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Should i proceed with bankruptcy

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Should i proceed with bankruptcy

here is my situation, I have been rebuilding my credit and then I get a letter about a loan that I had a default judgement from back in 2013 for $2300, the balance is now $4600 and they sent me a 15 day letter notifying my they will garnish my wages if not paid.

They give you the option to do a payment to avoid garnishment, which I cant afford that either, the only option is doing chapter 7 just for this one debt. I called them directly to see if they would be willing to work with me and they said if i pay 50% and then they would make a payment schedule with me, of course I cant afford that.

Is there any other options I am missing? just seems so drastic to go through bankruptcy for one account to avoid being garnished and ruing my credit and losing all the credit I have established.

Message 1 of 17
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Valued Contributor

Re: Should i proceed with bankruptcy


@mprince75 wrote:

here is my situation, I have been rebuilding my credit and then I get a letter about a loan that I had a default judgement from back in 2013 for $2300, the balance is now $4600 and they sent me a 15 day letter notifying my they will garnish my wages if not paid.

They give you the option to do a payment to avoid garnishment, which I cant afford that either, the only option is doing chapter 7 just for this one debt. I called them directly to see if they would be willing to work with me and they said if i pay 50% and then they would make a payment schedule with me, of course I cant afford that.

Is there any other options I am missing? just seems so drastic to go through bankruptcy for one account to avoid being garnished and ruing my credit and losing all the credit I have established.


What does the rest of your financial situation look like?

 

A BK would need to provide relief from significant additional financial hardships in order to be worth it IMO.

 

Also, you mention "losing all the credit you have established". Do you not have the money available on any other accounts you could borrow from?

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Message 2 of 17
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Frequent Contributor

Re: Should i proceed with bankruptcy

Could you provide a clearer picture of your situation for us to see how we can help you?

 

What are your current score, inquiries, other debts, cards you currently have and their balances?

 

IMHO, filing bankruptcy for that one debt isn't worth it. 

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Message 3 of 17
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Member

Re: Should i proceed with bankruptcy

FICO is 580. Not high but better than where I started. I have 2 credit cards limits of $500 with around $300 in balances. Garnishment would be about $500 a month, and I can not afford that as I currently live paycheck to paycheck so that is why my only option in my opinion is bankruptcy to prevent the garnishment so I can survive and pay bills.
Message 4 of 17
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Moderator Emeritus

Re: Should i proceed with bankruptcy

No way I would file for that amount. Work out the payment arrangement in writing and include any goodwill adjustments to your credit if you can. Even if it is something.. you can negotiate this. It does not have to be $500mo. Pick up a 2nd part time gig. You can pay this off quicker than you think. And the BK is going to cost you just about the same amount to file. 

Message 5 of 17
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Community Leader
Senior Contributor

Re: Should i proceed with bankruptcy

Also, what’s the statute of limitations in your state? You may be past it, where they can’t come after you legally for the money, but only pester you in the hopes you’ll pay.



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Message 6 of 17
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Frequent Contributor

Re: Should i proceed with bankruptcy


@Tuscani wrote:

No way I would file for that amount. Work out the payment arrangement in writing and include any goodwill adjustments to your credit if you can. Even if it is something.. you can negotiate this. It does not have to be $500mo. Pick up a 2nd part time gig. You can pay this off quicker than you think. And the BK is going to cost you just about the same amount to file. 


+1

 

You say they require 50% upfront so if you've tried negotiating with no success, what about a temp part-time job? Worst case scenario and they garnish your wages the part-time job can fill the gap (you mentioned paycheck to paycheck). Then going forward see what expenses can be reduced to eliminate living paycheck to paycheck.

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Comenity BJ's Perks Plus M/C $8k
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INQ 1/6, 1/12, 2/24.......TU-0, EX-2 EQ-2
Message 7 of 17
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Established Contributor

Re: Should i proceed with bankruptcy


@mprince75 wrote:

here is my situation, I have been rebuilding my credit and then I get a letter about a loan that I had a default judgement from back in 2013 for $2300, the balance is now $4600 and they sent me a 15 day letter notifying my they will garnish my wages if not paid.

They give you the option to do a payment to avoid garnishment, which I cant afford that either, the only option is doing chapter 7 just for this one debt. (Unless this is your only debt, you can't choose one to have discharged and not the others, unless it's like your car or house where you can claim exemption, but if you have credit cards or loans, you will have to include them also). I called them directly to see if they would be willing to work with me and they said if i pay 50% and then they would make a payment schedule with me, of course I cant afford that. (If you can't afford $2300, I don't see how you can afford an attorney? That's almost what I paid for the attorney and filing fee together and I don't know of any attorneys who will file before PIF).

Is there any other options I am missing? just seems so drastic to go through bankruptcy for one account to avoid being garnished and ruing my credit and losing all the credit I have established.


Hard to believe they waited 6 years to attach your pay, are you sure the letter is from the legitimate owner of the debt? Did they provide you an itemized list of what the other $2300 is for?



Chapter 7 Discharged & Closed Jan 2020
Message 8 of 17
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Member

Re: Should i proceed with bankruptcy

Bankruptcy will cost a flat rate $600 with an additional $335 from the court so bankruptcy is cheaper than the $4600 debt. I appreciate the advice but seems to me Chapter 7 is the way to go. The collection agency is weltman weinberg & reis and they are not willing to make any kind of deal. Should I try contacting the original creditor?
Message 9 of 17
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Super Contributor

Re: Should i proceed with bankruptcy

Dont know where you live. But you can Google Legal Aid in your area. There are law firms that will do pro bono work for you. But you must meet some guidlines. Legal Aid helps low-income people. People with income less than 125% of the federal poverty guidelines are eligible and may qualify for assistance. Sometimes people with less than 200% of the federal poverty guidelines can qualify.





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