Chapter 7 or Just pay it

Anonymous · ‎07-03-2018

Hello all new to the forum and had some questions about my next decision with regards to my credit. I have about $55K in debt which includes credit cards, student loans, and a repossessed vehicle. I wanted to file Ch 7 and just start over, but was told to just pay it off and go from there? I am not sure which would be the best route. Even if I devote the next year to paying off cards, how long before I can reapply?

3 Cap Ones $2500

Discover It Secured $1300

2 First Prem $1200

First Savings CC $500

Wells Fargo $800

Comenity Cards $3500

Nissan $17K

Random hospital balances (no insurance)

the rest is student loans and that balance is still changing (current student)

Single momma who wants to buy a house!

Anonymous · ‎07-03-2018

I'm not too knowledgable so I'll let others give you advice but I'll say this....I filed and it was one of the best decisions I have made in my life. My husband and I had seperated and I went from splitting bills down the middle to being responsible for them all after he moved out. I couldnt stay afloat. My credit was in the high 700's when I filed but I was barely making it by. All of my money went to bills and had no money to save or for family entertainment. I was stressed out and on the verge of having a mental breakdown. I started reading about bankruptcy, went and met with a lawyer who explained to me that I wasnt a bad person for doing it, it didnt mean I wasnt responsible but I had to do what was best for me and I did. I dont regret it, AT ALL.

Anonymous · ‎07-03-2018

@Anonymous wrote:
Hello all new to the forum and had some questions about my next decision with regards to my credit. I have about $55K in debt which includes credit cards, student loans, and a repossessed vehicle. I wanted to file Ch 7 and just start over, but was told to just pay it off and go from there? I am not sure which would be the best route. Even if I devote the next year to paying off cards, how long before I can reapply?

3 Cap Ones $2500
Discover It Secured $1300
2 First Prem $1200
First Savings CC $500
Wells Fargo $800
Comenity Cards $3500
Nissan $17K
Random hospital balances (no insurance)
the rest is student loans and that balance is still changing (current student)

Single momma who wants to buy a house!

If you're able to pay everything off within a year, pay it off.

If you see yourself unable to pay file the bankruptcy.

I wish i would've filed my bankruptcy earlier, instead of trying to settle all of my accounts.

However...I had 110k in dischargeable debt

Your student loans will not be discharged.

You have a relatively small amount of debt to credit cards.

Is the 17k the negative equity you had in the car? This is the final balance or this is before repossession?

I'm not sure what your income is but it would completely depend on your budget.

If your cards are already charged off you can start settling them to get them to update balances to 0 and medical collections can definitely be settled for pennies on the dollar.

Anonymous · ‎07-04-2018

Sounds Like me... going through a divorce currently and all my debt went to crap after I moved out. So it seems as though the better option would be to file Bankruptcy and Save. Thanks for the heads up

Anonymous · ‎07-04-2018

I see myself paying it off, but if it's better to just file bankruptcy then I would rather do that... so that I can just allocate those would be funds to my Savings.

The 17K is the final balance...

The CC's are charged off... if I just settle how long before I can reapply? I think it just makes sense to file.

Anonymous · ‎07-05-2018

@Anonymous wrote:
I see myself paying it off, but if it's better to just file bankruptcy then I would rather do that... so that I can just allocate those would be funds to my Savings.

The 17K is the final balance...

The CC's are charged off... if I just settle how long before I can reapply? I think it just makes sense to file.

Here's the thing.

Bankruptcy is a last resort. It's a clean slate to start over. I used it because i owed over $110k in dischargeable debt. I have no student loans so basically the Bankruptcy did give me a fresh start with $0 debt.

Your dischargeable debt excluding the medical bills are about $26k. Your income is double that.

You can realistically settle the $26k in debt for about $13k or less. I had settled some of my accounts for 20% of the original chargeoff amount. Paid chargeoffs and PFD look better than a Bankruptcy. Lenders like Amex forgive you if you repay them.

Yes my scores are decent and I have credit after bankruptcy, but i can't get any real prime cards like Chase or Amex for 5 years at least.

It's obviously your choice but if you file bankruptcy for $26k then you need to be careful because for the next 8 years you can be sued and not have bankruptcy protection like you do right now if you ever get yourself into a similar situation.

dragontears · ‎07-07-2018

Since no one else has mentioned it....
You said you were wanting to buy a house, if you file for bk you are not eligible for most home loans until 2 years after discharge

Anonymous · ‎07-08-2018

What is your income like?

What are your expenses like on a monthly basis? At least in general terms e.g.

Housing

Utilities

Food

Personal/Household

Transportation (list car loans separately)

Health/Medical

Clothing

Children

Anything Else (list separately)

or categorize how makes sense for you, but just throw something together and let us know. It's hard to know whether you make a good candidate for BK just based on the debt level alone. If you're only making $20k/year, that tells a different story than if you're making $90k/year. Or if you are in a degree program with good job prospects vs. little prospect of advancement. Or high vs. low expenses. Etc . . .

Anonymous · ‎07-08-2018

"It's obviously your choice but if you file bankruptcy for $26k then you need to be careful because for the next 8 years you can be sued and not have bankruptcy protection like you do right now if you ever get yourself into a similar situation"

Help me understand what this means?

Anonymous · ‎07-08-2018

Correction on the debt owed, its about $87K, I am not sure what I missed but I clearly I missed something

Income is about $30K

Current Debt is about $2800 per month