topic Re: How aggressive will collections get (credit cards)? in Bankruptcy

My bankruptcy journey begins...

masscredit — Fri, 22 Jan 2021 22:25:38 GMT

I've decided chapter 7 bankruptcy will be the best way for me to get out from under a pile of debt that I'm having a hard time paying. I haven't missed any payments and will try to continue to do that up until I file. Worst case, they will all be 29 days late. I'm hoping that will help my rebuild when this is over. Maybe I'll start off with a higher score with just the BK over having the BK and a bunch of late payments (thoughts?).

I have a couple of cards that won't be included in the BK. They have zero balances. I plan to cancel them before I file. One of those cards is with DCU which is my main bank. They also have my auto loan which I plan to reaffirm. If for some reason I can't reaffirm, I'll just continue to pay it. I have to research that. Anyone have experience with reaffirming with DCU?

I'm going to start searching for BK attornies in my area. I don't have any friends who I have filed so I feel like I'm searching blindly. Don't know how accurate Google reviews are so I'll wing it. What is the average cost to do this? I've been thinking about $1500.

I've been using my cards for living expenses and some purchases for Christmas in December so I'll probably have to wait until March to file.

This kind of sucks. Besides taking the hit on my credit, I'm going to lose a bunch of quality cards but it will be for the best. I'll have a fresh start when this is over.

Re: My bankruptcy journey begins...

Getty59 — Sat, 23 Jan 2021 06:58:04 GMT

$1500 sounds about right, when we filed they advised us to stop paying right after our initial meeting. Not sure if it was any worse or better for the rebuild. Getting a cc after discharge was easy enough as a matter of fact a month after we ended up getting a auto loan and a cc with Cap One and the I have worked to get the CL up to 9+k also just got a CC with NFCU for 23K. I haven't tried to get any other cards as I don't really need them but all I can say is after we filed life got a lot easier. We managed to keep our house which has to be a blessing because we are swimming in equity and we don't spend what we can't pay in full. As far as the attorney goes lol we used Google reviews to find ours and it worked out okay. With the reaffirmimg the loan I gotta figure they don't wanna have to rep, clean, market and try to sell the used car so they most likley will work with you on it. Gl and welcome to a new beginning!

Re: My bankruptcy journey begins...

youngins — Tue, 26 Jan 2021 04:00:02 GMT

Hello

Literally days or so after you file, any open revovling credit accounts you may of had will automatically close. They are very efficient in doing so. All payment history disappears. The only way for payment history to reappear is to reaffirm the debt.

Having just gone through this myself, I recommend you have chat with your attorney regarding your strategy. The bankruptcy court can (and usually will) get all in your business - especially for Chapter 7. While there are many caveats, you basically need to be to demonstrate that you have very little left over after paying priority debt (student loans, alimony, child support), or debt for exempt property (i.e. car).

Also, be aware of the the lookback period. Themay ask for deposti account statements going back 6 months. They will want to know if any creditor has been paid more than $1000 in the lookback period, or if any preferrential payments have been made.

Re: My bankruptcy journey begins...

masscredit — Thu, 28 Jan 2021 02:05:23 GMT

Capital One will be one of the cards that gets burned. Actually, there will be 4 including Walmart which is theirs. I've read they are forgiving so I may be able to get back in with them after this is over. I owe about $20K on the auto loan. I just checked to see what it is worth. It's close. Just a little upside down. I have a second car which is a Hyundai with 115K miles. It's worth about $6000. The vehicle exemption in my state is $7500 so I think I'll be good with these.

I'm going to guess it probably doesn't matter if I close the credit cards that won't be included in the BK or let them be closed after I file. I think I'll feel better if I contact my back just before I file to tell them what I am doing and that I want to close the card. I'd like to maintain a good relationship with them (especailly with them having my auto loan). This has got me thinking. My DCU card has a $200 balance ($5000 limit). If the card has a balance when I file, what would be limit be if I reaffirm it? Would they keep me at $5K when it's over?

At this point, I've been paying all of my cards so none of them have recieved preferrential treatment. I'm almost out of money so I can't keep this up. I've been using money that I have saved. Monthly bills definately exceed my income. I'll be looking for an attorney soon.

One thing that I wasn't thinking about is all of the auto-pays I have set up for bills. I've been making a list of all of them. Some are being declined because the cards they are attached to are at the limit. The only things I've been using the cards for now are food, utiliteis and gas. From what I've read, that is allowed. Is that correct?

Re: My bankruptcy journey begins...

Anonymous — Thu, 28 Jan 2021 10:55:03 GMT

Sorry to hear this OP, it has to be stressful. I'd ask @despritfreya for advice on this one - their past posts in this subforum have been very well-informed and can likely help you out.

Re: My bankruptcy journey begins...

dragontears — Thu, 28 Jan 2021 11:01:11 GMT

@masscredit wrote:
Capital One will be one of the cards that gets burned. Actually, there will be 4 including Walmart which is theirs. I've read they are forgiving so I may be able to get back in with them after this is over. I owe about $20K on the auto loan. I just checked to see what it is worth. It's close. Just a little upside down. I have a second car which is a Hyundai with 115K miles. It's worth about $6000. The vehicle exemption in my state is $7500 so I think I'll be good with these.

I'm going to guess it probably doesn't matter if I close the credit cards that won't be included in the BK or let them be closed after I file. I think I'll feel better if I contact my back just before I file to tell them what I am doing and that I want to close the card. I'd like to maintain a good relationship with them (especailly with them having my auto loan). This has got me thinking. My DCU card has a $200 balance ($5000 limit). If the card has a balance when I file, what would be limit be if I reaffirm it? Would they keep me at $5K when it's over?

At this point, I've been paying all of my cards so none of them have recieved preferrential treatment. I'm almost out of money so I can't keep this up. I've been using money that I have saved. Monthly bills definately exceed my income. I'll be looking for an attorney soon.

One thing that I wasn't thinking about is all of the auto-pays I have set up for bills. I've been making a list of all of them. Some are being declined because the cards they are attached to are at the limit. The only things I've been using the cards for now are food, utiliteis and gas. From what I've read, that is allowed. Is that correct?

I could be wrong but you can't reaffirm a credit card. All unsecured debt is included you don't get to pick which cards you want to keep.

Re: My bankruptcy journey begins...

angelofmusic86 — Thu, 28 Jan 2021 15:56:06 GMT

@dragontears wrote:
@masscredit wrote:
Capital One will be one of the cards that gets burned. Actually, there will be 4 including Walmart which is theirs. I've read they are forgiving so I may be able to get back in with them after this is over. I owe about $20K on the auto loan. I just checked to see what it is worth. It's close. Just a little upside down. I have a second car which is a Hyundai with 115K miles. It's worth about $6000. The vehicle exemption in my state is $7500 so I think I'll be good with these.

I'm going to guess it probably doesn't matter if I close the credit cards that won't be included in the BK or let them be closed after I file. I think I'll feel better if I contact my back just before I file to tell them what I am doing and that I want to close the card. I'd like to maintain a good relationship with them (especailly with them having my auto loan). This has got me thinking. My DCU card has a $200 balance ($5000 limit). If the card has a balance when I file, what would be limit be if I reaffirm it? Would they keep me at $5K when it's over?

At this point, I've been paying all of my cards so none of them have recieved preferrential treatment. I'm almost out of money so I can't keep this up. I've been using money that I have saved. Monthly bills definately exceed my income. I'll be looking for an attorney soon.

One thing that I wasn't thinking about is all of the auto-pays I have set up for bills. I've been making a list of all of them. Some are being declined because the cards they are attached to are at the limit. The only things I've been using the cards for now are food, utiliteis and gas. From what I've read, that is allowed. Is that correct?
I could be wrong but you can't reaffirm a credit card. All unsecured debt is included you don't get to pick which cards you want to keep.

This.

Also, I remember my attorney asking if I closed any accounts (I can't remember if he was talking about checking or credit) within a year(?) of filing. So I definitely would recommend checking with your attorney, but honestly, IMO (and it is only my opinion) that it would help to close any cards that you're at zero balance before filing that way they do not have "included in banktruptcy" on their internal records and that might help getting back in with them later on. But that is once again, my opinion. Commenity decided to mark ALL my accounts with them as "included in banktruptcy" even the ones THEY closed 12-24 months prior to filing with a zero balance, so there's that too.

Re: My bankruptcy journey begins...

anniea4001 — Thu, 28 Jan 2021 17:29:16 GMT

@masscredit

I paid $2800 for mine. So $1500 does not sound bad at all.

Thankfully my lawyer was so well prepared and covered all bases that on the creditors meeting I was barely asked a couple of questions.

I joined the conference call about half hour before it was my time just to get an idea of what the process was like and I was probably the only one there that had every single thing they asked for. Very thorough so no complains from me.

Re: My bankruptcy journey begins...

despritfreya — Fri, 29 Jan 2021 12:02:29 GMT

@Anonymous wrote:
. . . I'd ask @despritfreya for advice on this one - their past posts in this subforum have been very well-informed and can likely help you out.

Thank you for the complement.

I really don’t have much to add to the well reasoned comments already posted.

IMO, OP should not be worrying about what credit cards he/she will get to keep. Bankruptcy is done to get rid of debt. The thought of being able to get back into debt should not be a consideration. One rebuilds over time.

As to the use of credit cards for basic living between now and filing, I cannot condone this. Obtaining credit with the thought of discharging it in a bk is fraud. Having said that, one will do what one needs to do to survive.

The CU credit card is attached to the auto loan. The term is “cross collateralized”. The CU may or may not require that the card be reaffirmed along with the vehicle. My experience is that the reaffirmation paperwork Credit Unions send rarely include debt other than the vehicle. In OP’s case the balance on the credit card is minimal therefore, even if he/she is required to reaffirm it, such should not be a big deal. OP- Stay current on the vehicle loan.

OP - it sounds like your case will be pretty smooth. Don’t overthink things and, if you have questions, talk to your attny. That is why you hired him/her. Best of luck.

Des.

Re: My bankruptcy journey begins...

masscredit — Sat, 30 Jan 2021 02:04:27 GMT

Thanks for all of the info! I was thinking in the wrong direction when I read something about reaffirming credit card debt. I should have known that isn't done unless it's cross collateralized. I think I'll be moving my banking to another bank I do business with until the BK is discharged. That is a bank I don't have any loans with.

I guess the one question that I'm searching for an answer for is if it is best to keep paying my cards until the attorney files? I know the one I go with will probably tell me to stop paying them. But I'm looking at recovery on the other side. As I've been doing research I've found that people are excited when their baddies fall off after 7 years. Do rebuilding scores start out higher without the late payments. I'm not looking to get back into having debt after this is over but we all want to rebuild. And if it is benefical, I have to decide if it's financally worth it for me to keep trying to pay. I'm getting buried now.

Re: My bankruptcy journey begins...

angelofmusic86 — Tue, 02 Feb 2021 15:48:50 GMT

@masscredit wrote:
Thanks for all of the info! I was thinking in the wrong direction when I read something about reaffirming credit card debt. I should have known that isn't done unless it's cross collateralized. I think I'll be moving my banking to another bank I do business with until the BK is discharged. That is a bank I don't have any loans with.

I guess the one question that I'm searching for an answer for is if it is best to keep paying my cards until the attorney files? I know the one I go with will probably tell me to stop paying them. But I'm looking at recovery on the other side. As I've been doing research I've found that people are excited when their baddies fall off after 7 years. Do rebuilding scores start out higher without the late payments. I'm not looking to get back into having debt after this is over but we all want to rebuild. And if it is benefical, I have to decide if it's financally worth it for me to keep trying to pay. I'm getting buried now.

I stopped paying about a year before filing (though, I meant to file earlier, but I was hospitalized and took some time after that to recover), and I've had an ok rebuild a few months out so far. I've seen some people have mildly better success because they kept paying until filing, but YMMV.

Re: My bankruptcy journey begins...

masscredit — Wed, 03 Feb 2021 03:30:44 GMT

@angelofmusic86 wrote:
@masscredit wrote:
Thanks for all of the info! I was thinking in the wrong direction when I read something about reaffirming credit card debt. I should have known that isn't done unless it's cross collateralized. I think I'll be moving my banking to another bank I do business with until the BK is discharged. That is a bank I don't have any loans with.

I guess the one question that I'm searching for an answer for is if it is best to keep paying my cards until the attorney files? I know the one I go with will probably tell me to stop paying them. But I'm looking at recovery on the other side. As I've been doing research I've found that people are excited when their baddies fall off after 7 years. Do rebuilding scores start out higher without the late payments. I'm not looking to get back into having debt after this is over but we all want to rebuild. And if it is benefical, I have to decide if it's financally worth it for me to keep trying to pay. I'm getting buried now.
I stopped paying about a year before filing (though, I meant to file earlier, but I was hospitalized and took some time after that to recover), and I've had an ok rebuild a few months out so far. I've seen some people have mildly better success because they kept paying until filing, but YMMV.

I'm kind of torn with this. I've been trying to keep up with everything but don't know if I can continue until I file. I believe most people stop paying before filing and they are able to rebuild. And it might not be a high difference when it comes to scoring. Or will it? The final thing is all of the phone calls that come will come with missed payments. I guess I can set it to only ring for people in my contact list.

Re: My bankruptcy journey begins...

angelofmusic86 — Wed, 03 Feb 2021 16:22:36 GMT

@masscredit wrote:
@angelofmusic86 wrote:
@masscredit wrote:
Thanks for all of the info! I was thinking in the wrong direction when I read something about reaffirming credit card debt. I should have known that isn't done unless it's cross collateralized. I think I'll be moving my banking to another bank I do business with until the BK is discharged. That is a bank I don't have any loans with.

I guess the one question that I'm searching for an answer for is if it is best to keep paying my cards until the attorney files? I know the one I go with will probably tell me to stop paying them. But I'm looking at recovery on the other side. As I've been doing research I've found that people are excited when their baddies fall off after 7 years. Do rebuilding scores start out higher without the late payments. I'm not looking to get back into having debt after this is over but we all want to rebuild. And if it is benefical, I have to decide if it's financally worth it for me to keep trying to pay. I'm getting buried now.
I stopped paying about a year before filing (though, I meant to file earlier, but I was hospitalized and took some time after that to recover), and I've had an ok rebuild a few months out so far. I've seen some people have mildly better success because they kept paying until filing, but YMMV.
I'm kind of torn with this. I've been trying to keep up with everything but don't know if I can continue until I file. I believe most people stop paying before filing and they are able to rebuild. And it might not be a high difference when it comes to scoring. Or will it? The final thing is all of the phone calls that come will come with missed payments. I guess I can set it to only ring for people in my contact list.

Yeah, the phone calls were annoying, but I just had my phone on "do not disturb" except for contacts. I can't speak of the numbers on the comparison of scoring, but I'm at 3.5 months post discharge and already in the mid-600s.

Honestly, if you feel like you can't keep up, then stop paying. Remind me, when were you planning on filing?

Re: My bankruptcy journey begins...

masscredit — Wed, 03 Feb 2021 18:20:10 GMT

@angelofmusic86 wrote:
@masscredit wrote:
@angelofmusic86 wrote:
@masscredit wrote:
Thanks for all of the info! I was thinking in the wrong direction when I read something about reaffirming credit card debt. I should have known that isn't done unless it's cross collateralized. I think I'll be moving my banking to another bank I do business with until the BK is discharged. That is a bank I don't have any loans with.

I guess the one question that I'm searching for an answer for is if it is best to keep paying my cards until the attorney files? I know the one I go with will probably tell me to stop paying them. But I'm looking at recovery on the other side. As I've been doing research I've found that people are excited when their baddies fall off after 7 years. Do rebuilding scores start out higher without the late payments. I'm not looking to get back into having debt after this is over but we all want to rebuild. And if it is benefical, I have to decide if it's financally worth it for me to keep trying to pay. I'm getting buried now.
I stopped paying about a year before filing (though, I meant to file earlier, but I was hospitalized and took some time after that to recover), and I've had an ok rebuild a few months out so far. I've seen some people have mildly better success because they kept paying until filing, but YMMV.
I'm kind of torn with this. I've been trying to keep up with everything but don't know if I can continue until I file. I believe most people stop paying before filing and they are able to rebuild. And it might not be a high difference when it comes to scoring. Or will it? The final thing is all of the phone calls that come will come with missed payments. I guess I can set it to only ring for people in my contact list.
Yeah, the phone calls were annoying, but I just had my phone on "do not disturb" except for contacts. I can't speak of the numbers on the comparison of scoring, but I'm at 3.5 months post discharge and already in the mid-600s.

Honestly, if you feel like you can't keep up, then stop paying. Remind me, when were you planning on filing?

Most likely in April. I'm going to start searching for attorneys this weekend.

Re: My bankruptcy journey begins...

masscredit — Thu, 04 Feb 2021 04:09:32 GMT

I had two cards with payments due today. It's the first time I missed paying them. Kind of stressful and doesn't feel right in a way but I also feel some relief. I know it will get worst before it gets better. But this is the first step...

Re: My bankruptcy journey begins...

angelofmusic86 — Fri, 05 Feb 2021 02:17:31 GMT

So basically, you'll hit 30 days late in March and 60 days late in April. Better than where I was when I filed. I'm glad you're already feeling some relief.

Re: My bankruptcy journey begins...

masscredit — Sat, 06 Feb 2021 22:52:20 GMT

@angelofmusic86 wrote:
So basically, you'll hit 30 days late in March and 60 days late in April. Better than where I was when I filed. I'm glad you're already feeling some relief.

Is there a point when lates don't make any more impact on the scores? I'll have 14 cards that are at least 30/60 days late before I file. I know scores aren't a concern right now. Just wondering.

I've started to get emails that say "hey, your payment is late". Those are for the two Cap 1 payments that were due a few days ago. Those emails also said they are here to help if I'm struggling because of Covid. Should I contact them about that or just let it ride?

Re: My bankruptcy journey begins...

masscredit — Tue, 09 Feb 2021 23:16:28 GMT

I received new documents from Cap 1. They pretty much both say the same thing except for differtent amounts. Something I noticed is the amount past due is incorrect in both cases. For the one I'm looking at now, it says the amount past due is $652.00. That is wrong. The amount past due as of last week is $306.00. They added both months. Me thinking "it's the point of it" wants to contact them to correct their errors but it's not worth my time. They note that they are here to help if I need it because of Covid. The only way that will be benefial to me is if they all do that. I'm going to have a bunch of cards with late payments before I file.

I redid my budget to reflect normal living. Paying for everything with cash/debit card. Definately manageable now.

Talk to or avoid the credit card companies?

masscredit — Sun, 14 Feb 2021 19:50:16 GMT

I missed paying two cards the beginning of the month. They didn't waste any time with phone calls, emails and snail mail letters. I only hear calls from people in my contacts list so that will make life easier and I can ignore emails/letters. There are 12 more cards that I won't be paying this month so I think they will be contacting me constantly. Should I let them know I can't afford to pay or avoid them until I file in a couple of months?

Re: Talk to or avoid the credit card companies?

Mjhall85 — Sun, 14 Feb 2021 22:08:05 GMT

You can tell them you are going to file but until you file they will continue with calls and snail mail.Whether to avoid them or not is your call.Hopefully time goes by quick and you can file.