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Forced into BK?

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movinonup79
Regular Contributor

Forced into BK?

So things have been very rough over the past year.  I bought a house in 2010 and don't want to lose it.  In December last year I found out I had to have serious, emergency surgery and had to take almost 6 months off work unpaid.  I have been fightin illness and now my work let me go from my job on December 14th.  I am thinking of bankruptcy because I don't know how to get out of this hole.  Here are the details:

 

Medical Bills:  approx. $25K+

House: Has been increasing in value since I bought it and am not underwater, but behind 4 payments.

Credit Cards - Approx. $5,000 (this is how I kinda got by during surgery).

Car - Have a co-signer on this.

 

Also, my bank account when negative a lot and now I'm in chexsystems and no way to get out... so bank account-less. Smiley Sad

 

I am working with US bank to try and get an unemployment forbearance and then they suggested a modification.  Also, I need to keep my car, but I'm not sure how BK would affect this without going after my co-signer.

 

I know I need to wait until after I file taxes to file bk, otherwise they will take your refund, but how do I go about this?  Any suggestions?  Any any suggestions on how I can get a bank account?

 

Thanks!

 

04/01/10 - TU: 659 / EX: 648 / EQ: 601 (LO Scores)
2/25/10 - EQ 588 / EX 660 (LO) / TU 633
2/9/10 - EQ 567 / EX 585 / TU 601
1/12/09 - EQ 544 / EX 570 / TU 593
12/12/09 - EQ 536 / EX 555 / TU 582
11/13/09 - EQ 536 / EX 586 / TU 566
11/03/09 - EQ 540 / EX 544 / TU 574
07/18/06 - EQ 478
Message 1 of 8
7 REPLIES 7
Anonymous
Not applicable

Re: Forced into BK?

Hi movingonup,

 

How did you fare in your plans to go back to school?  Sounds like you've had to do some serious regrouping.

And you've decided not to move and rent out your home?

Message 2 of 8
movinonup79
Regular Contributor

Re: Forced into BK?

I am back in school, but health issues have been a problem.  I ended up getting into a school here in Utah and had to take a while off because I was sick so often - and then BAM - my work lets me go.  I hope the are giving me my unemployment, even though they really did me wrong.  I have so many medical bills and I feel so tied down to this house, so I'm trying to figure out my best course of action as I can't get caught up on those medical bills.  So I'm trying to figure out the best plan of action!

04/01/10 - TU: 659 / EX: 648 / EQ: 601 (LO Scores)
2/25/10 - EQ 588 / EX 660 (LO) / TU 633
2/9/10 - EQ 567 / EX 585 / TU 601
1/12/09 - EQ 544 / EX 570 / TU 593
12/12/09 - EQ 536 / EX 555 / TU 582
11/13/09 - EQ 536 / EX 586 / TU 566
11/03/09 - EQ 540 / EX 544 / TU 574
07/18/06 - EQ 478
Message 3 of 8
SoulMaster
Established Contributor

Re: Forced into BK?

movinonup79-

 

First, I am not an attorney (though I'm the Head Paralegal @ a debt relief law firm), so none of this is legal advice.

 

Second, I am a BK survivor... It's been 13 months, and I've been on a hard road trying to get back in the good graces of the banks and CRAs.  My cScore ahs gone from ~470 preBK to 664,and it's slowly but surely climbing.  I used to work in Tech, and made ~$200K/year.  I revolved 30K or so on CCs, paying them off every few months, then charging them back up.  Also, my house payment was $4200.  Last year, when I filed, I had >$70K in CCs, my house was 1 day out of foreclosure, and I was making about ~$30K/year in a job I took because it paid more than unemployment. (Actually, its the job I have now, but I got seriosuly promoted and make more).  The attorneys I work for abhore BK.  It's a last resort option, even though we're a debt relief law firm.  We'd rather negotiate, loan mod, short sale... whatever we can to avoid BK.  So with that said:

 

Your situation is horribly bleak right now, but I've got good news for you:  You aren't bankrupt.

 

Without getting into the ins-and-outs too deep, you're in a rut and it sucks, but if you walked into the door of our law firm asking for a BK (which we file plenty of) we'd tell you the following:

 

1.  You aren't bankrupt.

2.  Yes, right now, it looks like you're in a horrible hole that you can't get out of, but you're not.  If you recover within the next 6 mo, or 12mo, or 18 mo, why regret a BK for the next 10 years?

3.  If your house really has equity, and you don't think you'll get a job in the next 2 mo to cover the mortgage: Sell it. (and sell it FAST) Get yourself a reputable RA and get it sold.  Our firm also deals in Foreclosures, and the banks are salivating to get their hands on anything with equity.  Here in Vegas, when they find one, they'll foreclose so fast your head will spin.

4.  The medical bills (and the credit cards) will wait.

5.  Yes, they will be a total PITA calling and writing, but such is life.  Here are your priorities in order:  1. Food. 2. Roof. 3. Power/Gas/Water.  There is nothing else until you start getting back on your feet.  If you can wrestle together a budget the right way, you may even be able to keep the house (though this may require baloney and cheese).

6.  Once you ARE back on your feet, call the CC and the Medical debt and settle them off.  You can do this yourself, you don't need to pay anyone. (note: My firm handles settlements along w/ BK, but your debts are too low to make hiring someone worth it.

7.  If you haven't done so already, buy the book Total Money Makeover... it will change your life.

 

 

RE #6.  Your CC should settle for ~20¢ on the dollar ($1000).  The medical debt should settle for between 5¢ and 15¢ on the dollar ($1250 and $3750).  So you have to ask yourself: Do I REALLY want to file BK for $2250 of debt?  No.  That's just plain silly.  Yeah, being late for awhile is going to cause your cScores to drop until you're back on your feet, but in comparison to the ~90pts for 10 years, it's a walk in the park.

 

The exception to all of this is if you need a BK to literally save your house from foreclosure, but you'd only file the day before the foreclosure sale (if they won't give you a forebearance, which is a great idea), and after you (or an attorney) has pushed the sale a couple times w/o using the BK.

 

Note:  If you go to an attorney that only "sells" BK.  That's what s/he's going to SELL you...  If you do go to one that handles all aspects of Real Estate and Personal Debt, they should tell you exactly what I just did... except when they say it, it's legal advice and you pay for it.  ;-)

 

Good luck,

 

-SM

 

btw:  If you can do it physically, #1.a would be apply for 10 jobs/day.  Fulltime, parttime, doesn't matter... find ANYTHING that will give you $10/hour (hopefully more) and let you work 40/week (hopefully more).

I am not an attorney and none of what I write should be construed as legal advice. For legal advice please consult an attorney.

Starting Score: ~470 preBK(8/2010)
Current Scores as of Late January 2016 All 700+. Last CR pull from a lender(housing) was mid-score 749.
Goal Score: 700+ - reached.
Message 4 of 8
SoulMaster
Established Contributor

Re: Forced into BK?

Oh, forgot one thing.

 

To get a bank account, go to a credit union that offers "New Start" checking (like Nevada Federal/OneNevada here in LV).  (or Chase, which has the same thing w/ a different name).  It will cost you $20/mo for the 1st year, then it converts to free.  DO NOT, I repeat DO NOT even come close to overdrafting your new account, if you do, they'll shut it down and you'll have to wait for cksystems to clear.

 

-SM

 

I am not an attorney and none of what I write should be construed as legal advice. For legal advice please consult an attorney.

Starting Score: ~470 preBK(8/2010)
Current Scores as of Late January 2016 All 700+. Last CR pull from a lender(housing) was mid-score 749.
Goal Score: 700+ - reached.
Message 5 of 8
movinonup79
Regular Contributor

Re: Forced into BK?

Wow, thank you so much.  I do want to save my house, so I have been applying like crazy.  I'm actually a legal assistant as well, but the market is bleak here right now.  I just talked to my headhunter and I may be able to do a temp job at a large firm next week, so some cash!  Also, tax return comes so hoping to pay some mortgage payment there as well.  I kind of added up the medical bills and you are right, they aren't enough to bk out of...so I'm going to take your route!  Thank you so much!

04/01/10 - TU: 659 / EX: 648 / EQ: 601 (LO Scores)
2/25/10 - EQ 588 / EX 660 (LO) / TU 633
2/9/10 - EQ 567 / EX 585 / TU 601
1/12/09 - EQ 544 / EX 570 / TU 593
12/12/09 - EQ 536 / EX 555 / TU 582
11/13/09 - EQ 536 / EX 586 / TU 566
11/03/09 - EQ 540 / EX 544 / TU 574
07/18/06 - EQ 478
Message 6 of 8
movinonup79
Regular Contributor

Re: Forced into BK?

I also attend school, but took all online courses this semester to free up any available time for any kind of work.  Staying positive.  When one door shuts another opens!

04/01/10 - TU: 659 / EX: 648 / EQ: 601 (LO Scores)
2/25/10 - EQ 588 / EX 660 (LO) / TU 633
2/9/10 - EQ 567 / EX 585 / TU 601
1/12/09 - EQ 544 / EX 570 / TU 593
12/12/09 - EQ 536 / EX 555 / TU 582
11/13/09 - EQ 536 / EX 586 / TU 566
11/03/09 - EQ 540 / EX 544 / TU 574
07/18/06 - EQ 478
Message 7 of 8
SoulMaster
Established Contributor

Re: Forced into BK?

Anytime.  Good luck to you, seriously.

 

-SM

I am not an attorney and none of what I write should be construed as legal advice. For legal advice please consult an attorney.

Starting Score: ~470 preBK(8/2010)
Current Scores as of Late January 2016 All 700+. Last CR pull from a lender(housing) was mid-score 749.
Goal Score: 700+ - reached.
Message 8 of 8
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