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Member
Posts: 6
Registered: ‎09-26-2008
0

Bankruptcy or try to power through it?

Good morning - I am currently sitting at 547EQ / 545 TU and 529 EX.  I have a number of derogatory things on my reports including the following:

 

Negatives:

 

3 judgments –

apartment complex for $685 – filed Decemebr of 2012

State Tax Lien for $7844 – filed June of 2013

medical bill for $851) – filed October of 2016

 

 

I also have 2 repossessions –

$8316 – 8/2014

$10478 – 5/2014

 

And probably 9-10 other accounts ranging from $150 to $1500.

 

Positives:

 

2 student loans totaling $24864 that I WILL be staying current on for the next two years

1 auto loan opened in February of 2016 ($27K) that is current and will be staying current.

1 credit card (OpenSky Secured- $200 limit) that is brand new.

2 paid off Auto Loans – 1 paid off in March of 2014 and 1 in February of 2016.

 

 

I have made some very poor choices in the past but I am working towards straightening this entire mess out. My goal is to be able to purchase a house as soon as possible, preferably within the next 2 years.  I am VA eligible and I have my Certificate of Eligibility.  I am seriously considering filing Chapter 7 bankruptcy if only to erase the 2 repossessions and 2 of the three judgments (I realize the tax lien will remain and I am working on getting arrangements made to pay that off in the next year.

 

My questions is – would it be better for me to go ahead and file bankruptcy now and take the hit and try and rebuild from what would be around a 450 FICO or so, or should I try and pay all of these off over the next two years?  I will not be able to pay off the repossessions and therefore they would remain on my record but at the point I try to buy a house they would be 4-5 years old.

 

Thank you in advance for your time and advice.

 

- Justin

New Member
Posts: 7
Registered: ‎03-21-2017
0

Re: Bankruptcy or try to power through it?

Well you have a few problems, however they can be solved. All of your debt can be settled for as little as a fraction of what is owed. Bankruptcy might cost you as much, but settlement could be done alot sooner without the stigma of bankruptcy.  i would consult with a BK attorney and go to settlebankdebt and see what is favorable. 

Frequent Contributor
Posts: 431
Registered: ‎06-22-2016
0

Re: Bankruptcy or try to power through it?


JayteeSooner wrote:

Good morning - I am currently sitting at 547EQ / 545 TU and 529 EX.  I have a number of derogatory things on my reports including the following:

 

Negatives:

 

3 judgments –

apartment complex for $685 – filed Decemebr of 2012

State Tax Lien for $7844 – filed June of 2013

medical bill for $851) – filed October of 2016

 

 

I also have 2 repossessions –

$8316 – 8/2014

$10478 – 5/2014

 

And probably 9-10 other accounts ranging from $150 to $1500.

 

Positives:

 

2 student loans totaling $24864 that I WILL be staying current on for the next two years

1 auto loan opened in February of 2016 ($27K) that is current and will be staying current.

1 credit card (OpenSky Secured- $200 limit) that is brand new.

2 paid off Auto Loans – 1 paid off in March of 2014 and 1 in February of 2016.

 

 

I have made some very poor choices in the past but I am working towards straightening this entire mess out. My goal is to be able to purchase a house as soon as possible, preferably within the next 2 years.  I am VA eligible and I have my Certificate of Eligibility.  I am seriously considering filing Chapter 7 bankruptcy if only to erase the 2 repossessions and 2 of the three judgments (I realize the tax lien will remain and I am working on getting arrangements made to pay that off in the next year.

 

My questions is – would it be better for me to go ahead and file bankruptcy now and take the hit and try and rebuild from what would be around a 450 FICO or so, or should I try and pay all of these off over the next two years?  I will not be able to pay off the repossessions and therefore they would remain on my record but at the point I try to buy a house they would be 4-5 years old.

 

Thank you in advance for your time and advice.

 

- Justin


The state tax lien will most likely prevent you from purchasing a home and will need to be paid off prior. I'm in Oregon and work for the state, and when we place liens against people they can't purchase/sell property without paying us first. It also isn't DC in BK. The rental and medical bill might be more since there is usually a default interest rate attached to the judgments. You should check, and see if both places will settle for less and satisfy the judgments. Again, the judgments could put a hiccup in your home purchase since usually title companies want those paid prior to close. I would contact the smallest balance first and move up in balance and see who will settle and knock em off one at a time or pay them off. Your debt that could be DC in a BK is maybe estimated at 20k-ish.. and that's something you can totally deal with on your own and if you aren't afraid of doing the legwork. I wouldn't hire a debt settlement company, in all my years doing collections they do more harm than good, and like to charge you a lot of fees to do nothing. MOST creditors will be happy to just deal with you directly, and will treat you  the same they would a 3rd party company who's trying to settle debt anyway.

Ch7 BK filed 7/5/16, DC 10/12/16
Contributor
Posts: 94
Registered: ‎09-30-2016
0

Re: Bankruptcy or try to power through it?

Also remember that you cannot get a VA loan for 2 years minimum, following the discharge of a Chapter 7 bankruptcy. Longer for conventional loans.

 

If you settle on debt, you may get a 1099 for anything written off that exceeds $600.

 

I'd talk to a few BK attorneys and specifically ask about the feasibility of discharging the taxes and liens. Also come up with a list of everything that you owe. If the 10 accounts are $150 each and total $1,500 it may be worth paying them off. If they're closer to $15,000 BK may be a better option given the other unsecured debt you owe.

Frequent Contributor
Posts: 474
Registered: ‎10-05-2012
0

Re: Bankruptcy or try to power through it?

some real good advice has been given. I would avoid BK and use as last option, a nuke option. Also, see how long judgments are good for in your state. Here in NY, money judgments good for 20 years, one of worse states in the country.

Member
Posts: 6
Registered: ‎09-26-2008
0

Re: Bankruptcy or try to power through it?

[ Edited ]

In Oklahoma, Tax Liens are indefinite unless paid off, then it's 7 years (from the date filed).  Regular judgments are also 7 years.  Looking at Chapter 13 instead of Chapter 7.  I can qualify for a VA loan after a year in Chapter 13 as long as my payments are not late and I have no other delinquencies.

Frequent Contributor
Posts: 474
Registered: ‎10-05-2012
0

Re: Bankruptcy or try to power through it?

ok, so you have a while on judgments. Ch 13 is tough from what i understand. More of a reason to avoid BK until absolutely necessary.

 

 

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