topic Re: Bankruptcy questions? in Bankruptcy

Authorized user to rebuild?

Anonymous — Thu, 30 Jul 2020 16:11:06 GMT

after bankruptcy, can just being an authorized user an several credit cards help to begin restoring your credit or do u need to have your own accounts?

Bankruptcy questions?

Anonymous — Tue, 28 Jul 2020 04:35:04 GMT

Hi all,

I am currently living in the state of Florida and considering bankruptcy. I am only recieving disability income and most of my debt is credit card debt. How much will it cost me to file for bankruptcy? Also i have a few credit cards i have zero balance on and have always kept in good standing. Once i file for bankruptcy will i lose those credit cards also?

Re: Bankruptcy questions?

OmarGB9 — Tue, 28 Jul 2020 08:02:47 GMT

Not sure about cost, best bet would be to contact an attorney and get help with that. As for your good standing cards, yes, more thank likely they will all unfortunately close down on you.

Bankruptcy, authorized user?

Anonymous — Tue, 28 Jul 2020 14:04:17 GMT

Hi all,

If I declare bankruptcy, once discharged will I be able to be an authorized user on a family members or friends credit card?

Re: Bankruptcy, authorized user?

DebtStinks — Tue, 28 Jul 2020 14:23:21 GMT

Yes. There's nothing preventing you from being an AU prior to, during, or after discharge since AU's have no liability for any debt incurred on these accounts.

Hope this helps! Good look in your credit journey going forward!

Re: Bankruptcy questions?

Anonymous — Tue, 28 Jul 2020 14:24:50 GMT

The ones that are in good standing, should I just close them myself before declaring?

Re: Bankruptcy questions?

DebtStinks — Tue, 28 Jul 2020 14:30:07 GMT

I'd personally, if i were you, check around for pro bono services or legal aid to assist in your BK filing considering you're on and receiving only disability income. You might even be able to get a waiver of the filing fee with the court system.

Regarding your credit cards that have $0.00 balance and good standing, I'd recommend closing those prior to your filing date. If not, your creditors will get the notice of filing and you might end up with the "included in bankruptcy" notation on each of those tradelines listed on your credit reports...which would be no different that actually owing them money and filing on them. I learned this the hard way on a couple cards.

Also, as you might have already been told if speaking to an attorney, I'd recommend NOT taking any cash advances on cards or making any large (non grocery/utility bill, etc) transactions on any cards you're filing on OR making any "preferential" payments to creditors in which you don't file on...typically, the period the courts look for on items like this is the preceding 90 days to file date.

If you have any more questions, feel free to ask away as there are a plethora of knowledgeable individuals on this forum and we're all here to help each other!

Hope this helps and best of luck!

Re: Bankruptcy, authorized user?

Anonymous — Wed, 29 Jul 2020 03:43:49 GMT

That’s correct nothing stopping you.

Re: Bankruptcy questions?

Anonymous — Wed, 29 Jul 2020 04:43:12 GMT

I also wonder, if your only source of income is disability, you may be judgment proof. What are you hoping to acheive by filing bankruptcy? Do you have an asset that you're trying to protect? If not, and you are judgment proof, why not just save the money and not file?

Re: Bankruptcy questions?

Anonymous — Wed, 29 Jul 2020 09:55:59 GMT

I have to be honest I wasn't sure if i should consider this as opposed to bankruptcy. If i am correct with bankruptcy u get a clean swipe and start over eventually. You have to deal with the bankruptcy on your report for a few years but then should be ok after that. I have even heard in some cases u can get a credit card again after a year or two .If i just choose not to pay my creditors, don't i have to deal with the harrasing phone calls and also have to wait at least 7 years for all these items to be removed from my credit file. If anyone else can chime in i would appreciate it.

Re: Bankruptcy questions?

DebtStinks — Wed, 29 Jul 2020 18:43:52 GMT

Yes, most of what you just stated is correct. The only thing I would view differently is actually (depending on your viewpoint) to your benefit. You can, with advice of many of us on here, get credit once you file your petition as the automatic stay is in place that minute and once your creditors receive the notice of filing, all communication from them DIRECTLY to you is prohibited...assuming you're granted a discharge.

Now, although some/most attorneys would tell you that you can get credit once you have your Case # and it's filed, etc, I personally would recommend waiting until you receive your discharge...just because is something happens and it all doesn't go as planned, you won't have created another messy situation.

There are many posts regarding "BK to 700 score in 24 months" etc on here and the internet. YMMW, but as a general rule, it's actually quite easy to rebuild post CH7 BK.

Now, as another member mentioned, you very well might be judgment proof being on disbability income. I will say this and I'll paint a picture for you...

You decide to NOT file CH7 BK (since being judgment proof) and also stop paying your creditor(s). A creditor (or all of them) file a lawsuit against you as a result and get a judgment. Yes, they can still get a judgment if you're "judgment proof" only because judgment proof only means they can't collect on said judgment while you prove that you don't have anything for them to take becuase you're protected under certain circumstances (i.e. only disability income of $800, etc)...

Now let's fast foward, for example, 6 years...you have a judgment (or numerous) against you and the creditor(s) decide to renew said judgment(s) which is typically done around the 5 year mark. This now renews their "collectable" period. Creditors will often do this even if they know their debtor is "judgment proof" at the time because, like all things in life, most don't last forever. What they're counting on in this scenario is for you to, at some point in time, become no longer judgment proof. If so, now they can garnish, levy, seize, etc all they want. (to the legal extent) In addition to this scenario playing out, yes, you would have to deal with the phone calls, letters, continued negative credit reporting, potentail "zombie debt", etc. Even with this last part, there are ways around it where you can send in a "cease and desist" letter to each creditor which means they can ONLY contact you via mail/process server to tell you that you're being sued...being sued doesn't mean they get money...keep this in mind. It's only part of the formal process in an attempt to get your money since there are only a few scenarios where you don't have to be sued to have your money/property taken, etc. The two that first come to mind and most common are taxes and child support.

Anyway, enough of my rambling. I hope I've shed some light onto your situation and made your decision a bit easier. Feel free to ask more questions if you have them, If, however, they're directed specifically toward me, just tag me in the post so I'll see it sooner rather than later.

Best of luck!

Re: Bankruptcy questions?

Anonymous — Wed, 29 Jul 2020 21:01:22 GMT

I agree with all of the above. If it were me, I would probably file using a no-cost or low-cost bankruptcy attorney/group like Legal Aid so as to not deal with it. There are still fees involved. Of course, the downside with filing now is that you may be limited in filing again should your circumstances change, submit as if you incur a significant medical expense.

I mainly wanted to make sure you were aware that you may be able to avoid (or postpone) bankruptcy if you are currently judgment proof.

Re: Bankruptcy questions?

Anonymous — Wed, 29 Jul 2020 21:10:53 GMT

I appreciate both points of view. Does it matter if I decide to file now while my debts are all current or can I wait a while and use the money I am saving to pay off certain creditors I don't wish to burn. I am thinking of stop paying everyone else and taking the money I am saving and paying off discover and chase and then closing right before I file. I would really like to try avoid burning them.

Re: Bankruptcy questions?

DebtStinks — Wed, 29 Jul 2020 22:04:37 GMT

You could choose to do that, but I'd recommend against it based on these factors:

#1 - As of right now, it's currently Chase policy to NOT issue unsecured (credit card) credit to an individual that has a BK reporting. It doesn't matter if it's 9 yrs old. If it's on your bureau they pull = instant denial, no recon.

#2 - Discover has a large portion of their accounts bought by a third party (even while current/brand new) so they have a fickle underwriting system that will sometimes deny an individual who had a flawless history on their Discover card, didn't file on them or cause Discover a loss, but still has a Bk...

and then some who burn Discover and get back in within a year or two.

#3 - If you have more than a couple hundred dollars in the bank, it's likely the trustee will make you surrender it and distribute it amongst all your creditors being burned, so saving doesn't really accomplish anything, and if you pay any creditor above $600 (I believe) in the 90 days predceding filing, it can be considered preferential treatment.

Point being, I commend you trying to salvage your relationship with these two particular creditors, but I think it would be putting "good money after bad."

Again, as always, I hope this helps!

Re: Bankruptcy questions?

Anonymous — Wed, 29 Jul 2020 23:53:27 GMT

Really appreciate this info. This is really stressful, I don't want to burn anyone it just seems I will never get out of this mess.

Re: Bankruptcy questions?

DebtStinks — Thu, 30 Jul 2020 01:44:27 GMT

That was the feeling I had a little over 3 years ago. I will say this...once I finally "pulled the trigger" and filed, I never looked back. I have zero regrets about filing. Obviously, we are good people at heart (it's human nature) and don't want to cause harm or loss to another individual or lending institution. The bankruptcy code, however, was created for good people who fall on hard times and need a "reset" button.

I'd recommend doing what you think will help you sleep better at night. Many don't realize that the stress of debt can harm a lot more than a person's bank account...it takes a toll on your health. What's more important? Your overall health or a few bucks to a conglomerate credit card company?

You owe yourself this: Refuse to lose sleep over this while you're weighing your options. Tell yourself this: "I will do what I feel is best for my situation and circumstances and what will ultimately benefit me most in both the short and long term."

Re: Bankruptcy questions?

Anonymous — Thu, 30 Jul 2020 06:45:30 GMT

Maybe this is a bit personal but have u been able to get back in with any of the creditors u have burned and or how long did it take to start establishing credit after your duscharge?

Re: Bankruptcy, authorized user?

Anonymous — Thu, 30 Jul 2020 07:44:06 GMT

Does it help or dies it matter at all?

Re: Bankruptcy questions?

DebtStinks — Thu, 30 Jul 2020 14:57:33 GMT

Yes, I got back in with Capital One literally the day after my BK7 discharged. They are the only creditor I burned and tried to get credit with post-BK. They do have a 12-month rule before granting credit again after either charge off or BK, whichever happend first. I was able to get back in the day after discharge since my account with them charged off more than 12 months prior to my BK7 discharge.

I know you're hesitant, and it IS a big step/decision. Don't just take my word. Ask around these forums. My guess is the majority of people who filed CH7 will tell you they have ZERO regret about filing.

Re: Bankruptcy questions?

Anonymous — Thu, 30 Jul 2020 15:55:12 GMT

Yeah, I have always read declaring bankruptcy is something u just don't do, yet it is becoming more common I see. Also everyone mentions how they are able to breathe again. I keep trying to convince myself I don't need to yet I know it will take me so many years to get out of debt and until then every month I will basically be broke.