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Considering Bankruptcy and Need hard honest advice

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Azuieldrago
Frequent Contributor

Re: Considering Bankruptcy and Need hard honest advice

I have had creditors/collection agencies hit me with wage garnishments for debts less $2000. Had 3 of them stacked. As one was paid off, the next automatically went into effect. You may have gotten lucky, most are not. All my wage garnishments were legal. They proved debt and collected on it. What do you do when you have a wage garnishment hit without warning? Or when they stack up? If they have a legal right to collect that debt, they will. Sometimes quite harshly. They hear sob stories all day, the OPs will blend in with the rest of them. All they will do is try to collect. They don't care. If they are insolvent, best option is to make it legally preventable to recoup those debts. They can have up to almost a decade to collect depending on the state. They can wait until they can get blood from a turnip. So why wait for that. Weigh the options and consequences of a BK and make a decision. Why wait for them when they have the ball in their court.

 

At the end of the day, if they legally own the right to collect they will. They don't have to negotiate, they don't have to settle. The best option you can hope for that is consistant is you pleading your case at the judgement hearing and them siding with you. Why wait for them to collect, not rocking the boat on those who haven't reared their head yet (which could be yrs) and then have to spend yrs waiting for things to fall of your reports. Thats almost 15 yrs max for my state. 7yrs to collect and then 7 yrs for the derogs to fall of reports. Thats not including the 10 yrs they have to collect once they have a judgement (That can be renewed).  File BK, free yourself immediately that day of filing of all those burdens. No additional derogs, no collection efforts hounding, no stress. Everywhere Ive seen, the BK basically really no longer effects you after about 4-5 yrs except for perhaps the most prudish of creditors. 

 

So within the same 5 yr plan you have, They wiped out all their debt, minimized derogs and saved 1000s of dollars. 






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Message 21 of 35
Azuieldrago
Frequent Contributor

Re: Considering Bankruptcy and Need hard honest advice

People have different circumstance than you. My aunt is a certified accountant just as long as you and awesome with number crunching. Hates BKs as much as you. Before I filed, she basically told me she would disown me if I filed. We talked about it, gave her the numbers of all my debts and income, and she even agreed I needed to do a BK. Stuff happens. Just a point of interest, you are an accountant with 40 yrs of experience and yet you got yourself in debt. That very same debt that you accrued, you look down on others when they are looking for a job to better their lives and might be the life line they need to stay away from BK. Basically punishing them for the very same thing you did. Thats a high horse/soap box where you shouldn't be throwing rocks in a glasshouse.

 

You say that they can check their credit reports and see that they are prime BK candidates, well, what happens when they no longer are? THUMP!! That there is the sound of the other shoe dropping in the form of judgements and wage garnishments added in with destroyed credit reports.

 

Now I am not trying to be a naughty word, silly censors. Smiley Very Happy but in situations like this, a BK is the best option. Relief of debt, relief of stress and a quicker rebuild. If done properly, they can be in a better financial situation within 2 yrs. 

 

Sorry OP and others for my mini tirade. 






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Message 22 of 35
Phoenixupward
Regular Contributor

Re: Considering Bankruptcy and Need hard honest advice

👏👏👏👏👏👏👏.  I concur.  If anyone who has been working for 40 years without interruption and is in the field of accountancy and incurred debt issues I must shake my head in amazement    🤦‍♀️.    You are correct.  Judgements can be passed for less thank 2k and wage garnishments can occur.  Some people like to look at bankruptcy as financial leprosy through a selfish and myopic lens.   I get your tirade.  It's infuriating.  

Message 23 of 35
wa3more
Established Contributor

Re: Considering Bankruptcy and Need hard honest advice

As a hiring manager , this is the way i look at it . We tell people we will check their credit.Then they tell us the story about how their credit sucks and have a BK. Some have told me "i just got overextended, and file just to get it done ". Others will say I had medical issues ( which is most common reason for BK), divorced or lost job. OK , I like this story better. Then others who have lates, C/O's judgments that they settled and got another job/cut back on expenses and worked to satisy and settle debts. This last group i like best to hire.

 

The 3rd person above i hire in a heart beat, even with the bad credit. The first, who casually file, I pass. And yes , with the BK. i deny saying "they have bad credit" which is not against the law.

 

Maybe credit suck for about 3 years before i got above 700 doing this. There was a forum advocating what i described and I have personally seen dozens of people successfully do this. But like a said, not for every one, probably not the OP, who will go down the ch7 most likely.

 

Phoenix- why are you amazed about my circumstances regarding debt when you don't know the background ?? And how do you know it was 40 years without interruption ?? In 2009 , I lost a high paying job, got divorced, and had a business go under all in the same year ! Like millions of others. It was a depression. I saw many well educated business people lose everything, millions !. But I fought it out. And wow, it's not a tirade, just trying to give OP , and others, another option besides BK. Your acting like you path is only one. Jesus...

Message 24 of 35
Phoenixupward
Regular Contributor

Re: Considering Bankruptcy and Need hard honest advice

As you delineated in your soliloquy, there are many variables involved pertaining to one's financial decisions and the conditions that led to those decisions.  Life is a journey  and  as human beings we are here to be a testament to the precarious nature of life.   

Message 25 of 35
Anonymous
Not applicable

Re: Considering Bankruptcy and Need hard honest advice

Thank you all for the replies!
Life has a way of answering your questions. A couple of days after I posted this question I had to go to the E.R. and found out I had a tumor that needs to be removed. At the point it hit me that everything I'm stressing about including this debt isn't as nearly as big of a problem to me anymore. I'm almost 40, I have a family and students that I have to be here for.

So that pushed me to make the final decision to file unless I win the powerball lottery tonight LOL!
Although I'm still current on all of my accounts with no late payments I'm still going to file. I'm just preparing my paperwork and I'm also going to try to include my student loans as well. I appreciate all advice and perspectives given on this thread.
Message 26 of 35
GApeachy
Super Contributor

Re: Considering Bankruptcy and Need hard honest advice

Get er done!  Get healthy and enjoy life, family, students and career.  Smiley Wink  GL!

My Take Home Pay Don't Take Me Home
Message 27 of 35
Phoenixupward
Regular Contributor

Re: Considering Bankruptcy and Need hard honest advice

Please file as soon as you can.  Your current medical condition is a byproduct of your financial stress.  Take care of yourself and your family.   In addition, student loans can not be discharged unless your attorney can prove extreme financial hardship or unless they were private loans that were used for educational expenses.   In the event that your student loans remain, try to negotiate with your lender and have an income sensitive payment plan in which you can include all the people you are responsible for in your household.  You may also want to do a forbearance and delay payment until the dust settles in which you've established a budget for yourself.  Both scenarios will report positively on your credit report.   As an aside, student loans can be beneficial to your rebuild as you have an installment loan part of your credit mix therefore your scores post discharge can possibly be in the 650-670 range. 

Good luck and many blessings.  

Message 28 of 35
twono
Frequent Contributor

Re: Considering Bankruptcy and Need hard honest advice


@Phoenixupward wrote:

As an aside, student loans can be beneficial to your rebuild as you have an installment loan part of your credit mix therefore your scores post discharge can possibly be in the 650-670 range. 

Good luck and many blessings.  

 

I agree, but 650-670 fresh out of DC, is a stretch, IMHO.

 

I had clean reports going in to day of filing.   After my DC 4 mos ago, with student loans reporting 100% positive, a $3000 Kohls that survived Bk, a new CreditOne $2200, and new OLLO for $1100, i am at EQ 646, EX 623, and TU 619.

 

I know every file is different, but i've not seen scores in the 650-670 range right after DC.   If that were the case, people would be at 750 in a year.  Smiley Happy


 

Message 29 of 35
Phoenixupward
Regular Contributor

Re: Considering Bankruptcy and Need hard honest advice

It's true in my case.  Once my report updated, my scores were 650-660 range 2 months after my discharge 7/26/18.  I believe it was on the strength of my student loans.   My first credit card approval was a Blaze Mastercard for 1.5k starting limit.   I guess I just got lucky.  My rebuild has been quick and effortless.   As a matter of fact, I got approved for 2 Discover cards (2k & 1k) 3 months apart and my discharge wasn't a year old.  I financed a 2015 BMW for less than 9K in late January 2019( huge down payment)and paid it off  January 4, 2020.  I'm truly thankful for my blessings as well as humbled.   I've learned a lot about credit but my real love is the best liquid asset which is cash. 💰💰💰💰

Message 30 of 35
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