topic Re: Should I file for bankruptcy in Bankruptcy

Should I file for bankruptcy

Anonymous — Sat, 04 Jan 2020 20:49:33 GMT

Hello I was in a abusive really bad relationship where I almost died...anyway I let this individual in a matter of months because he kept promising to pay it back put me in over $30k in credit card debt. I was on my way to buying home got my 3 lines of credit. One was Navy federal for $24k (maxed out) Chase for $5k (charged off) USAA $1500 (maxed) out. I am trying to get my life back on track currently living pay check to pay check cannot afford the minimum payments on the cards right now because I am behind on all my bills accept my rent and car insurance. I wanted to buy a home that dream is gone. Fees are just adding up on the cards that are open, my credit is in the 400s. I do not know what to do. I want to file for bankruptcy but I have a clearance and bankruptcy will always flag your clearance, even if they grant the clearance for the rest of your career you always have to discuss it because it will never go below a C level issue. I am currently over the $20k threshold the federal government allows for debt. Any advice would be help because I cannot sleep at night because of this.

Re: Should I file for bankruptcy

Harriet — Sun, 05 Jan 2020 01:35:58 GMT

I can't speak much about the clearance, I am aware of them as my ex had one. It would seem with scores in the 400's and over the debt limit now that your situation would improve with a bankruptcy. Is there anyone you can confide in that can give you more definitive answers? If your only issue is having to explain what happened then that seems reasonable.

I also incurred my debt from my ex, also abusive. He blew up our lives with cheating and drinking, it was hell. We made great money but boy he ran up the debt fast, fought the divorce which made it more expensive. I tried for two years to pay it back but the interest made it impossible, I could make payments but no progress and no room for life.

I was just discharged December 11th. It's been a huge relief and I wish I did it two years ago. That debt was from him, it's not who I am, I don't overspend and I'm smart with my money. The bankruptcy gave me a fresh start on my new life, I already have savings and a bright year ahead of me.

Once I accepted I need to file, I found the whole process to be easy. Especially compared to getting away and divorcing my ex. If you can do that too, then bankruptcy is a walk in the park, don't be scared or ashamed.

Don't stress on the new house, that can totally still happen! Google about bankruptcy and mortgages, there's a mortgage expert on these forums too. Lenders have mandatory waiting periods from the date of discharge, worse case is a chapter 7 that has a 2 year wait for FHA or VA loans, 3 for USDA loans and 4 for conventional loans. That's great news! It'll give you time to rebuild your credit and save for a down payment.

Hang in there, you've been through a lot and you've got this part too! It's uphill from here.

Re: Should I file for bankruptcy

Anonymous — Sun, 05 Jan 2020 02:01:14 GMT

Thanks for your reply, I am so lost, I moved to a new city for work which was a big mistake because my life got worse because it's more expensive here. I use to be an investigator I know about the clearance process. This situation have me feeling stuck, I do not want to stay in this city because it's too expensive, try looking for another government job ugh I would be taking a 50/50 chance at this point, I can make it through the interview and not the investigation process because of finances. I am thinking about taking the chance. I can transfer my job closer to home and try to live with family but they don't live like I do and might not be the best idea for my mental health. The next thing is will I be able to get a place in my name if I move. I was paying the credit cards on time and had a handle on things but I let this man a his promises to pay me back drag me all the way down. I kept letting him run up my card, just being stupid. I have my car loan with NFC I want to keep that, I am hoping I get a decent tax return to get back current on my USAA card since it's less than $2k. I have to pay my sister back some money I owe her too. How muh does filing for bankruptcy cost? Thanks for your response again.

Re: Should I file for bankruptcy

Harriet — Sun, 05 Jan 2020 02:36:24 GMT

You’re welcome. I’m also stuck where I don’t want to be because of my finances. It was hard to accept and trying to fix things instead of just filing cost me more time. At least with my bankruptcy I am more in control and can make plans instead of worrying and hoping it’ll get better. I have savings again and a plan in action so I’ll be ready to buy with no issues.

I’m in the Midwest near a large city and paid 999$ for my chapter 7. My lawyer had many great reviews and ran his office like a well oiled machine. From what I’ve seen here 1000$ is pretty low. 2000$ seems more average but it can vary between lawyers.

Start your research now and maybe even get a few free consultations. Do this before you spend your tax refund.

Be careful paying on your cc, payments higher than 650$ looks like “preferential treatment” between your creditors and may delay a filing or cause problems. Your tax return could go towards your sister paying your lawyer in full to get things started.

What about a new job but not living with family? You could always apply but don’t tell anyone at your current job unless you're hired. Sounds like a win win.

I know these things are tough but it’s all fixable. Don’t feel dumb or be too hard on yourself. Bad things happen just do your best to learn from it all. Also look into support groups. If alcohol was involved, al anon is a great resource. Educating myself on personality disorders, red flags in relationships and narcissism was eye opening as my ex ticked the box on so many things. I found great comfort and strength being around others that shared my experiences. They last thing we want to do is pick another like we had.

Re: Should I file for bankruptcy

Anonymous — Sun, 05 Jan 2020 02:50:37 GMT

I thought about transferring my job and moving with family until I get back on my feet, my family is a mess sometimes peace of mind and debt is better than dealing with them. The thought gives me a headache. My lease is up in August, I need to have a plan on what I will do work wise and living situation. None of my issues are alcohol or drug related I met someone in college who had everything going for themselves but turned out to be a nut case. It's one of those situations where the signs was there but everyone made excuses for him and still are. He put his hands on his mom more than once and she dropped the charges. Thanks for suggesting a support group, I think that would help me. I need something to give me clarity. The good thing is I don't have a lot of lines of credit open. I hope NFC will let me keep my car if I decided to file. I am going to try to see if I can work something out with them first, if no results I will definitely file. I am learning a lot so far from this forum, I think I will be good, thanks again for your advice.

Re: Should I file for bankruptcy

FireMedic1 — Sun, 05 Jan 2020 18:34:40 GMT

Welcome @Anonymous Sorry about your situation. It can only get better now.

"Filing for bankruptcy relief will not automatically prohibit you from obtaining a security clearance. But whether you have a history of financial irresponsibility will be considered during the evaluation process. As a result, whether your bankruptcy will affect your security clearance typically will depend on the circumstances that led you to file for bankruptcy." In your case it may be ok. I'm no expert on clearances. but some reading material to see if it applies for you. Good luck!

https://www.nolo.com/legal-encyclopedia/will-bankruptcy-affect-my-military-security-clearance.html

Re: Should I file for bankruptcy

Anonymous — Sun, 05 Jan 2020 18:33:02 GMT

Hello thanks for your response the bankruptcy situation depends on the agency because I use to do the job. The federal government doesn't like bankruptcy they prefer criminals. Bankruptcy will never get downgraded lower than a C level issue at anything. It can be 100 years later it will always be a C level issue, C level issue is an automatic flag that will cause you to have to speak to an investigator every time even in clearances that are very minimal i.e public trust. In addition the federal government prefers Chapter 13 over 7. I know you might not be interested in this but just in case someone else might read it. The debt threshold without a flag being raised in $20k. It used to be $7k . Again some agencies like the Department of Justice run your credit when you submit your application, you will not be considered for an interview if you have anything negative on your credit report. That's why I am so confused as to what to do, either way my clearance is in jeopardy at this point. I have my car loan with NFC which I would like to keep my car. It's hard when your job depends on your credit worthiness. Would filing for bankruptcy make them want to take my car too since I can't pay back the credit card? Thanks for your comment this forum is a great place, I am learing a lot.

Re: Should I file for bankruptcy

FireMedic1 — Sun, 05 Jan 2020 18:46:34 GMT

You could check this thread out on some posters with NFCU and their auto in BK.

https://ficoforums.myfico.com/t5/Bankruptcy/NFCU-and-Reaffirmed-Vehicle/td-p/5494494

Re: Should I file for bankruptcy

Anonymous — Sun, 05 Jan 2020 19:55:23 GMT

Thank you so much for the information.

Re: Should I file for bankruptcy

Azuieldrago — Tue, 07 Jan 2020 19:12:10 GMT

Either way you are damned. Damned if you do and damned if you don't. You file, you get released of all the debt but risk your job. You don't file, you can potentially be sued for missed payments and still risk your job. I have a security clearance as well. Hate it. Don't want it. I am no longer a government employee so for me, I didn't care. My bosses did eventually find out about my debt and threatened my job if it wasn't handled. I see a couple of options, file and risk your job but be debt free. Don't file and risk your job anyways and still have all that debt and no job. Take on a second job if possible. Find a roommate. Deal with family drama for a yr. and cut living expenses. Two things will happen no matter what, either the debt gets too deep and it starts reporting on your report which they will find eventually, gotta love early credit pulls or the creditors will call your bosses. You are walking on a sword. You will be cut either way. Just have to find a way to get cut the least. If you are buried with debt but are making it, your best bet maybe to fight through it and find ways to make more and save as much as you can to pay them down. If you are so deep that you cannot stay current, your only option is to file.

Re: Should I file for bankruptcy

Azuieldrago — Tue, 07 Jan 2020 19:29:31 GMT

If you absolutely need to stay away from bankruptcy, My plan would be this. Minimize every debt you can. Cut as many expenses as you can. If you get a decently sized tax return, do not pay your sister back just yet.

Use your return to pay off the $5k. If it pays it off completely, use the remainder on the $1.5k. If not, finish wiping out the $5k one. Once that one is paid off, wipe out the $1.5K. If you minimized and cut expenses as much as you can. And I mean cut. Discount, off brand groceries. No driving anywhere except for work. Literally no social life. All that money saved now can put on the higher card. And start working on that down. Make yourself a budget. And stick to it. No rewards, no fun stuff. It will suck some serious ass. You will need to be the biggest Scrooge McDuck ever. Pay that card down. As you wipe those cards out, that extra money no gets put on the next card.

The only option is file BK. And mine cost me $2k.

Re: Should I file for bankruptcy

Harriet — Tue, 07 Jan 2020 21:52:06 GMT

Can you get a roommate for extra income?

Re: Should I file for bankruptcy

Anonymous — Wed, 08 Jan 2020 01:00:38 GMT

Sadly that money is already gone before I even spend it, I need to catch up on some other bills that I am behind on. My tax return is not that much either.

Re: Should I file for bankruptcy

Anonymous — Thu, 09 Jan 2020 03:51:06 GMT

My lease isn't up until August, hopefully after August I can fix my living arrangement to save some money.

Re: Should I file for bankruptcy

Ontime1010 — Mon, 13 Jan 2020 06:05:17 GMT

Sorry to hear you’ve hit some tough times. I filed ch13 back in ‘14 and reported everything to my security office as it was happening. They reported it up the channels and that was that. I was sweating bullets a couple years ago when my investigation was due but I cleared that too. I don’t think I’ll ever be hired at one of the 3 letter agencies but I guess the DoD is ok with it. From my understanding the government would rather see a person do something like a bk than see a history of lates and collections.

For reference my ch13 cost me $1800 up front and about 3k in lawyer fees throughout the plan.

Good luck and I’m glad you got out of that bad situation you were in.