the car can be considered an asset when you file for bankruptcy.

 

[[email protected]]

Every time you apply for credit your FICO score takes a hit. In my opinion on credit cards, since you have already been denied, you will not get one with any significant limits.

You can get a 125% equity loan. If you have NO equity you can still get one. But your FICO needs to be over 720 in most cases.

You can keep your house if you file for bankruptcy as long as you don’t list the loan. The same with the car as long as you owe a good amount on it. Besides, you don’t actually own the car because you prob don’t have the title.

 

[[email protected]]

please elaborate on this...

Spoke to a lawyer about this a while back. He said it could be done. It’s within the law. But when lenders see you milking the system they usually start contesting the claim of bankruptcy and try to get the judge to deny the discharge.

It can be done. But the amount of credit that someone with a recent discharge is usually not that much because of the impact to credit the bankruptcy has.

YOU CAN actually purchase your loans that are defaulted from creditors. Example:

You owe “Crappy Credit” $5,000 and you defaulted on the loan. Collections could not get money out of you. So, you make an offer to the creditor for 50c cents on the dollar for the loan through an attorney. They sell you the loan and all the reporting rights. You then update your own credit reports because the loan is legally yours. PAID AS AGREED!

 

[[email protected]]

Am I killing you guys yet with this info

 

[fogg88]

Spoke to a lawyer about this a while back. He said it could be done. It’s within the law. But when lenders see you milking the system they usually start contesting the claim of bankruptcy and try to get the judge to deny the discharge.

It can be done. But the amount of credit that someone with a recent discharge is usually not that much because of the impact to credit the bankruptcy has.

YOU CAN actually purchase your loans that are defaulted from creditors. Example:

You owe “Crappy Credit” $5,000 and you defaulted on the loan. Collections could not get money out of you. So, you make an offer to the creditor for 50c cents on the dollar for the loan through an attorney. They sell you the loan and all the reporting rights. You then update your own credit reports because the loan is legally yours. PAID AS AGREED!

interesting stuff!

 

[[email protected]]

I loathe credit agencies, lawyers, corporations, collections agents, real estate agents, police departments, and many others. I try to learn their game.

 

[KAYNE]

I loathe credit agencies, lawyers, corporations, collections agents, real estate agents, police departments, and many others. I try to learn their game.

WELL, THATS ABOUT EVERYONE LARRY.

 

[nice6pac]

so basically you cna get into a ton of debt that you can't payoff and declare bankruptcy adn your scot free sure its on your record,but if you still ahve the house what od u need ?

 

[KAYNE]

Absolutely not. There was a lawsuit against GM over 10 years ago for that exact thing. They can only charge you interest for the time you actually owe them money.

YOU SHOULD LOOK UP THE DIFFERENCE BETWEEN A SIMPLE INTEREST LOAN AND A COMPOUNDED INTEREST LOAN.

 

[slobberknocker]

My dad has been a bankruptcy attorney for about 18 years. I'm working with him part time over the summer, until school starts again. I know plenty about this.

Bankruptcy is not the end of the world. It's a smart thing to do, if you have lots of old debts laying around.

As for your credit report, yes it stays on there for 10 years, but in reality it only affects you for about 2 years. Most people can get a car loan within a year or two, and you'll start seeing credit card offers almost immediately after your debts are discharged. In fact, most places would rather see that you've filed a bankruptcy, instead of having large amounts of outstanding debt.

Most attornies charge 1200 or so for your typical Chapter 7. Chapter 13's are a little more, because they take longer.

If anyone has any specific questions, ask me or pm me. I'll help as much as I can.

 

[KAYNE]

so basically you cna get into a ton of debt that you can't payoff and declare bankruptcy adn your scot free sure its on your record,but if you still ahve the house what od u need ?

THAT DEPENDS........YOU CAN FILE DIFFERENT CHAPTERS OF BANKRUPTCY. IF YOU DO A LIQUIDATION (WHICH I THINK IS MAINLY FOR BUSINESSES) YOU DONT KEEP MUCH AT ALL. IF YOU DO A REORGANIZATION, I'M PRETTY SURE YOU SETTLE YOUR DEBTS FOR A CERTAIN PERCENTAGE.

I SLEPT QUITE OFTEN IN BUSINESS LAW SO I COULD BE WAY OFF. SLOBBERKNOCKER SEEMS TO KNOW WHAT HE IS TALKING ABOUT SINCE HIS DAD IS A BANKRUPTCY LAWYER.




KAYNE

 

[HULKSTER]

THAT DEPENDS........YOU CAN FILE DIFFERENT CHAPTERS OF BANKRUPTCY. IF YOU DO A LIQUIDATION (WHICH I THINK IS MAINLY FOR BUSINESSES) YOU DONT KEEP MUCH AT ALL. IF YOU DO A REORGANIZATION, I'M PRETTY SURE YOU SETTLE YOUR DEBTS FOR A CERTAIN PERCENTAGE.

I SLEPT QUITE OFTEN IN BUSINESS LAW SO I COULD BE WAY OFF. SLOBBERKNOCKER SEEMS TO KNOW WHAT HE IS TALKING ABOUT SINCE HIS DAD IS A BANKRUPTCY LAWYER.




KAYNE

Or you can just shove as many Benjamins up your ass as possible and smuggle them into the Caymans!!

 

[KAYNE]

Or you can just shove as many Benjamins up your ass as possible and smuggle them into the Caymans!!

THAT APPLIES ANYTIME YOU WANT TO KEEP ALL YOUR MONEY INSTEAD OF PAYING TAXES OR GETTING IT SEIZED OR FROZEN.

 

[anabolicmd]

Or you can just shove as many Benjamins up your ass as possible

Or in your case a whole motorhome!

 

[manny78]

20k and you're thinking about bankruptcy ? Bro, you must be joking right ? With your annual income I wouldn't even touch this unless you reach 50k$ or more...

Pimpin' your wife might be a solution...

 

[Stangfriik]

Does anyone have any better options? We can only make the minimum payments on our bills. Once those are paid, we'll have $100-$200 in the bank at the end of the month. We have to wait for my fiances check on the 10th so we can make our mortgage payment. We did take out something called an equity plus loan which is something like a home equity loan but they only approved us for 6k. They wouldn't just give us the money to distribute amongst the bills ourselves. We had to pick 2 or 3. So we picked the two bills that are the most per month. That paid off her car and the engagement ring. That helped us a little but I don't see our financial situation getting any better unless one of us starts making a lot of money soon and I just don't see that happening. I guess my fiance is already walking the strip so to speak. She's about to get back into the Hawaiian Tropic contests so hopefully we can get some extra cash that way. Plus everything she buys to compete is tax deductible which is cool. She also wants to start doing the baby making thing before she's 28 and she turns 25 this year. I told her that I am not having a kid before we get out of this whole we have dug for ourselves. I just don't know what to do

 

[manny78]

Does anyone have any better options? We can only make the minimum payments on our bills. Once those are paid, we'll have $100-$200 in the bank at the end of the month. We have to wait for my fiances check on the 10th so we can make our mortgage payment. We did take out something called an equity plus loan which is something like a home equity loan but they only approved us for 6k. They wouldn't just give us the money to distribute amongst the bills ourselves. We had to pick 2 or 3. So we picked the two bills that are the most per month. That paid off her car and the engagement ring. That helped us a little but I don't see our financial situation getting any better unless one of us starts making a lot of money soon and I just don't see that happening. I guess my fiance is already walking the strip so to speak. She's about to get back into the Hawaiian Tropic contests so hopefully we can get some extra cash that way. Plus everything she buys to compete is tax deductible which is cool. She also wants to start doing the baby making thing before she's 28 and she turns 25 this year. I told her that I am not having a kid before we get out of this whole we have dug for ourselves. I just don't know what to do

Did you think about getting a second job ? or work more hours ?

 

[[email protected]]

Break it down to secured loans (house, car) to unsecured loans (credit cards).

Depending on how much each unsecured loan is they will probably write the loss off as a charge off. If they are each under 5K that would most likely be the case. I had an 11K default and then later bought the loan for 5K. Even with the 11K debt they still just sent it to collections and about 6 months later wrote it off. Things happen that you can’t foresee.

Secured loans and they come and take their stuff back. If your credit is all screwed up anyway what are you protecting by beating your head against the wall trying to pay back unsecured debt. If you have late payments all over your report the damage is already done. Let them chase you for a while and eventually they will let it go. When they sell the debt to a collections agency just send them the cease and desist.

Even if they sue you and you’re a “no show” they win the judgment by default. It’s not common that they will sue for a small amount. Even if they do and get a judgment they still have to collect the money. That in itself is MORE resources and money they have to invest and possibly get nothing in return.

----
Kayne: I’ve heard of that kind of a loan but I never really heard of anyone taking it. Well, at least I never had something like that offered to me. It seems like a very restrictive type of a loan that no one would want.

 

[KAYNE]

Kayne: I’ve heard of that kind of a loan but I never really heard of anyone taking it. Well, at least I never had something like that offered to me. It seems like a very restrictive type of a loan that no one would want.

THEIR ARE 2 TYPES OF LOANS (WHEN SPEAKING OF INTEREST). ONE IS THE SIMPLE INTEREST LOAN. TAKE FOR INSTANCE, YOU BORROW $10K FOR 4 YEARS AT 8% FINANCING. THE SIMPLE INTEREST ON THE LOAN WOULD BE PRINCIPAL*RATE*TIME. THUS, 10K(4)(.08)=$3200. $3200+$10K=$13200 FOR THE AMOUNT YOU HAVE TO PAY BACK. IT DOESNT MATTER IF YOU PAY IT BACK IN ONE YEAR OR 4 YEARS.

THE OTHER TYPE OF LOAN IS A COMPOUNDED INTEREST LOAN. THE SIMPLE INTEREST LOAN IS ARITHMATIC AND DOENST INCORPERATE THE TIME (COMPOUNDING) COMPONENT. THE COMPOUND LOAN IS GEOMETRIC, INCORPERATING THE TIME COMPONENT. INTEREST IS ADDED TO THE PRINCIPAL EACH COMPOUNDING PERIOD. YOU THEN HAVE TO PAY INTEREST ON THE PRINCIPAL PLUS THE ADDED INTEREST. THAT IS A RECURRING PROCESS FOR EACH COMPOUNDED PERIOD.

COMPOUNDED LOANS CAN BE COMPOUNDED SEMI-ANNUALLY, QUATERLY, MONTHLY, DAILY, AND CONTINOUSLY. CREDIT CARDS ARE CONTINOUSLY COMPOUNDED LOANS WHICH IS WHY YOU NVR PAY THEM OFF IF YOU ARE PAYING THE MINIMUM. THE MINIMUM DOESNT DO ANYTHING BUT COVER THE PREVIOUS PERIODS FINANCE CHARGES PLUS A MINUTE AMOUNT OF THE PRINCIPAL.

THIS REALLY HAS NOTHING TO DO WITH SECURED AND UNSECURED LOANS. ITS ALL ABOUT THE INTEREST.

 

[[email protected]]

So I guess you can actually sell a simple loan because you have a guaranteed payback amount and a time period. Then the lender would use that money to give another loan and do the same thing. He gives a loan at 8% of X and sells it to a third party for 5%. He profits 3% and rolls the principal back into another loan.

Does this sound feasible?

 

[KAYNE]

YES, BUT COMPOUNDED LOANS HAVE A SECONDARY MARKET AS WELL. NOT JUST SIMPLE LOANS.