topic Re: Chapter 7 questions ? ? in Bankruptcy

Chapter 7 questions ? ?

noochski — Sat, 16 Feb 2013 18:36:32 GMT

Hello all, I have a few questions regarding a chapter 7 that i'm about to file and was hoping I could get some answers. First the reason for filing for BK7 is due to about $20K in medical bills and over $5K in other collection accounts that my wife and I have on our credit. I was told by our lender that these would need to be resolved prior to closing. I simply do not have enough $$$ to pay per the terms offered by the CAs. Most of the balances are held by the same CA(Medicredit) and they WILL NOT settle for less than 85% lump sum payment. This would be around $13K and if I accepted payments it would be $15K!!! All of these hospital bills are between 3-5 years old too so I though I would get some sort of break but no dice. My main question at this point is what to do with CCs that I have in good standing. I have 3 CCs(2 are at zero balance) and one has a balance of $41.00. With an eye toward rebuilding my credit afterwards should I pay this balance and close the account prior to filing? Leave it open with but with a zero balance? Leave the balance and let it be a charge off? How would these actions affcect my score after we emerge from the Chapter 7?

Re: Chapter 7 questions ? ?

chasmith — Sat, 16 Feb 2013 19:06:14 GMT

@noochski wrote:
Hello all, I have a few questions regarding a chapter 7 that i'm about to file and was hoping I could get some answers. First the reason for filing for BK7 is due to about $20K in medical bills and over $5K in other collection accounts that my wife and I have on our credit. I was told by our lender that these would need to be resolved prior to closing. I simply do not have enough $$$ to pay per the terms offered by the CAs. Most of the balances are held by the same CA(Medicredit) and they WILL NOT settle for less than 85% lump sum payment. This would be around $13K and if I accepted payments it would be $15K!!! All of these hospital bills are between 3-5 years old too so I though I would get some sort of break but no dice. My main question at this point is what to do with CCs that I have in good standing. I have 3 CCs(2 are at zero balance) and one has a balance of $41.00. With an eye toward rebuilding my credit afterwards should I pay this balance and close the account prior to filing? Leave it open with but with a zero balance? Leave the balance and let it be a charge off? How would these actions affcect my score after we emerge from the Chapter 7?

"Your lender"? Are you trying to get a mortgage, because you will have to wait at least two years after BK7 discharge.

Re: Chapter 7 questions ? ?

noochski — Sat, 16 Feb 2013 19:31:27 GMT

I know about the two years. But I won't be able to get these debts paid in the next two years anyways. I have a family of 4 with a combined income of $34K so paying the amount that Medicredit alone wants is out of the question. I offered to settle the debt for $5K and was shot down. They would only accept $13k payable within 30 days. Even on a $500.00/month payment paln I wouldn't have it paid off in 2 years. I also have $200.00/month in student loans that I must pay. So filing bankruptcy seemed like the best option and the fastest way to get this behind me.

Re: Chapter 7 questions ? ?

noochski — Sat, 16 Feb 2013 19:34:35 GMT

I know the student loans won't be discharges by the BK7 BTW

Re: Chapter 7 questions ? ?

noochski — Sat, 16 Feb 2013 19:38:12 GMT

i should have explained in my original post that my plans on getting a mortgage are postponed. . . My lender basically asked if I could pay these CAs within two years and when I said no he immediately advised a Chapter 7. . .

Re: Chapter 7 questions ? ?

Countingpennies — Wed, 20 Feb 2013 04:58:03 GMT

About your CC's in good standing, if the amount is small, I would pay it off if you can. You will come out of 7 with a few good marks on your report. I would take a shot at keeping them open (others may disagree.) Most likely they will be closed, but sometimes they make it through.

Re: Chapter 7 questions ? ?

Anonymous — Fri, 22 Feb 2013 21:16:57 GMT

My thought is, depending on who the credit cards are through, they will either close the account or reduce your available limits. If you want to keep a good standing with the credit card companies where you have small balances, then pay them off. Otherwise, including them won't hurt you any more.

Re: Chapter 7 questions ? ?

noochski — Tue, 26 Feb 2013 04:31:13 GMT

Thanks for the advice. I only had one card left with a balance remaining. I closed all of my secured cards prior to contacting an attorney so those shouldn't be an issue.

Re: Chapter 7 questions ? ?

Anonymous — Tue, 26 Feb 2013 12:22:45 GMT

I would pay the CCs off in full and CLOSE THEM before filing Chapter 7. It will be easier to get them back post BK.

Re: Chapter 7 questions ? ?

Anonymous — Tue, 26 Feb 2013 18:07:32 GMT

MovingForward,

I did this, at what time can I possibly reopen closed cards?

Re: Chapter 7 questions ? ?

noochski — Wed, 27 Feb 2013 01:17:06 GMT

I closed all of my other cards prior to even contacting the attorney. He didn't seem happy when i told him that I had done that and advised me to not pay/close any other accounts. But with my CC payment due on 2/22/13 I didn't want a deliquent payment prior to filing my BK7!!! That would only make my situation worse wouldn't it? So I paid the $41 and the account has a zero balance but I would just as soon close it. . . The Rep @ BofA told me that I could reapply for my CC as soon as my BK7 is discharged

Re: Chapter 7 questions ? ?

Anonymous — Thu, 28 Feb 2013 01:05:17 GMT

You can try after discharge. I would reopen the most BK friendly first and then garden that card for a year and then try to reopen another one.

Re: Chapter 7 questions ? ?

Anonymous — Thu, 28 Feb 2013 01:07:31 GMT

It looks good to the courts when you show delinquencies as it exhibits your inability to pay to the judge BUT recovery is harder when you burn those bridges.

Re: Chapter 7 questions ? ?

Anonymous — Thu, 28 Feb 2013 05:19:25 GMT

I closed a BOA, Discover, Capital One, and Orchard.

Re: Chapter 7 questions ? ?

noochski — Fri, 01 Mar 2013 01:55:10 GMT

I plan on reopening my BofA secured card with a $2000.00 limit ASAP after discharge.