I'm 27 going on 28 and have been debating BK since I was laid off in late March of this year. Unless full-time work happens soon(I work part-time but only 15 hours a week), I will not be able to make certain payments anymore and instead of being sued for missing "umpteen" credit card payments every month, it'd be most logical(not necessarily the smartest) to file. I realize that BK is a "one and done" situation and that I'll never be able to do it again, even in the future if I ran into medical situations. My scores are already in the mid 500's, so it's not THAT bad of a drop. Here's my questions as a newbie:
Does EVERY account have to be included? I ask because some of my small credit cards that I've never missed a payment on in the past 7 years, only have small monthly payments that I have no problems making(ie $25 a month), it's the bigger cards with the $100+ a month payments(Applied Bank, Wal-Mart/GE) that I won't be able to do anymore. Overall, I have 10 credit cards, with 7 of them being very small payments, 1 of them almost paid off, and 2 that are maxed out and have high interest and expensive payments. I do have an auto loan but I would rather not include it because even though the payment is high, I'm able to make it each month and I can't afford to be without a car as I don't have money to put down at those used car dealers that say "no credit check if you put $3,000 down."
This question probably gets asked a thousand times, but if the whole point of people claming BK is because of the inability to pay their debts, how are they supposed to come up with $500-1000 to pay the BK lawyer?
Thanks for any and all advice.
Let me explain my situation. I am 22 years old and I basicly financially ruined myself when I lost my job etc.. I piled up medical bills and got into an accident and was going to get sued by a credit company. I had no choice but to file. I went on legalzoom.com and found an amazing lawyer. I put down 300 bucks to retain my lawyer. I had a autoloan and the car company wanted to try and repo because I was one payment behind and my lawyer did not want me to go through any more hardship so he filed for me! I was so greatful I put down another 250 to pay down my 1000 dollar balance. With my income I qualified for the courts to waive my bk court fees. Now I am on a 50 dollar a month payment plan. He allows me to pay what I can to get by. I still don't have a job but I am greatful for my attorneys help!
edit: not all accounts have to be included but you have to disclose all accounts you have. The courts still have to send your creditors a letter whether you include them or not. They may choose to close your line of credit if they wish whether you include them or not! So beaware.
Also in california, a chapter 7 no asset case discharges all debt no matter if it was included or not just as long it the debt was incurred before the file date.
If you're looking to file a Ch 7, whether or not you choose to include certain cards in the BK might not be up to you. Several of your credit card holders will close your accts regardless of positive standing or not.
You might want to compare Ch7 vs Ch 13 and see which one is better for your individual situation.