cancel
Showing results for 
Search instead for 
Did you mean: 

Going to be entering into bankruptcy.. Need help

New Member

Going to be entering into bankruptcy.. Need help

So to start off I am 24 and in around 50k of unsecured debt. This was a combination of failed business decisions and just plain stupid actions. This all came to a head about 9 months ago. I currently live with family as I can't afford to really do anything else. About 9 months ago I was perfect on payment history just very extended on credit limits. Money was tight and I had one of those hair brained ideas to make quick money to pay my debt back. Part of these decisions included various high interest loans from the creditors you would never want to go to. Long story short this failed horribly and there's loans I have not even been able to make one payment on since then. I have been scrambling ever sense but none of the payment options given have even remotely been an option due to the amount of the debt. The reason for the post today is I was summoned for what I am assuming is a garnishment although I am not sure. Just a court date. I have spoken to a lawyer who advised to proceed with filing bankruptcy immediately to avoid this garnishment. I am honestly scared to put it bluntly. None of these loans were taken out in bad faith but i don't know if the trustee will see it that way. I have no asserts really minus the basics (TV car (will lose as it's financed and past due)). Chapter 7(i believe where you pay it back?) is also not an option because of the payment amount.. My lawyer doubts it will be considered what he called bankruptcy fraud but looking at the penalty for that (5 years in prison) I'm scared I've ruined my life over some stupid financial decisions as a young adult... Is this a good possibility? I understand I should trust the lawyer but I'd like prepare myself for the worst... I am in tn if this matters.
Message 1 of 11
10 REPLIES
Valued Contributor

Re: Going to be entering into bankruptcy.. Need help

This situations happen a lot, listen to what our lawyers have to say and file.

For fraud, I’m assuming they’ll have to investigate to MAKE SURE you didn’t purposely acquired all that debt to plan no not paying it.


FICO 8 EQ 727, EX 719, TU 731
FICO 9 EQ 746
Message 2 of 11
New Member

Re: Going to be entering into bankruptcy.. Need help

I’m going to go ahead and file. I’m probably overthinking things . Only 10 or so grand of the debt has been unpaid the remaining was paid perfectly until I just couldn’t handle it any longer. Just hope to be able to move on from this. Learned my lesson and then some.
Message 3 of 11
Valued Contributor

Re: Going to be entering into bankruptcy.. Need help


@Mongomery12345 wrote:
I’m going to go ahead and file. I’m probably overthinking things . Only 10 or so grand of the debt has been unpaid the remaining was paid perfectly until I just couldn’t handle it any longer. Just hope to be able to move on from this. Learned my lesson and then some.

If you did not knowingly commit fraud, and are not hiding assets you are worrying needlessly. Ch. 13 is where you pay the creditors back based on ability to do so, Ch 7 is relinquishing assets and is over in a few months. Your lawyer and the BK court will decide which you qualify for. If all debt can't be repaid in 3-5 years it will likely be Ch 7. If a reasonable repayment plan is possible, the court will do a Ch 13, but your payments will be determined based on how much is affordable to pay after living expenses. In both cases keeping the automobile is very possible no matter how delinquent by signing a re-affirmation agreement or just making payments depending on what your State laws are. Some require a re-affirmation, some don't, and it is always better to not re-affirm if not required to keep the asset. If allowed to keep the asset while not signing a re-affirmation, and later you see you can't meet the payment, you can then voluntarily surrender the asset without it reporting as a repossession on your credit. I have filed both ch 13, and ch. 7 in my young and dumb years. I have also helped my Neice file ch 7 about 2 years ago. Just answer all questions honestly and hide nothing, and you will be fine. Expect total time spent in court of about 30 minutes. It is not nearly as bad as people imagine it to be.




TU fico08=831 04/18/18
EX fico08=821 04/18/18
EQ fico08=826 04/18/18
Garden since 4/5/2017
Message 4 of 11
Valued Contributor

Re: Going to be entering into bankruptcy.. Need help

You want a chapter 7 for sure.   The only people who take 13's are those whose incomes are too high or who want to try to save their house which has more equity than is allowed.   It's a question of income and not ability to repay.    If your income is under the chapter 7 threshhold (usually like 50-60K for a single person), take the 7 and be done with it!   Also on the car, I kept mine without reaffirming and just paid it off.   My auto loan was with Capital One.  You don't get the benefit of showing the payment history as you pay off the loan but you also can surrender it at any time and just walk away without any further credit damage beyond the bankruptcy.   Some auto lenders will just come and take the car if you don't reaffirm, and I have never heard of a lawyer advising a client to reaffirm.   My lawyer told me he would have no part in it and that if I wanted to be so stupid, I could do it without his help.  (He got his point across).

FICO 08: EX-698, EQ-732, TU-706 - [4/12/2018]
FICO 09: EX-735, EQ-749, TU-739 (4/12/2018)
Mortgage: EX-736, EQ-712, TU-750 - [4/12/2018]
NFCU NavChk 15K | NFCU Visa 6.99% 31.5K | CapOne Venture Visa 50K | Barclay Aviator MC 9.5K | Discover 24.4K | Alliant 3% Visa 25K | BECU Visa 10K | BECU CLOC 10K | DCU Visa 10K | BofA Ak Air Visa 5K | Citibank secured MC 1K | Amazon Prime 10K *** 201.4K Total Revolving.
Share Secure Loan Alliant $100/$15,000
BK 7 Filed 8/23/2013 - Discharged 11/27/2013.
Message 5 of 11
Valued Contributor

Re: Going to be entering into bankruptcy.. Need help


@CH-7-Rebuilding wrote:

You want a chapter 7 for sure.   The only people who take 13's are those whose incomes are too high or who want to try to save their house which has more equity than is allowed.   It's a question of income and not ability to repay.    If your income is under the chapter 7 threshhold (usually like 50-60K for a single person), take the 7 and be done with it!   Also on the car, I kept mine without reaffirming and just paid it off.   My auto loan was with Capital One.  You don't get the benefit of showing the payment history as you pay off the loan but you also can surrender it at any time and just walk away without any further credit damage beyond the bankruptcy.   Some auto lenders will just come and take the car if you don't reaffirm, and I have never heard of a lawyer advising a client to reaffirm.   My lawyer told me he would have no part in it and that if I wanted to be so stupid, I could do it without his help.  (He got his point across).


This might be true in some cases, but especially more recently income and expenses are taken in to account. The trustee is actually there to represent the creditors and recover as much as possible for the creditors. If a single person is making 40000 dollars a year and expenses are low the trustee might require a chapter 13. For the OP in Tennessee, median income for BK is 44,886...If his income is more than that he will likely have to go with chapter 13. In that case, unsecured creditors would be paid last. Chapter 7 is still the most likely, but there are so many filing now that the BK court is more likely than it once was. In any case, the chapter 13 payments would be affordable.




TU fico08=831 04/18/18
EX fico08=821 04/18/18
EQ fico08=826 04/18/18
Garden since 4/5/2017
Message 6 of 11
Established Contributor

Re: Going to be entering into bankruptcy.. Need help

OP,

 

So how much debt is still outstanding ? What is your income and expenses ? Do you have any judgments ?

 

I would not worry about fraud, they have to prove intent , a very high bar. The court does not have the time to investigate all the cases for possible fraud. I know people who ran up cards then immediately filed bk, no problems.

Message 7 of 11
New Member

Re: Going to be entering into bankruptcy.. Need help

By outstanding do you mean owed ? The 50k or so mentioned is debt I still owe that’s past due . The 10k is what I was mainly worried about because of the lack of payment history attached to it . I have no judgments or anything against me (I assume this is what the court papers I received would do however but I’m unsure) After taxes my income works out to around 2k a month. Expenses as of now would be basic at 350 a month car 150 a month insurance 300-400 a month in gas (I unfortunately drive over 200 miles a day to and from work) and then whatever I can to help out for rent or utilities (usually not much by the time I subtract for food and a basic phone. This has basically been a downward spiral for close to 2 years that’s really damaged most of my life (not expecting people to feel sorry for me there). Just would really like to be able to move on from this..
Message 8 of 11
Regular Contributor

Re: Going to be entering into bankruptcy.. Need help

Ok so it looks like you make about 32k and have expenses of about 900 before utilities phone and food. Not much left for debt payments 

 

creditors need judgment first to get garnish or bank levy. Always answer lawsuits and deny debt otherwise you get default judgment. 

 

I would try try what I call passive bankruptcy. Stop paying everyone and see who sues. It takes a strong stomach and a person who knows legal rights. If everyone sued and there was no way out, you pull bk card. I was 50k plus in debt with little income. This is what. Debt. Chase had most of accounts and walked away on most. I got lucky 

Message 9 of 11
Regular Contributor

Re: Going to be entering into bankruptcy.. Need help

I meant to say....this is what I did. 

Message 10 of 11