topic Re: Contempating Chapter 7 or default in Bankruptcy

Contempating Chapter 7 or default

Anonymous — Fri, 23 Jun 2017 16:55:24 GMT

I have no one to blame but myself for this. I currently have 55k in unsecured debt and 27k in Vehicle loans(no equity) and a mortgage with no equity. I am in a situation where debt payments are taking up all my available income and I am stuck charging utilities and food. One personal loan is the one destroying my finances, $35k, 31% interest and $1500 a month. I made a poor decision. Ive owe 30k on it now. The company I owe does not negotiate while the loan is current. I havent been late on anything but I can see the cycle that could eventally lead to 80k in unsecured debt because I dont have any cash to break the credit cycle if I want to stay current. Here are the options I have considered.

Default on the 30k loan and have plenty of breathing room to pay off credit cards and use cash for food in utilities. Try to settle at a later date or should they sue witout entertaining a settlement file for BK. The downfall is if this happened several years down the road chapter 7 would be off the table because I would have too much equity in my house that I dont want to lose.

File chapter 7 in the next few months. Cheapest option but I would be destroying some great relationships with navy fed, cap one,amex, and discover.

Do nothing, it would likely resolve itself in 5-7 years but with an enormous amount of stress.

I have never been here before and would appreciate feedback

Re: Contempating Chapter 7 or default

Anonymous — Fri, 23 Jun 2017 16:58:21 GMT

@Anonymous wrote:
I have no one to blame but myself for this. I currently have 55k in unsecured debt and 27k in Vehicle loans(no equity) and a mortgage with no equity. I am in a situation where debt payments are taking up all my available income and I am stuck charging utilities and food. One personal loan is the one destroying my finances, $35k, 31% interest and $1500 a month. I made a poor decision. Ive owe 30k on it now. The company I owe does not negotiate while the loan is current. I havent been late on anything but I can see the cycle that could eventally lead to 80k in unsecured debt because I dont have any cash to break the credit cycle if I want to stay current. Here are the options I have considered.

Default on the 30k loan and have plenty of breathing room to pay off credit cards and use cash for food in utilities. Try to settle at a later date or should they sue witout entertaining a settlement file for BK. The downfall is if this happened several years down the road chapter 7 would be off the table because I would have too much equity in my house that I dont want to lose.

File chapter 7 in the next few months. Cheapest option but I would be destroying some great relationships with navy fed, cap one,amex, and discover.

Do nothing, it would likely resolve itself in 5-7 years but with an enormous amount of stress.

I have never been here before and would appreciate feedback

Pay off Navy Fed, Capital One, Amex and Discover and close the accounts before filing BK7.

Re: Contempating Chapter 7 or default

Anonymous — Fri, 23 Jun 2017 19:11:36 GMT

Id have to first stop paying on the personal loan in order to pay them off. Navy fed accounts for 17k alone. Chapter 13 could be an option if it effectively stops unsecured interest. I divided out all my debt over 60 months and it effectively comes out to half of what I am paying now.

Re: Contempating Chapter 7 or default

Anonymous — Fri, 23 Jun 2017 20:44:14 GMT

Just spoke with a Bankruptct attorney and it looks like chapter 13 will be the route I go.

Re: Contempating Chapter 7 or default

Anonymous — Fri, 23 Jun 2017 23:02:49 GMT

@Anonymous wrote:
Just spoke with a Bankruptct attorney and it looks like chapter 13 will be the route I go.

Curious . . .why a 13?

The first attorney I talked to said only a 13 was a possible. My second opinion got me into a 7.

Big decisions . . important to make sure!

Re: Contempating Chapter 7 or default

wa3more — Fri, 23 Jun 2017 23:54:09 GMT

no judgments or suits now so why file ?. Stop paying everything now and try to save money to settle at 30% or less down the road. To continue paying now is throwing good money after bad.

Re: Contempating Chapter 7 or default

Anonymous — Fri, 23 Jun 2017 23:57:43 GMT

@Anonymous wrote:
@Anonymous wrote:
Just spoke with a Bankruptct attorney and it looks like chapter 13 will be the route I go.
Curious . . .why a 13?

The first attorney I talked to said only a 13 was a possible. My second opinion got me into a 7.

Big decisions . . important to make sure!

I want to repay but pay thousands in interest a month. The 13 will allow me to repay most and even repaying all of it once the interest stops my repayment will be less on a 3 year repayment than it is on one loan

Re: Contempating Chapter 7 or default

Anonymous — Sat, 24 Jun 2017 00:01:10 GMT

@wa3more wrote:
no judgments or suits now so why file ?. Stop paying everything now and try to save money to settle at 30% or less down the road. To continue paying now is throwing good money after bad.

Amex, navy fed, and lending club are likely to sue from what I read. Filing while I am current would damage my credit but maybe not as bad as if everything was in default

Re: Contempating Chapter 7 or default

wa3more — Sat, 24 Jun 2017 02:08:03 GMT

credit unions will sue. Research arbitration. I used it against amex.

Forgot your credit and score for now. If it doesnt have 4 wheels or 4 walls, do not spend money on it. BK is nuke option, use as last resort.

If you don't have much to take suits and judgments would be useless. And you can always negotiate these down the road. I defaulted on about 50k mostly to chase. Settled all for about 10k. Chase walked away from a 20k credit line. It's hit or miss who will sue.

Re: Contempating Chapter 7 or default

Anonymous — Sat, 24 Jun 2017 03:29:58 GMT

@wa3more wrote:
credit unions will sue. Research arbitration. I used it against amex.

Forgot your credit and score for now. If it doesnt have 4 wheels or 4 walls, do not spend money on it. BK is nuke option, use as last resort.

If you don't have much to take suits and judgments would be useless. And you can always negotiate these down the road. I defaulted on about 50k mostly to chase. Settled all for about 10k. Chase walked away from a 20k credit line. It's hit or miss who will sue.

I honestly considered this. Only owe 2k to amex so I could probuly pay it. Navy fed is not that high in interest so I could probuly pay them. The killer is the lending club loan that looking back they should have never underwriten. I took it but I couldnt afford it and quickly realized it when I started repaying it

Re: Contempating Chapter 7 or default

Anonymous — Sat, 24 Jun 2017 04:56:35 GMT

If you file a BK, either, your Last Three Months need to be zero, or will NOT count.

So when you speak to an Attorney, your chances of saving a credit card most likely will not be possible.

* we all would like to save an existing relationship with Navy, but I also believe that there is a $ dollar limit, on how much you can pay back over a short period of time.

Talk with your Attorney, and see what your options are. You will be specifically limited to those options, not your preference.

While I am sure that this is not fun for you, but if you decide that this is what you have to do, then that is what you have to do.

Best Wishes ! ! !

VeteranHomeBuyer wrote:

navy fed, cap one,amex, and discove

* read the FIRST post of this thread.
You will quickly realize that your opportunities with AMEX are not good.

Bankruptcy Friendly Credit Cards
http://ficoforums.myfico.com/t5/Bankruptcy/Bankruptcy-Friendly-Credit-Cards-Pt-2/td-p/3999737
.

Re: Contempating Chapter 7 or default

medicgrrl — Sat, 24 Jun 2017 11:31:32 GMT

Is there no way to refinance that loan with NFCU?

Re: Contempating Chapter 7 or default

Anonymous — Sat, 24 Jun 2017 15:12:57 GMT

@medicgrrl wrote:
Is there no way to refinance that loan with NFCU?

I wish but navy fed is really stingy with unsecured personal loans in my experiance

Re: Contempating Chapter 7 or default

Anonymous — Sat, 24 Jun 2017 15:23:09 GMT

@Anonymous wrote:

If you file a BK, either, your Last Three Months need to be zero, or will NOT count.

So when you speak to an Attorney, your chances of saving a credit card most likely will not be possible.

* we all would like to save an existing relationship with Navy, but I also believe that there is a $ dollar limit, on how much you can pay back over a short period of time.

Talk with your Attorney, and see what your options are. You will be specifically limited to those options, not your preference.

While I am sure that this is not fun for you, but if you decide that this is what you have to do, then that is what you have to do.

Best Wishes ! ! !

VeteranHomeBuyer wrote:

navy fed, cap one,amex, and discove

* read the FIRST post of this thread.
You will quickly realize that your opportunities with AMEX are not good.

Bankruptcy Friendly Credit Cards
http://ficoforums.myfico.com/t5/Bankruptcy/Bankruptcy-Friendly-Credit-Cards-Pt-2/td-p/3999737
.

Thanks, this is why I am on the fence about just defaulting on the one loan and putting 10k back over the next year or two to try and settle it. That would save all other relationships as I could debt snowball them. Only concern would be Amex taking adverse action becasuse i defaulted with someone else. They already cut my limit in half on one of my cards because i dont use it enough

Re: Contempating Chapter 7 or default

medicgrrl — Sat, 24 Jun 2017 20:15:22 GMT

Maybe try and get some help/ideas here before making any decisions.

http://ficoforums.myfico.com/t5/Personal-Finance/bd-p/Retirement