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Thread: Bankruptcy.

  1. #1

    Default Bankruptcy.

    Over the last several years, I have learned a tough lesson.

    That lesson being this -

    Credit cards and schizophrenia do not mix.

    I had racked up $35,000 in debt in just a little over a year when I was unmedicated. Then, I got medicated, and I spent the next three years paying it off the best I could. Then, I had a steady PT job that helped, and eventually I had more than half of that debt paid off.

    I got laid off from that PT job, along with everybody else in my department, a little over two years ago.

    In that time, with interest after these debts went to collection agencies since I no longer was able to make the payments they were asking from me, my debt became more than it ever was.

    So, I decided I am going to go for bankruptcy, for that and for the hospitalization bills that I also am finding myself unable to pay (and am now getting calls on a daily basis from collection agencies involving).

    But, every paralegal agency I talk to involving this tells me the same thing - I need to pay for legal services, credit counseling, court fees. The total - I need to come up with $1,000 in order to prove I am officially broke.

    Shit, man. In a way, I can't be too upset - I DID get myself into this mess, after all, and karma can be a bitch.

  2. #2

    Default

    Bankruptcy is a big step that can have severe ramifications for the rest of your life. Make sure to explore all your options before considering it.


    This is a bit of a personal question, and you certainly have no obligation to answer it. How did you spend 35K in a year? Like, what did you buy, what did you do? Just idle curiosity on my part.

  3. #3

    Default

    It's ironic how you need to pay a thousand dollars to prove that you're bankrupt. I've never been in debt because I've never had a credit card (horror stories like this scare me out of it), but I'll be sure to never get in it when (or if) I end up getting one.

    Just know that if you do this, you'll have to say bye-bye to good credit, which really really sucks. I'll keep you in my thoughts, though. And if you need somebody to rant to, heck, we're here for ya.

  4. #4

    Default

    This is the sort of situation for which bankruptcy was intended. Shit happens. Sometimes enough shit happens to one person at one time that you can't dig your way out of the hole. So you get a do over of sorts. Yes, it screws up your credit rating for a while, but that's hardly the end of the world. You've got a lot of company with the economy being what it is.

    My daughter and son-in-law went through something similar a few years ago, and put a couple year kink in my diaper wearing when they moved back in with us while they sorted out their lives. I'm proud to say they learned their lessons, turned things around and are now property owning, taxpaying solid citizens. Better still, they don't live with me anymore.

    Too bad about having to pay the lawyer up front, but you have to remember that an awful lot of legislators are either lawyers, friends of lawyers, or both. You didn't think they'd screw themselves when writing the laws, did you?

  5. #5

    Default

    A word of advice from someone who has been there (racked up $40K in roughly 2-3 years during my early 20's, went bankrupt at 26)...

    Most lawyers who do bankruptcies will let you make payments. They won't do the filing until you pay their fee completely, but they will let you send the creditors to them while you're getting the money together - once you have representation, all you have to do is say "I'm filing for bankruptcy, here is my attorney's number" - and they'll stop calling you.

    That in and of itself is worth it. And be sharp about paying the lawyer - every spare penny of every paycheck should be heading towards the lawyer, particularly while you're still kind of low on the income scale. Make some sacrifices to accelerate the process - go without cable for a month or two (I cut my TV off 3 months ago and just watch NetFlix and whatever I can catch on Hulu et al, and I find that I don't miss that $50/mo bill a bit) - whatever you gotta do.

  6. #6

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    yes Bankruptacy is a scary thought. Especially when you are brought up that a man should keep his word (you agreed to pay the charges and fees and stuff).

    My bankruptacy cost me roughly $1500, that was my attorney, credit couseling classes, and filing and all.

    Mind you, I own 1 vehicle outright, had a loan on one (still got it), have a DJ business (or hobby as some say) with a good bit of gear as well. Keep in mind that any secured debt (vehicles, real estate, items you used as collateral for a loan) cannot typically be absolved with a chapter 7, some unsecured debt cannot be absolved either (student loans are next to impossible to get rid of, you must be disabled or dead.... also debt ran up within 6 months of filing date is typically looked as suspect)

    If you are not working, and have no income, you can search out to see if your area is served by a Legal Aid Group.... basically they take cases for those who cannot afford a lawyer.... now they may not be as quick, nor may they go the extra distance that somebody would if they were getting paid, but they will protect your rights.

    You can always file ProSe, which basically means you are representing yourself as your own counsel - I would not reccommend this unless you have studied case law and the bankruptacy code, cause your creditor's lawyers know it and will use it.

    For the filing fees, if you are unable to pay due to lack of means, there are filing fee waivers.... I believe the filing fee alone is close to $400

    If you are thinking about filing, do your own legwork! Keep every bill that you get, get a FREE copy of your credit report, get titles to all your vehicles, last 3 years tax returns, 6 months of any bank statements (also any that you are a signor on too - I am on my mom's acct), copies of any court papers (like if a creditor is planning to sue you in cort, or has, or had and you paid it off). I have a folder that is 3" thick of all my paperwork....

    I had went to an attorney who did the consultation and i was never able to go thru with him cause my car decided to break down.... so by the time I did decide to do it, he refused to take my case. but i had all the paperwork he had requested. My new attorney was more than happy to go through all that paperwork, meant less work for them. You should be prepared to have to get the information that your attorney needs, cause if they have to do it, it will likely cost you.

    I had a hearing at the Federal Courthouse, my attorney was present, simple yes sir, no sir answers, completed my post filing credit counseling course and a month later got a letter saying DISCHARGE NOTICE and it was done.... all that work for one piece of paper.

    Without knowing where you are, I cannot really tell you who to look at for any kind of resources, as different areas will recognize different credit counseling services. The one I used was like $35 to $50 and I did it all online, they were web based slide shows with audio, then you had to have a phone call with somebody who went over that you were the only one who completed this training, all the info you entered was true, you know what got you into this situation and you know what will keep it from happening again.

    Just a note: your lawyers office will not allow you to tell your creditors their info UNTIL they have been paid in full. Also when you tell a creditor that you have filed, you need to provide the name of the law firm, case# and date of filing, and their phone#... DO NOT just answer I filed Bankruptacy and hang up, that does not fulfill the obligation that you have to your creditors and you will still get called. NOW, once you have filed, and have let your creditors know, you need to document the date and time you did so, cause if they call again they can be fined.

    Also if you have something that you intend to keep in the bankruptacy, and are able to keep up the payments (this is called re-affirmation), you need to keep up with the payments, and you may not even get a bill for it. When I re-affirmed on my car loan, there was a period where I did not receive any communication from my car loan company for almost 6 months, cause from the point I filed, till the month after discharge they were not allowed to send me bills, yet I kept paying the car note, cause it all would have been due after discharge if I hadn't. When I finally got a bill, all my payments showed as posted to the loan account.

  7. #7

    Default

    The bankruptcy will have ramifications for 7 years on your credit. Companies are not allowed to go any farther back than that.

    Get the bankruptcy, then go to a good credit card company (I'll recommend Orchard Bank from personal experience with them), and get a secured credit card with, say, a $300 limit. Put one thing on the card a month and pay it off before they can apply interest. Your credit will slowly work its way back up. When I started repairing my credit, I was at 550. I'm now up over 750. It takes a while, but give it time.

    The real trick is to be responsible. If you have the money, put it on the card. If you don't have the money, wait until you do. Simple enough, right?

  8. #8

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    one further thought: once you file, your mailbox will be filled with junk mail from all sorts of auto dealers and pre-approved credit card comapnies.... RUN!!!! I waited almost 2 yrs before I sought out new credit, i have a WalMart card with a small limit. I use it for gas (3 cents off a gal) and pay it off before the bill even prints.

  9. #9

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    if you get a card (to anyone in general) definitely try to keep a low limit. I stopped paying attention to mine and been piling up without having enough to clear the balance yet :/. and can't imagine how bad it would of been if the bank had kept upping my limit instead of stopping at 1,600. Also never get more then one for awhile.

    Debt becomes a PITA when you have school on top of it as well :/.

  10. #10

    Default



    Quote Originally Posted by Rheeer View Post
    The bankruptcy will have ramifications for 7 years on your credit. Companies are not allowed to go any farther back than that.

    Get the bankruptcy, then go to a good credit card company (I'll recommend Orchard Bank from personal experience with them), and get a secured credit card with, say, a $300 limit. Put one thing on the card a month and pay it off before they can apply interest. Your credit will slowly work its way back up. When I started repairing my credit, I was at 550. I'm now up over 750. It takes a while, but give it time.

    The real trick is to be responsible. If you have the money, put it on the card. If you don't have the money, wait until you do. Simple enough, right?
    BTW - it's 10 years, not 7.

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