topic Re: Is BK inevitable? in Bankruptcy

Is BK inevitable?

SFernandez13461 — Tue, 26 Aug 2014 22:44:53 GMT

I used to be a frequent visitor in the rebuilding thread and used the advice there as I settled as many of my old debts as I could and began building what has been a solid credit history for the past five or six years. I had hoped to start working toward purchasing a house within the next few years. But unfortunately over the past two years I've lost my employment (used to make 35-50k, then in 2012 I made 8k, and this year nothing at all, and I was the breadwinner), and my husband had a serious car accident, broke his clavicle, and totaled two cars. We didn't have medical insurance and only had liability coverage on his car, so we're pretty much screwed, like many of you, I'm sure.

Now I'm trying to figure out how to move forward and I wondered whether any of you have some advice regarding making the decision to file BK. With my husband's income alone we can barely make the minimum payments and probably won't be able to for long. With a checkered credit history (previous defaults in 2007), I don't think I have much chance of being approved for a consolidation loan. I'd rather avoid BK if possible, but every day it feels more like it's inevitable.

Any suggestions would be appreciated.

Here's a quick recap of our situation:

Husband's income: 18,480/year after taxes

CC debt: 30k +any remaining debts from years ago. God knows what they're at now.

Student loans: 12k (I realize they wouldn't be discharged. Just another bill we have to deal with)

Minimum payments: approximately 1200/month -- just moved and don't have access to my statements at the moment, but it's always climbing.

The interest rates are all pretty high, about 12-24.99%.

Thanks for your time.

Re: Is BK inevitable?

0REDSOX7 — Wed, 27 Aug 2014 00:32:18 GMT

While none of us on this board can sit here and tell you that you should or should not file bankruptcy, as that decision should be made with you and your spouse, and a qualified bankruptcy attorney.

However, based on what you posted, it seems a BK may be an option, but there is so much more to it than what you posted.

With that said, if you do decide to go through with a BK, rest assured that many of us here have been (or are going through it) and are here to answer any questions you have about the process.

Re: Is BK inevitable?

TRC_WA — Wed, 27 Aug 2014 14:54:59 GMT

Based on the numbers listed I would look into filing.

If I had debts equal to twice my income and could barely make the minimums on high interest accounts that is...

Re: Is BK inevitable?

SFernandez13461 — Thu, 28 Aug 2014 22:58:30 GMT

Thanks for your response. The more I read about the process the more I think I need an attorney, but my husband isn't thrilled with the idea.

Re: Is BK inevitable?

SFernandez13461 — Thu, 28 Aug 2014 23:01:43 GMT

When I got out my most recent collection letters and added up everything it came to over 84k. There's no way we'll ever pay all this off. I think I have to move forward with the bk at this point. We're still waiting to find out whether or not we'll get sued because of my husband's accident too. Feels pretty hopeless right now.

Re: Is BK inevitable?

StartingOver10 — Sat, 30 Aug 2014 14:15:50 GMT

I would say that you are a good candidate for filing Bk based on your post.

Check out several attorney's. They aren't the same. Stay away from " mill type" bk attorney's (those you see advertised on billboards and bus benches). Go with an independent practitioner that only practices Bk and no other type of law.

Interview them. Study up on Bk in your state so you know what to ask in the interview. Check out the Nolo series on Bk to learn about it before rushing in to file.

Timing is critical. Don't rush or be pushed into it. Remember, this is a business decision. Nothing to be ashamed of - but to be taken seriously all the same. http://www.nolo.com/legal-encyclopedia/bankruptcy-faq-29047.html

Re: Is BK inevitable?

barbaralee — Sat, 30 Aug 2014 14:22:00 GMT

If you file for BK and even before you are discharged you will be surprised at the amount of loan offers that will open up to you. If you go the BK route don't be foolish and apply for car loans, credit cards, etc and start racking them up in the name of "rebuilding credit". I agree with the sentiment that BK is a business decision. It can also be a new start. Unfortunately too many people find themselves in equal amount of debt after BK from those same, poor decisions being made.

Re: Is BK inevitable?

SFernandez13461 — Sun, 31 Aug 2014 00:24:36 GMT

I agree with you, barbaralee. I guess I've shown that I can handle credit responsibly for years at a time but that a few setbacks can quickly derail me. Clearly I've never been prepared to handle an emergency situation and certainly not a few back to back. But I don't ever want to end up in this situation again. I really hope I can get this over with relatively quickly and move on. I fought filing for so long. I should've done this a year ago.

I hope I'll be able to rebuild my credit eventually. But right now I just want to get out from under this very dark cloud.

On that note, does anyone have a rough estimate for what an attorney should charge in Southern CA? I'm getting quotes for 1300-1500. I know I've seen ads for around 899, but they seem to be paralegals who don't do very much for you. I'd like to get the help I need, but I don't want to pay more than I should for it.

Thanks.

Re: Is BK inevitable?

StartingOver10 — Sun, 31 Aug 2014 12:36:35 GMT

@SFernandez13461 wrote:
I agree with you, barbaralee. I guess I've shown that I can handle credit responsibly for years at a time but that a few setbacks can quickly derail me. Clearly I've never been prepared to handle an emergency situation and certainly not a few back to back. But I don't ever want to end up in this situation again. I really hope I can get this over with relatively quickly and move on. I fought filing for so long. I should've done this a year ago.
I hope I'll be able to rebuild my credit eventually. But right now I just want to get out from under this very dark cloud.
On that note, does anyone have a rough estimate for what an attorney should charge in Southern CA? I'm getting quotes for 1300-1500. I know I've seen ads for around 899, but they seem to be paralegals who don't do very much for you. I'd like to get the help I need, but I don't want to pay more than I should for it.
Thanks.

Your instincts are right. Stay away from those companies that just fill out the paper work for you and have paralegals and no attorney reviewing the filing.

This is one of those times where paying a low price really shows up - and not in a good way. One of the most critical parts of filing BK is making sure the petition is filled out correctly. It can make the difference between filing a Ch 7 and a Ch 13 in some cases.

We see the aftermath on this board for people that used a service or a poor attorney and it isn't pretty. That's why you want to interview several Bk attorney's and find one that is best for your particular case.

I don't know the average for a good attorney in CA. But I do know that had I not had a good attorney I would have been in a Ch 13 and not had a Ch 7. I paid $2700 including filing fees and it was worth every dime to me. I'm in Fl though so don't use the price I paid as representative for you. There are plenty of people here from CA here that can give you their experiences and what they paid.

Re: Is BK inevitable?

barbaralee — Sun, 31 Aug 2014 14:57:31 GMT

I paid $1500 in Missouri 4 years ago, I know a few people who filed here in Ohio and they paid anywhere from $12-1500. I think the norm is $1500 and up.

Re: Is BK inevitable?

ezdriver — Sun, 31 Aug 2014 15:02:34 GMT

I paid &1700 incuding filing fees here in Florida.

Re: Is BK inevitable?

TRC_WA — Sun, 31 Aug 2014 15:24:19 GMT

I paid $2500 for Ch 13. My previous vehicle was outside of the plan and I continued to make payments.

My attorney told me I didn't qualify for Ch 7. Whether or not that was the truth I'll never know... But he was a solo practitioner with a very good reputation.

Here we are 5 1/2 years later and I am happy with how things have turned out. I may have spent 4 years paying for everything in cash but the experience had helped me be much better at managing my finances... and all the IIB accounts and public record fall off my reports in 2016 rather than 2019.

Rebuilding has been super easy too... Much less difficult than what I've read from Ch 7 filers.

Re: Is BK inevitable?

SFernandez13461 — Mon, 01 Sep 2014 15:16:33 GMT

Thanks. While I don't want to get ripped off, I would rather pay more and feel like I'm in good hands. My husband on the other hand wants to go with the cheapest option. But I've finally persuaded him that we need help, so at least we're moving in the right direction.

I know I shouldn't rush to select an attorney either, but I have to admit I'm not sure how to proceed without one. I've very stupidly kept up the payments even though doing so meant there was nothing left and I had to keep using my credit cards. So far I've been advised to stop making payments asap but only once I have an attorney, and I'm days away from payments being due. I'm really feeling desperate to get the ball rolling.

Re: Is BK inevitable?

barbaralee — Mon, 01 Sep 2014 18:13:29 GMT

If you are planning on filing BK, and for sure you know that is what you are going to do then STOP MAKING YOUR PAYMENTS NOW. You would be throwing money away. Use that money for your family, or you mortgage. But if you know you are going to charge those credit cards off, than don't pay them.

Re: Is BK inevitable?

SFernandez13461 — Mon, 01 Sep 2014 23:18:16 GMT

I have no doubt I'm filing, and I'm thinking I should stop making payments. But I'm concerned because if I can't convince my husband to get on board relatively quickly we'll soon be at risk of being sued. From what I've read it seems they don't wait very long to take legal action anymore, and I don't want to add a judgment or wage garnishment to our long list of troubles. I think we should just file and get it over with. He would prefer I handle it myself or find the cheapest help available. I hope we can get on the same page.
Thanks. I don't think I'll keep throwing the money away. I'm going to need it to pay the attorney and file, hopefully very soon.

Re: Is BK inevitable?

TRC_WA — Tue, 02 Sep 2014 01:09:05 GMT

You get what you pay for... You have enough stress. Find the right attorney and let them handle it... You'll sleep better. I know I did.

Re: Is BK inevitable?

SFernandez13461 — Tue, 02 Sep 2014 01:46:09 GMT

Thanks. I'm going to try to get the ball rolling tomorrow if I can get an appointment with the attorney. I just want this to be behind us.