topic Re: Should i proceed with bankruptcy in Bankruptcy

Should i proceed with bankruptcy

Anonymous — Tue, 24 Sep 2019 13:53:20 GMT

here is my situation, I have been rebuilding my credit and then I get a letter about a loan that I had a default judgement from back in 2013 for $2300, the balance is now $4600 and they sent me a 15 day letter notifying my they will garnish my wages if not paid.

They give you the option to do a payment to avoid garnishment, which I cant afford that either, the only option is doing chapter 7 just for this one debt. I called them directly to see if they would be willing to work with me and they said if i pay 50% and then they would make a payment schedule with me, of course I cant afford that.

Is there any other options I am missing? just seems so drastic to go through bankruptcy for one account to avoid being garnished and ruing my credit and losing all the credit I have established.

Re: Should i proceed with bankruptcy

Anonymous — Tue, 24 Sep 2019 14:02:16 GMT

@Anonymous wrote:
here is my situation, I have been rebuilding my credit and then I get a letter about a loan that I had a default judgement from back in 2013 for $2300, the balance is now $4600 and they sent me a 15 day letter notifying my they will garnish my wages if not paid.
They give you the option to do a payment to avoid garnishment, which I cant afford that either, the only option is doing chapter 7 just for this one debt. I called them directly to see if they would be willing to work with me and they said if i pay 50% and then they would make a payment schedule with me, of course I cant afford that.
Is there any other options I am missing? just seems so drastic to go through bankruptcy for one account to avoid being garnished and ruing my credit and losing all the credit I have established.

What does the rest of your financial situation look like?

A BK would need to provide relief from significant additional financial hardships in order to be worth it IMO.

Also, you mention "losing all the credit you have established". Do you not have the money available on any other accounts you could borrow from?

Re: Should i proceed with bankruptcy

PutThatMoneyOnTheTable — Tue, 24 Sep 2019 14:07:53 GMT

Could you provide a clearer picture of your situation for us to see how we can help you?

What are your current score, inquiries, other debts, cards you currently have and their balances?

IMHO, filing bankruptcy for that one debt isn't worth it.

Re: Should i proceed with bankruptcy

Anonymous — Tue, 24 Sep 2019 17:05:00 GMT

FICO is 580. Not high but better than where I started. I have 2 credit cards limits of $500 with around $300 in balances. Garnishment would be about $500 a month, and I can not afford that as I currently live paycheck to paycheck so that is why my only option in my opinion is bankruptcy to prevent the garnishment so I can survive and pay bills.

Re: Should i proceed with bankruptcy

Tuscani — Tue, 24 Sep 2019 19:03:05 GMT

No way I would file for that amount. Work out the payment arrangement in writing and include any goodwill adjustments to your credit if you can. Even if it is something.. you can negotiate this. It does not have to be $500mo. Pick up a 2nd part time gig. You can pay this off quicker than you think. And the BK is going to cost you just about the same amount to file.

Re: Should i proceed with bankruptcy

Anonymous — Tue, 24 Sep 2019 19:43:17 GMT

Also, what’s the statute of limitations in your state? You may be past it, where they can’t come after you legally for the money, but only pester you in the hopes you’ll pay.

Re: Should i proceed with bankruptcy

PutThatMoneyOnTheTable — Tue, 24 Sep 2019 19:47:40 GMT

@Tuscani wrote:
No way I would file for that amount. Work out the payment arrangement in writing and include any goodwill adjustments to your credit if you can. Even if it is something.. you can negotiate this. It does not have to be $500mo. Pick up a 2nd part time gig. You can pay this off quicker than you think. And the BK is going to cost you just about the same amount to file.

You say they require 50% upfront so if you've tried negotiating with no success, what about a temp part-time job? Worst case scenario and they garnish your wages the part-time job can fill the gap (you mentioned paycheck to paycheck). Then going forward see what expenses can be reduced to eliminate living paycheck to paycheck.

Re: Should i proceed with bankruptcy

2b2rich — Tue, 24 Sep 2019 19:48:34 GMT

@Anonymous wrote:
here is my situation, I have been rebuilding my credit and then I get a letter about a loan that I had a default judgement from back in 2013 for $2300, the balance is now $4600 and they sent me a 15 day letter notifying my they will garnish my wages if not paid.
They give you the option to do a payment to avoid garnishment, which I cant afford that either, the only option is doing chapter 7 just for this one debt. (Unless this is your only debt, you can't choose one to have discharged and not the others, unless it's like your car or house where you can claim exemption, but if you have credit cards or loans, you will have to include them also). I called them directly to see if they would be willing to work with me and they said if i pay 50% and then they would make a payment schedule with me, of course I cant afford that. (If you can't afford $2300, I don't see how you can afford an attorney? That's almost what I paid for the attorney and filing fee together and I don't know of any attorneys who will file before PIF).
Is there any other options I am missing? just seems so drastic to go through bankruptcy for one account to avoid being garnished and ruing my credit and losing all the credit I have established.

Hard to believe they waited 6 years to attach your pay, are you sure the letter is from the legitimate owner of the debt? Did they provide you an itemized list of what the other $2300 is for?

Re: Should i proceed with bankruptcy

Anonymous — Tue, 24 Sep 2019 23:28:09 GMT

Bankruptcy will cost a flat rate $600 with an additional $335 from the court so bankruptcy is cheaper than the $4600 debt. I appreciate the advice but seems to me Chapter 7 is the way to go. The collection agency is weltman weinberg & reis and they are not willing to make any kind of deal. Should I try contacting the original creditor?

Re: Should i proceed with bankruptcy

FireMedic1 — Tue, 24 Sep 2019 23:42:30 GMT

Dont know where you live. But you can Google Legal Aid in your area. There are law firms that will do pro bono work for you. But you must meet some guidlines. Legal Aid helps low-income people. People with income less than 125% of the federal poverty guidelines are eligible and may qualify for assistance. Sometimes people with less than 200% of the federal poverty guidelines can qualify.

Re: Should i proceed with bankruptcy

2b2rich — Wed, 25 Sep 2019 00:07:51 GMT

@Anonymous wrote:
Also, what’s the statute of limitations in your state? You may be past it, where they can’t come after you legally for the money, but only pester you in the hopes you’ll pay.

OP stated it is a default judgement and those are usually good for 10 years, but even then in most cases they can be renewed, so I'm pretty sure they can enforce collection.

Re: Should i proceed with bankruptcy

2b2rich — Wed, 25 Sep 2019 00:13:45 GMT

@Anonymous wrote:
Bankruptcy will cost a flat rate $600 with an additional $335 from the court so bankruptcy is cheaper than the $4600 debt. I appreciate the advice but seems to me Chapter 7 is the way to go. The collection agency is weltman weinberg & reis and they are not willing to make any kind of deal. Should I try contacting the original creditor?

Wow, I had no idea you could get one as inexpensive as that. Just make sure your attorney is aware of the pending threat of them attaching your pay so that he gets it filed before that happens. Good luck

Re: Should i proceed with bankruptcy

FireMedic1 — Wed, 25 Sep 2019 00:21:01 GMT

@2b2rich wrote:
@Anonymous wrote:
Bankruptcy will cost a flat rate $600 with an additional $335 from the court so bankruptcy is cheaper than the $4600 debt. I appreciate the advice but seems to me Chapter 7 is the way to go. The collection agency is weltman weinberg & reis and they are not willing to make any kind of deal. Should I try contacting the original creditor?
Wow, I had no idea you could get one as inexpensive as that. Just make sure your attorney is aware of the pending threat of them attaching your pay so that he gets it filed before that happens. Good luck

I paid $2650 for a no asset. Wheres this at? Leave it to a big city lawyer I guess.

Re: Should i proceed with bankruptcy

Jnbmom — Wed, 25 Sep 2019 00:23:33 GMT

Wait you are filing on a single debt of 4600??

Re: Should i proceed with bankruptcy

2b2rich — Wed, 25 Sep 2019 00:25:24 GMT

@FireMedic1 wrote:

I paid $2650 for a no asset. Wheres this at? Leave it to a big city lawyer I guess.

Mine wasn't quite that expensive, it was over $2K though (and also no assets)... and he said he was giving me a discount

Re: Should i proceed with bankruptcy

Anonymous — Wed, 25 Sep 2019 00:36:27 GMT

Man, with all the things out there like Uber, Lyft, etc, I just hate to think of someone filing BK for $4600. Yes you can rebuild afterward, but is it worth the hard work and time for such a relatively (in the world of BK) small amount? I’d be racking my brain looking for ways to raise the cash. Sell plasma, do yard work, drive for a ride company, whatever - I would say they far outweigh the negatives of a BK and its associated consequences for that amount.

Re: Should i proceed with bankruptcy

Anonymous — Wed, 25 Sep 2019 16:23:31 GMT

I'm not sure how much weight a judgment is on your CR as opposed to a BK and you're being threatened with garnishment but both are equally bad in my opinion. Most states does not allow more the 25% of your disposable earnings to be taken out as garnishment.

I would call the collection agency and offer them $100 per month or else you're filing for BK. See what they say.