File Bankruptcy or Wait it Out?!

[Anonymous]

Hi! I have been reading and learning a ton on this forum, but I still can't decide what scenario will be best for me. 

I'm 24 and divorced. My ex got the majority of the debt in the divorce as I did not work for the majority of our marriage (we were trying to have a baby and I had high risk pregnancies. Once we got a baby, he had an affair. Go figure). However, most of that debt is showing up on my credit report and from what I understand, if he doesn't pay it my divorce decree does not protect me from having it negatively affect my credit score. 

Most of the debt is credit card debt - we had manageable credit card debt, but had a child in 2008 who was born extremely prematurely and passed away. After funeral expenses, etc., we were just paralyzed - we paid our immediate expenses but let everything else slide. No payments have been made on the credit cards since October of 2008. According to my credit report they're scheduled to fall off in 2015, and I believe the SOL in my state is 4 years (so I still have a year to go). 

There is also extensive medical debt due to the pregnancies, etc. - again, he is responsible for that according to the divorce decree, but a $4,000 hospital bill just showed up on my credit report, and I'm sure a couple more (probably of the same amount or more) will follow. 

I'm currently in school full time, living with family, not many expenses but no income besides grants, scholarships, and a bit of child support here and there when the state garnishes it from my ex's paycheck. I have no assets except for a car that was given to me by family. I'm not sure if I ought to just wait out the SOL of the credit cards or file bankruptcy (because of the medical debt). I'll graduate from college in 2013, and obviously as I'm a single mother being able to provide for my son (like get an apartment!) is the most important thing. I'm fine living with family until I graduate.. but I'm hoping to rebuild my credit at least a little bit in the interim. 

I've thought about going to a bankruptcy attorney, but I'm not sure if I would get the best advice seeing as they make their living off of people filing bankruptcy. 

Thanks in advance for any insight you may have! 

[Booner72]

I'm so sorry to hear about your baby and divorce.  I hope that things turn around soon.   Has the "dust settled" and you know exactly what you are left with?  It sounds like more are still to come.  I think until you know where you stand, you will have to wait to decide what to do.  The problem with just waiting is out is those collection agencies can sue you for the money - and lots of judgments seems possible to be worse than one bankruptcy.  I'm sure that you will get all the info you need to make the best decision to move forward.  The BK section could probably be very helpful to you in addition to the Rebuilding section of MYFICO.

[Anonymous]

Thank you so much for your reply! The dust has mostly settled - the divorce was final in March of this year. The rest of the medical bills are likely being sent to my ex's address, but I obviously know which hospitals we were at and I could easily find that information. All the other debts are from 2008 or before and I haven't opened any other credit accounts since... so that's really the only thing I'm "waiting for" - for those other medical bills to hit collections (since my ex obviously isn't paying them - he may have declared bankruptcy himself, I don't know) and show up on my credit report. That's what I'm worried about, is the potential judgments. I'm also not sure what happens with medical debt (the medical debt information out there seems really ambiguous!).. I don't know if it is on the same timeline as credit card debt or not. I keep going back and forth on what to do! I'm sorry if I should have posted in the bankruptcy forum - I wasn't sure, so opted for this one!

[llecs]

I wouldn't worry about the debt right now. They have one more year, but the odds of them doing anything inside that year are slim. Even if pushed against the wall after being served, you can always get on a payment plan to repay it and avoid a judgment. Besides, you have no income to garnish and it's not like you have any assets anyway. Plus a BK could cost more that the $4k debt is worth, not only in attorney fees, but having a major baddie linger for another 7 years (the BK itself) vs. 4 yrs max for the medical debt. If super worried, you can always go back to the medical center and stall them. Check the SOL laws in your state to see if a payment or promise to pay resets SOL. If not, you can always stall them with a payment plan.