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Second thoughts, ch 7... please help!!!

Valued Member

Second thoughts, ch 7... please help!!!

Hello! Question here--

 

What would you do? BK Ch 7 or rebuild?

 

Situation:

 

25 baddies:

*mostly 1-year-old charge-offs/collections for credit cards (which make up more than 50% of my total debt)

*a few small personal loans, utility services due to fall off in 1-2 years

*an old appartment which will fall off in 1-2 years

Approx. $25k+ debt total

 

5 positive closed accts, 2 positive active accts

Up to date student loans

 

I am currently unemployed as we transition to a new state due to my husband's recent job change. Last year I made about $15k (was told I have to bring tax forms)

 

I have 1 asset to my name, which is my paid-off vehicle (no loan, paid cash)

and about $1,500 in my bank account

 

I know that if I file, it will take all the money I have saved up, but my husband can handle the household bills until I find a new job. He is making about $1000/wk after work expenses (he is a contractor) with this new job and we have three kids, and our rent is around $1200/mo.

 

Hopefully I provided enough background info that you guys can help me make the best decision. Thanks in advnace Smiley Happy

Message 1 of 17
16 REPLIES
Valued Contributor

Re: Second thoughts, ch 7... please help!!!


MyLoFico17 wrote:

Hello! Question here--

 

What would you do? BK Ch 7 or rebuild?

 

Situation:

 

25 baddies:

*mostly 1-year-old charge-offs/collections for credit cards (which make up more than 50% of my total debt)

*a few small personal loans, utility services due to fall off in 1-2 years

*an old appartment which will fall off in 1-2 years

Approx. $25k+ debt total

 

5 positive closed accts, 2 positive active accts

Up to date student loans

 

I am currently unemployed as we transition to a new state due to my husband's recent job change. Last year I made about $15k (was told I have to bring tax forms)

 

I have 1 asset to my name, which is my paid-off vehicle (no loan, paid cash)

and about $1,500 in my bank account

 

I know that if I file, it will take all the money I have saved up, but my husband can handle the household bills until I find a new job. He is making about $1000/wk after work expenses (he is a contractor) with this new job and we have three kids, and our rent is around $1200/mo.

 

Hopefully I provided enough background info that you guys can help me make the best decision. Thanks in advnace Smiley Happy


I would consult a "good" BK attorney for advice...often a free initial consult. Most good BK attorneys will not advise filing if it is better handled otherwise. The 2 biggest mistakes most make are getting finances in such shape that BK is needed, and waiting too long to declare BK. Often BK is the only answer that will actually get someones finances straightened out, and to wait is just kicking the can down the road and delaying financial recovery. You will likely be able to exempt the small assets you have.




TU fico08=820 11/10/17
EX fico08=812 10/25/17
EQ fico08=818 10/25/17
Garden since 4/5/2017
Message 2 of 17
Community Leader
Super Contributor

Re: Second thoughts, ch 7... please help!!!

I think this depends on the whether the State you are moving to is a community property state or not. If it is, then I don't beleive you can file just yourself, it would have to be a joint filing.

Most Recent FICO 8 Scores EX601/TU580/EQ589 12/08/2017 Starting scores 553/485/543 08/25//2017
~~~Credit lines~~~~
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Message 3 of 17
Valued Member

Re: Second thoughts, ch 7... please help!!!


NormanFH wrote:

I think this depends on the whether the State you are moving to is a community property state or not. If it is, then I don't beleive you can file just yourself, it would have to be a joint filing.


It's Georgia. We do not have to file jointly. 

Message 4 of 17
Community Leader
Super Contributor

Re: Second thoughts, ch 7... please help!!!

As Sarge suggested above, a good BK attorney will be able to give you better advice on how to proceed.

Most Recent FICO 8 Scores EX601/TU580/EQ589 12/08/2017 Starting scores 553/485/543 08/25//2017
~~~Credit lines~~~~
SDFCU VISA Secured $250
Discover Secured $200
Message 5 of 17
Valued Member

Re: Second thoughts, ch 7... please help!!!


NormanFH wrote:

As Sarge suggested above, a good BK attorney will be able to give you better advice on how to proceed.


How will I know a "good" attorney from one who is not? Just search for reviews? Ask certain questions?

Message 6 of 17
Regular Contributor

Re: Second thoughts, ch 7... please help!!!

Most have free consultations. If you work, you may have an EAP that will refer you. If you have a union, they may also refer you. Internet searches may also yield some results for you, or even word of mouth if you have anyone you can trust to ask.

 

How to tell if one is good - well, you have the right to not book them, and to walk out of the room (and into your car, and drive away.) If they blow off your questions, you don't have to sign on the dotted line. If they make it sound like everything is easy peasy and nothing has ANY consequences, they might not be good. Now, a good lawyer is going to reassure you a lot because BK is actually much easier than many people build it up to be. However, I passed up three attorneys because I felt they didn't answer my questions to my satisfaction. Either they blew me off altogether, or they sounded like they didn't have the specific knowledge I needed them to have in this specific area given my specific needs, etc.

 

Don't be afraid to consult with 2-3 atty's BUT don't put this off too long either. 

 

GL.

 

 

Ch7 discharged 10/2017. Pre-file FICOs high 400s.
11/2017 EX 609; EQ 634; TU 583
Message 7 of 17
Valued Member

Re: Second thoughts, ch 7... please help!!!

Thank you all for these answers, they are very helpful. I will definitely consult with a few different attorneys. I just want to be sure they give me the best advice and not just steer me toward a BK to collect more fees. 

Message 8 of 17
Frequent Contributor

Re: Second thoughts, ch 7... please help!!!

The bankruptcy exemptions that should apply will be where you spent the last 2 years, not where you recently moved. You're not considered a resident for filing purposes until you've lived there 2 years.

4/25/11 FICO: EQ 761....EX 770.....TU 744
3/6/2011 FICO: EQ 710... EX 718... TU 710
09/09 FICO: EQ: 525
Message 9 of 17
Frequent Contributor

Re: Second thoughts, ch 7... please help!!!

for 25k, i would not be in a rush to file.

 

Are you currently being sued, have judgments/garnishment/liens ?

 

I would wait it out and see what happens. I had 50k of debt, some creditors walked away and others i settled at 20-30% using the arbitration card as leverage.

 

Keep all correspondence you get from collectors and learn FDCPA/FCRA . If creditors violate, they will cut you checks.

 

Remember, BK is last resort. 

Message 10 of 17