topic Re: To file or not to file--advice appreciated in Bankruptcy

To file or not to file--advice appreciated

bellrock190 — Sat, 30 Oct 2021 11:31:18 GMT

This is a post I know I should have written months ago--I obviously made several errors of judgement, and then stuck my head in the sand about it. Having said that, I am where I am and "it is what it is", but from where I am right now, I need to formulate a plan-any help from the group vets would be appreciated.

I will try to make a long story as short as possible:

This is not my first rodeo with credit, so clearly there are behavioral patterns at play that I need to deal with. Hopefully this painful bottom will be my last. From 2010-2019 I lived overseas and did not maintain US credit cards or lines of credit. Upon moving back in 2019, I had a thin file, and began the process of rebuilding my credit. Since 2019, I have held a W-2 job, earning over $200,000. In addition, I am the co-Founder of a tech company, which has been bootstrapped and not generated one dollar of revenue for the past 3 years. A sizeable amount of my W-2 income as well as the credit cards and LOCs went to fund the start-up, as we kept thinking that investor funding was right around the corner--however that funding never materialized and I am now very seriously weighing my options to declare bankruptcy or see if there is a smarter path at this point.

Since 2019, I have opened the following accounts, with SLs;

Chase cc: 1,000

Discover cc: 1,500

Capital One cc: 4,500

DCU cc: 10,000

BBT cc: 8,000

Freedom Plus personal LOC: 40,000

Lending Point personal LOC: 20,000

That is $111,000 of unsecured debt.

Until this past August, I was able to keep up the payments, through a combination of my personal paycheck, plus using one line to pay the other. In addition, I was able to get covid-related payment deferments that helped me prop up the house of cards, until I couldn't.

Currently, all of the cards are maxed out, but I managed to keep up the minimums on all except the BBT cards and the $1,000 monthly payment on the FreedomPlus loan. BBT is reporting 60 days late, soon to be 90 days and FreedomPlus is the same--

So, without judgement (trust me, I have castigated myself over this enough already)--what is my best move here?

I believe that my income excludes me from Ch. 7, correct?

So is my only option Ch. 11? Or, does it make sense to contact the creditors that I'm late with-- BBT and Freedom Plus-and try to work out a settlement with them? Are there any reputable companies that can negotiate these loans down, create payment plans, etc?

Any help/advice here would be greatly appreciated--

Re: To file or not to file--advice appreciated

bellrock190 — Sat, 30 Oct 2021 13:28:47 GMT

I meant Ch. 13, not Ch. 11

Re: To file or not to file--advice appreciated

Shooting-For-800 — Sat, 30 Oct 2021 14:41:10 GMT

Will you be making $200k in the future?

Is any of your debt secured?

You can def negotiate your own settlements without BK or hiring a company.

If your income is or will come back to $200k, I would not do BK.

Re: To file or not to file--advice appreciated

bellrock190 — Sat, 30 Oct 2021 15:04:35 GMT

Shooting--thanks for your response.

To clarify, my current and foreseeable W-2 income is 200K+.There are business and other debts which are sucking a lot of that income, however.

In August, when my cards were maxed but not late, my credit was hovering in the low 600s--now that several lates have repoted, it's plummeted to the low 500s--

So, from a credit perspective, what is my best move to start movingthe score back up--

Should I negotiate directly with the creditors and should I try to settle with them?

I believe that some of the BBT cards might have alrady been charged off but not reported as such yet. What is my best approach if that has happened?

Re: To file or not to file--advice appreciated

FireMedic1 — Sat, 30 Oct 2021 16:48:11 GMT

We say finaces over FICO. Scores mean nothing right now. Your right your over the means test in any state. So I would contact a Chapt 13 lawyer and get the ball rolling quickly. If your co. hasnt taken off yet. Well whats left your other founder could buy you out. And call it done. The sooner you get this going the quicker it will be over. Dont put another penny into the company that appears it isnt going anywhere or to keep it afloat. Never to repeat it again. Sucks. But at least we have laws that gives us a refresh to start again. Im sure you wont go down this road again. Best of luck.

Re: To file or not to file--advice appreciated

gdale6 — Sun, 31 Oct 2021 13:51:38 GMT

Hi there OP, I have removed your cross post on this. Please refrain from doing so in the future as its confusing to the members and its not inline with our TOS. Thanks for your understanding.

Re: To file or not to file--advice appreciated

jmw1 — Sun, 31 Oct 2021 17:30:54 GMT

@bellrock190

At $200k income, you should be able to service the minimum payment on all of these debts and still eat, put a roof over your head, etc. I'm not saying don't file bankruptcy. But you need to address the personal finance issues too. Chapter 13 is a great way to force you to address those issues. The trustee will want every last dime of disposable income to go to your creditors. The trustee may disagree with you regarding what are allowed and legitimate expenses and the size of those expenses. If I'm taking a rough guess, you are paying 100% of this debt back in a 13 unless there is other debt you didn't tell us about such as an auto loan or mortgage. You won't pay interest, but you will pay the trustee fee and your lawyer fees. Your debt will stop growing like weeds the sooner you do the 13.

There is a possiblity of doing a 7 if you can show that half of your total debt was for business because you are exempt from the means test. That doesn't mean the trustee won't try to show that your filing is abusive and you should be in a 13 anyway. At $200k income, they will do everything to kick you to a 13.

I'd line up some initial free consultations with a couple of local bankruptcy attorneys. You have a somewhat complicated case so you don't want firms that do hundreds of bankruptcies a month.

Re: To file or not to file--advice appreciated

bellrock190 — Tue, 02 Nov 2021 02:47:08 GMT

Jmw- thank you for your thoughtful response. Seems like looking into Ch 13 asap is my best bet