May 12th, 2008 at 12:00am Under Bankruptcy Questions
Question:
I lost my job, partner and home all in one day in February and went into a breakdown which lasted several months, finishing with two suicide attempts in July, after which I sought help. The debts I ran up in this time, with people offering me substantial loans that I took up, and credit card bills from 5-star hotels and mad extravagant spending, total about
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January 3rd, 2008 at 12:00am Under Bankruptcy Questions
Question:
I have just discovered this website and have begun reading the posts here. I would like to hear others’ experiences in these situations. I have recently consulted with two different lawyers about possibly filing for bankruptcy. All of my debt is credit card debt. I got two views on these issues, so thought I’d take it here. First is the car issue. My car is a mid-priced 5 year old 1996 Olds that is paid for. One lawyer said it could be up for seizure by creditors because of it’s value, and because it is over 2000 bucks. The second attorney said as a general rule the trustees usually leave cars six years and older, alone. Regarding my job situation, ill health that has rapidly declined recently has caused me to take Disability. I do plan on taking any type of part-time job I can find to help make ends meet. My second question pertains to repairing credit damage. If somewhere in the future, I inherit some money and have some funds to “right” some debt, how would I!
go about doing so, and would paying back some of the debt do my credit rating any good? Would that effort make a “positive’ dent on my credit rating? The way I believe things are now, all of my credit card debt has changed hands from the original cc companies, onto collection agencies. These agencies now own my account, and not the cc company that issued the cards. They have already reported my delinquencies and damaged my credit rating already. If I do find some way to repay these new collectors who now own my debt, would these collectors report a “positive” note on my credit rating when I repay them? Or will repayment at that stage of the game be considered “too late” and the damage done? One attorney I consulted said “maybe” my credit would be improved just a tidbit, but the damage was already done for 7 years, 10 years if I proceed to bankruptcy. The other attorney didn’t think repaying these collectors would “right” any previous wrongs. Thanks for reading. All advice !
would be appreciated. I do know ultimately only I can make the!
best de
cision for my situation, with my attorney’s guidance. I’m just trying to do my best to deal with this nightmare I find myself in that I never imagined could happen “to me”.
Answer:
Assets seizable by creditors varies by state and judge. That may be why you got 2 different answers from your lawyers, it may depend on the judge. In most cases, if that car is your only means of transportation it should be safe. No amount of pay back will repair your credit report. Bad credit will remain there for 7 yrs (or 10yrs for bkrp). You are able to file a report with the credit agency explaining that you paid back your debts to the collection agency but the effect this will have on future credit will vary by who you are trying to get credit from. I would never pay back credit that has been discharged by bankruptcy. There is no financial incentive to do so unless you are trying to get credit from the same company that the debt was discharged from. Even then, make sure you get it!
in writing that they will give you credit when the previous debt is paid. (There is no real reason to do this as there are many alternative credit sources). A bad debt will be on your credit report for as long as it is still bad. i.e. until you pay it off or discharge it under bankruptcy. Then it can be removed 7 or 10 yrs. AFTER the payoff or discharge. If you don’t file bankruptcy and don’t pay off the debt then the creditor can continue to report the bad debt to the credit report every month and keep the bad report indefinitely. Not all creditors will do this, they report it once and be done with it. Rebuilding credit takes time. Start slowly with a secured credit card or a store card. Keep your limits low to a manageable level and pay off the debt quickly. If your not able to manage credit control, stay away from any credit card and try for a car loan. Most dealers can find a loan for people with bad credit. Pay it on time and pay it off. If you’ve decided to go!
ahead with bankruptcy, don’t pay anything. I’ve never heard !
anything
about how old a car needs to be in order to deem it seizeable or not, however, the b/r laws very by state as to what property/assets can be considered exempt. Generally they expect that you need a car to get around in. Also, the value of your assets would only be a concern if they outweigh the value of your debt — like if you had a second car worth $10K, they’d say you have to liquidate it to cover some debt. For you financially, it is good that you are on disability if this is the time you are filing b/r. (Question — if you worked part-time, wouldn’t that interfere with your amount of disability benefits??) Re: damaged credit — the only option to consider is to join one of those credit counseling services. Once you join, they “negotiate” with the creditors to eliminate all of the piled up interest rates and late fees. They also agree to return your credit status to an R1 (positive status). However, while you are enrolled you cannot use those credit cards and any c!
redit you apply for may be denied because being in credit counseling is seen as a negative (i.e., “you can’t pay your own bills on time …??”). If your overall debt is fairly low, this could be an option for you. But if you owe like $50K, it could take 5 or more yrs to pay off and you’d have high monthly payment. As far as any inheritance money — any new or large sums of money or assets you receive six months before you file and six months after discharge is up for grabs by the court. Even if you used this money to payoff the creditors, at this point, your credit rating is bad and will stay bad but the acct would be listed as a Charge-Off or Paid-Off, meaning you did pay off the acct but only after it was in collections. This negativity will remain for 7-10 years also. Usually they’d offer a settlement amount (generally just the principle), and if you choose to pay them off, ask if they’d return your credit status to positive. If yes, ask them to put it in writing. I!
f no, don’t pay it at all. (Also, anything derogatory on your!
record
would stay that way for 7-10 years from the last date of activity on the acct, not from when you opened it. Making a payment is considered activity.) Just file for bankruptcy and get it over with. As soon as you file you’ll start getting offers in the mail for new credit cards (probably secured ones) and car loans (probably at high interest rates). Generally, you should wait at least six months after the discharge before applying for new credit cards. Also, make sure to read the fine print because some of them have “setup” fees and annual fees that could be as high as $200, while only giving you a limit of $300, with a 20%-25% interest rate. Although the b/r is on your record for up to 10 years, rebuilding your credit after b/r takes about two years.
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May 14th, 2008 at 12:00am Under Bankruptcy Questions
Question:
Currently, I am in the middle of a divorce. To date, I have been stuck with all of the bills in addition to paying $1000 in spousal support. My wife has been temporarily awarded her car along with the payments. She also has 3 other credit cards, and is also co-signed on the mortgage. I’ve recently found that she has filed for Chapter 7. My questions are these: 1. How will bankruptcy affect the divorce precedings? 2. Is there a way to find out who she has listed in her bankruptcy? (Is this public knowledge? I know that all creditors must be listed, but I don’t trust that she has listed them all.) 3. She will be awarded a substantial amount from my 401K and pension. Will this play into her bankruptcy although she has not been awarded 1/2 of the 401K and pension yet, but will be when the divorce is final? 4. Since she is co-signer on the mortgage, should I have my attorney quit claim her off the mortgage or will the bankruptcy solve that problem? (It is agree!
d that I will be keeping the house, since the house is worth less than what is owed.) 5. Since I am a co-signer on her car loan, and she has elected to keep her car, how will that affect me now and in the future when the bankruptcy/divorce is final? 6. Will her filing bankruptcy have any bearing on the amount of spousal support she will be awarded? 7. Is she obligated to notify her attorney handling the divorce that she is filing bankruptcy? (Reason being that we anticipate going to trial, and she will incur more debt in attorney fees.) If anyone has any general information as to these concerns and/or might know a little about Washington state laws regarding divorce and bankruptcy your input or comments would greatly be appreciated.
Answer:
Generally, > 1. How will bankruptcy affect the divorce precedings? It may delay it slightly. It may also affect such things as the marital distribution and the payment of debts, since she won’t be legally obligated to pay the!
debt. > 2. Is there a way to find out who she has listed in!
her ban
kruptcy? > (Is this public knowledge? I know that all creditors must be listed, > but I don’t trust that she has listed them all.) If you go down to the bankruptcy court, her filings are public. > 3. She will be awarded a substantial amount from my 401K and > pension. Will this play into her bankruptcy although she has not been > awarded 1/2 of the 401K and pension yet, but will be when the divorce > is final? It may, depending on which state you live in and whether the pensions are fully exempt. > 4. Since she is co-signer on the mortgage, should I have my attorney > quit claim her off the mortgage or will the bankruptcy solve that > problem? (It is agreed that I will be keeping the house, since the > house is worth less than what is owed.) You cannot quitclaim someone off a mortgage (as contrasted with a deed). However, the bankruptcy will relieve her of her personal obligation for the mortgage. > 5. Since I am a co-signer on her car loan, and she has elected to > ke!
ep her car, how will that affect me now and in the future when the > bankruptcy/divorce is final? Assuming she pays the car note (and reaffirms the debt in those jurisdictions that require it), you’re fine. If she doesn’t, you’re on the hook. > 6. Will her filing bankruptcy have any bearing on the amount of > spousal support she will be awarded? Perhaps. She has more money available to her, since she doesn’t have to pay the discharged debts, which would tend to lower the support she would need. > 7. Is she obligated to notify her attorney handling the divorce that > she is filing bankruptcy? (Reason being that we anticipate going to > trial, and she will incur more debt in attorney fees.) If she owes him money, yes. If not, no (although it would be pretty dumb not to do so). > Currently, I am in the middle of a divorce. To date, I have been stuck > with all of the bills in addition to paying $1000 in spousal support. > My wife has been temporarily awarded her car along w!
ith the payments. > She also has 3 other credit cards, and is !
also co-
signed on the > mortgage. I’ve recently found that she has filed for Chapter 7. > My questions are these: > 1. How will bankruptcy affect the divorce precedings? All property issues should be frozen until the BK case is closed (usually 90 or so days from the filing date, but could be longer in some cases). If you are in a community property state (not sure if Washington is), then all of your property becomes part of the bankruptcy estate subject to the control of the trustee until the case is closed. Bottom line: there should be no litigation regarding property issues until after the case is closed. > 2. Is there a way to find out who she has listed in her bankruptcy? > (Is this public knowledge? I know that all creditors must be listed, > but I don’t trust that she has listed them all.) Yes and yes. Go to the clerk of the bankruptcy court where she filed and ask to review her file and to make copies. Give these copies to your divorce attorney ASAP. > 3. She will be !
awarded a substantial amount from my 401K and > pension. Will this play into her bankruptcy although she has not been > awarded 1/2 of the 401K and pension yet, but will be when the divorce > is final? She should have listed all of your marital assets and obligations. She should also have listed the support she receives from you and any property that she has actually received from you as part of the divorce. If she did not list some or all of these items (especially the spousal support), she may have committed fraud on the court and on her creditors and bad things may or may not happen in her BK case as a result. > 4. Since she is co-signer on the mortgage, should I have my attorney > quit claim her off the mortgage or will the bankruptcy solve that > problem? (It is agreed that I will be keeping the house, since the > house is worth less than what is owed.) The important thing is to keep the mortgage payments current. The bankuptcy will not discharge the mortgage or your!
responsibility to pay the mortgage. It is too late to save th!
e mortga
ge account from being listed in your credit report as being included in a bankruptcy filing since she has already filed. > 5. Since I am a co-signer on her car loan, and she has elected to > keep her car, how will that affect me now and in the future when the > bankruptcy/divorce is final? Your credit report will be adversely affected since the car loan will be tagged with a bankruptcy notation and your name was on the loan (same as with the home mortgage). > 6. Will her filing bankruptcy have any bearing on the amount of > spousal support she will be awarded? I would argue to the family law court that the bankruptcy filing reduces her financial need if it discharges debts that she was paying for at the time that spousal support was determined. Also, if her filing effectively dumps more debt on your shoulders and you end up paying more each month for these debts, you can argue a decreased ability on your part to pay spousal support. Ask your divorce attorney about filing a!
motion to modify spousal support. > 7. Is she obligated to notify her attorney handling the divorce that > she is filing bankruptcy? (Reason being that we anticipate going to > trial, and she will incur more debt in attorney fees.) Only if she owed her attorney fees at the time she filed, in which case the attorney is a creditor entitled to notice of the bankruptcy filing. Post-petition fees, that is attorney fees incurred after the bankruptcy is filed, are not affected by the bankruptcy filing.
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February 11th, 2008 at 12:00am Under Bankruptcy Questions
Question:
We are in debt and considering bankruptcy. We have consolidated debt several times to no avail. Now our only option seems to be bankruptcy. We have some questions though— 1.) The company I work for (in South Dakota) has a 401K plan as well as stock options. I have a little invested into both and was wondering if they are safe? 2.) When you declare chapter 7 what do they take? anything worth value? who determines what has value? 3.) We have heard that the attorney fee needs to be paid up front ( we can’t afford a gallon of milk) are there options ? Thank you for any help anyone
Answer:
Generally, 401(k) plans are exempt. The ESOP may or may not be, depending on how it was set up (if it is an ERISA-qualified plan, it probably is). It depends on South Dakota’s exemptions (which I don’t know). In the majority of Chapter 7 cases, people keep everything they have. Many clients work out a payment plan with their attorney. As soon as the fee and costs a!
re paid, the case is filed. I’d suggest speaking with an experienced bankruptcy attorney to find out the specific answers to your questions. Most offer free initial consultations.
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March 8th, 2008 at 12:00am Under Bankruptcy Questions
Question:
I am about to go bankrupt in the UK after a rejection vote for my IVA application. My problem has built and compounded over nine years due to job redundancies, marriage breakup and CSA requirements. I have a salaried job of 19.5k plus approx 3k bonuses (not guaranteed). My mortgage is only approx 40% of a possible rent if I am forced to sell my home. I have no other assets. I am seperated and have my 4 year old son staying with me for 1 week out of every four, - so I don’t have official custody. My house is worth approx 48k and mortgage is approx 46k. I would really like to keep my home. My solicitor has advised that the receiver will probably allow my father to buy the interest in the property for the amount of the equity plus conveyance costs. All my other debts are unsecured loans and credit cards. Does anyone have any experience of this situation, the likely outcome, repurcussions, and/or anything else I might need to be aware of? I REALLY would appreciate a!
ny help you can give. The thought of losing my home is frightning me to death.
Answer:
Your best bet is to post this question in one of the UK legal websites. Most of the lawyers here are from the US.
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March 31st, 2008 at 12:00am Under Bankruptcy Questions
Question:
If I file in FL. will I have to cash in my Ameritrade account? It’s not an IRA but it’s also not much.
Answer:
Are you filing yourself?? If not, your lawyer should tell you and if he/she is not, why are you seeing/paying him/her?? Anyway, certain assets can be considered exempt depending on the equity in them (and that varies by state). If the balance is not nearly enough to cover any of what you owe, you shouldn’t be overly concerned. You have to list this as an asset on the Personal Property Schedule with the amt, then at the end you total all assets. Then you list of all the totals from each Schedule on your Summary of Schedules which then shows if your assets outweigh your liabilities at all. If there is a discrepancies, they may want you to start selling off/cashing in stuff.
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May 3rd, 2008 at 12:00am Under Bankruptcy Questions
Question:
I can not for the life of me, understand why the cc companies will not take less in the interest rates for payments. They would get all their money. As it is, I borrow from one to pay the other. I am in the processs of writing letters to the cc companies, with Nov. payments, asking them to please help, by reducing the interest rates. I expect to get either no reply or a flat-”not our policy type answer”. Has anyone had any success contacting them?
Answer:
What you are looking for is to do a “consumer proposal”, which usually involves a lowering of the interest rate. You usually have to involve a credit counsellor, and also shows up on your credit bureau. You should be aware that when they get the “I’m in trouble letter” they may freeze your account. That probably does not or should not matter if you are over your head, though. I did just what you are doing. I wrote a letter that basically said, everything I’m paying is going to interest, and this !
can’t continue. One or two creditors did in fact give me a 0-6% int. rate. It eliminated available credit of course, but also eliminated all late charges. Their offer was for about a year when I think the int rate would go to an intermediate level (but the acct would be reactivated). The other c cds sent me to CCC (Consumer credit counseling) for CCC to work up a proposal. Only my credit union, which already had a moderate int. rate (11%) would not budge. All the others agreed to take 2.5% of balance per month or less, and cut the int. to 9% or lower. And i think the CCC rates were permanent over hte proposed 5 year period of repayment. (Unfortunately, my budget didnt’ really balance, and my situation worsened (obligations to sick parents) and after about a year of almost meeting the plan, I fell off of it.) I think CCC is a good idea for someone who can pay back if only they get a break in the interest rate. There is a caveat however. From what I’ve reaad, some cred!
itors will report you as “paying under a special plan” which i!
s a fair
ly derogatory rating though not as bad as being grossly behind or bankrupt. Others may leave you as I1 (paid as agreed). Nonetheless, if you can realistically pay under CCC, I think it’s a good idea. The creditors will probalby review your acct. and perhaps even freeze it (if you say you can’t pay unless they lower the interest rate). If you want to avoid this you might just call them and ask about a lower rate (not mentioning you are in trouble or feeling overwhelmed). You can also watch your current cards for balance transfer low rates, but watch for “teaser” rates that go back up. Or you coudl even perhaps find a new card with lower rates to transfer to. BUT the obvious problem is if you don’t close the higher rate card. This is how I got too much credit which I later used and got over my head. I took new cards out to get a better rate, but left the other one open (and at first unused but……). If you are over your head, I’d go to the companies as you have sugg!
ested or go to CCC. With some companines you may not get a good offer from direct contact unless you get behind (marring your credit report). CCC shoudl be able to set you up, even if you are not behind at all.
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July 31st, 2008 at 12:00am Under Bankruptcy Questions
Question:
I hope there’s some pros out there who can advise me on this. I’ve already filed with only a month to go before the Chapter 7 is discharged. Meantime, I’m living in a new state, while my attorney is in Arizona. Here’s the problem, I paid him upfront, at first he wasn’t too bad, a week to return my calls. Now it’s been 2 1/2 weeks going on 3 and I haven’t received any aknowlegedment to my calls,letters or faxes, except for a broken promise 10 days ago that he’d reply from his secretary. Is there any leverage I can use to make him do his job,a reporting agency I can call, should I call his partner and complain, hire a new attorney,demand a partial refund and fire him? All I want is a little concientious treatment and the knowledge he’s actively representing me. What to do, this thing has me a nervous wreck anyways and this guy hasn’t helped with his lousy client service. I’m worried because too because there are a few issues surrounding this filing.
Answer!
:
Not to excuse the attorney’s lack of responsiveness (what is happening here is the number one reason for ethical complaints to attorney grievance commissions), but what, if anything, remains to be done in your case? In most Chapter 7s, after the Meeting of Creditors, all that is done is wait for the discharge. A letter attaching copies of your previous correspondence and dates of phone calls stating that your next letter is to the attorney grievance commission will normally get a quick reply.
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February 23rd, 2008 at 12:00am Under Bankruptcy Questions
Question:
i live in illinois and subsequent to a divorce i owe $12000 in lawyer fees and a judgement to my ex for $8000 if i filled for bk would these be eliminated i have no other debt but no asset other than a 2500 car and 401k if anyone knows ? thank you ill is not a community prop state
Answer:
Unless the attorney’s fees were ordered to be paid in the divorce decree (and oftimes even then) they are dischargeable in bankruptcy. I have written a Bankruptcy FAQ which should answer many of your questions about what is involved–it may be found at http://users.erols.com/lawyer/FAQ/br_faq.htm. I strongly recommend speaking with a local bankruptcy attorney. Most offer free initial consultations and he or she should be able to review your specific situation and let you know what you can and can’t do.
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August 14th, 2008 at 12:00am Under Bankruptcy Questions
Question:
Had my bankruptcy discharged a couple of months ago. Things are going very
well since then. My new job pays me an average of $1000+ a week and I have
no dependants.
I want to start rebuilding my credit and as it happens I very much need to
replace my car.
I want to buy a decent used car in the $10,000 - $15,000 range but I DO NOT
want to go through a dealer. I would much rather buy through a private
party.
However, with my “colored” credit history, what kinds of loan institutions
are most apt to help me out? Should I try my local bank? A credit Union?
Are there independant auto loan outfits that will write a check directly to
me instead of forcing me to go through some “approved dealer” list?
Also, obviously I would want the lender to make monthly reports to the
credit rating agencies showing my timely payments (which I will make with a
secured CC which I will also pay off in a timely manner) so that combined,
those 2 things will hopefully raise my score as rapidly as possible
allowing me to refinance my loan for a better rate after a year or so.
Should I assume my showing 4 months worth of $1000 a week paystubs from my
employer will help me?
Answer:
your credit score is not likely high enough to get a private party loan from
anyone. You are likely to HAVE to go to a dealer at this point, because
dealers usually end up fixing the cars before they sell them to you. I dont
think anyone will give you a private party auto loan unless your score is
above 540 or so, and probably wont find many until you at 560 or 580.
I dont know what you mean by a “private party” loan?!
An auto loan is an auto loan. The bank or whoever
will just need specifics (make, model, year..etc)
just like any other auto loan. Used cars are..just the
same but at a higher interest rate (usually).
My advise is to go to the bank/credit union
you usually do business with and discuss
it with them.
Don’t get me wrong this WILL be harder
than going through a “dealer”.
You still may not get a bank to loan you money, but a dealer deals with more
then banks. The bank will look at your BK and score and lean toward the BK
in the decision and final answer of NO.
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