Bankruptcy

[Anonymous]

I’m sure this topic will lead to many snarky responses but I’m looking for personal bankruptcy advice. Not sure about chapter 7 vs 13 and where to start. Any recommendations for a lawyer in NoVa? Basically, I am still able to pay my debts each month but it leaves no money left to live on. Have children, daycare, rent etc…

I don’t know what else to do right now. Getting a second job isn’t feasible due to young children and already working full time. I’m a teacher.

[Anonymous]

I am a teacher as well. From your post it doesn’t look like you have any mentioned debt to discharge. If you do have debt what are the numbers and types of debt involved?

It sounds like you have an issue more related to living in a high cost of living area on a low salary.

I work in MCPS and salaries seem to be a bit more generous with housing more affordable. Typical two bedroom apartments are about $2k in most parts of the county. You might qualify for the MPDU program with offers lower rents.

[Anonymous]

My DH did Chapter 13 after a major medical crisis and our share of a $2mil hospitalization for one of our children and repayment plan for taxes. This reset allowed us to keep our home. Bankruptcy allows you time to get back on track and every debt is repayed but over time without interest growing and the debt growing. Also having one combined payment brings stress levels down.

There is no shame in this. It does take a bit of work upfront to gather ALL the debt information and lay out your monthly expenses. Don't underestimate what day to day life costs, be realistic about what you can afford to pay, document every debt you have and do not miss any payment.

[Anonymous]

I filed chapter 7 in 2017, and it was the best financial decision I could have made at the time for my situation. I recovered quickly, built a house in 2021 (conventional loan), and have no debt currently beside my mortgage.

I have zero regrets with filing and hate that there are so many myths and shame with doing it.

[Anonymous]

Wow…OP back, and thank you all for the posts. The thought of this has been eating away at me, making me physically ill and keeping me up at night. Just hearing a few positive stories makes me feel so much better. I will definitely be doing more investigating.

Basically the PP hit it on the head with low paying job and high cost of living. We have a pretty reasonable rent right now (as in, I don’t think even an apartment would be less at the moment), but CC debt from trying to stay afloat with 2 kids has taken over.

[Anonymous]

Is a 0% balance transfer for the CC debt feasible?

[Anonymous]

Anonymous wrote:Wow…OP back, and thank you all for the posts. The thought of this has been eating away at me, making me physically ill and keeping me up at night. Just hearing a few positive stories makes me feel so much better. I will definitely be doing more investigating.

Basically the PP hit it on the head with low paying job and high cost of living. We have a pretty reasonable rent right now (as in, I don’t think even an apartment would be less at the moment), but CC debt from trying to stay afloat with 2 kids has taken over.

If you discharged the debt would you be able to afford all of your fixed expenses without incurring more debt.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Wow…OP back, and thank you all for the posts. The thought of this has been eating away at me, making me physically ill and keeping me up at night. Just hearing a few positive stories makes me feel so much better. I will definitely be doing more investigating.

Basically the PP hit it on the head with low paying job and high cost of living. We have a pretty reasonable rent right now (as in, I don’t think even an apartment would be less at the moment), but CC debt from trying to stay afloat with 2 kids has taken over.

If you discharged the debt would you be able to afford all of your fixed expenses without incurring more debt.

I believe so, yes. I mean right now I’m paying close to 2k a month to credit cards and loan consolidation payments. I don’t know what payments would be expected if bankruptcy were filed. Outside of debts, our monthly expenses consist of rent, utilities, car payments, daycare and food.

[Anonymous]

The stigma of filing for bankruptcy is kind of similar to divorce and out of wedlock pregnancy-- there used to be shame but no one blinks anymore.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Wow…OP back, and thank you all for the posts. The thought of this has been eating away at me, making me physically ill and keeping me up at night. Just hearing a few positive stories makes me feel so much better. I will definitely be doing more investigating.

Basically the PP hit it on the head with low paying job and high cost of living. We have a pretty reasonable rent right now (as in, I don’t think even an apartment would be less at the moment), but CC debt from trying to stay afloat with 2 kids has taken over.

If you discharged the debt would you be able to afford all of your fixed expenses without incurring more debt.

I believe so, yes. I mean right now I’m paying close to 2k a month to credit cards and loan consolidation payments. I don’t know what payments would be expected if bankruptcy were filed. Outside of debts, our monthly expenses consist of rent, utilities, car payments, daycare and food.

You need to run the numbers to be very sure that you can afford all expenses going forward with incurring zero debt going forward. That includes increased rent and other inflation costs.

Chapter 7 seems a better option for you, although we don’t know the amount of your debt so hard to say.

But you also need to seriously consider increasing your income in order to be able to handle unexpected costs. What will you do if your rent increases $300 or more at your lease renewal? With a bankruptcy on your record, it will be very hard to secure new housing in the next few years.

Is the debt in the name of you and your spouse, or just one of you?

[Anonymous]

Anonymous wrote:I filed chapter 7 in 2017, and it was the best financial decision I could have made at the time for my situation. I recovered quickly, built a house in 2021 (conventional loan), and have no debt currently beside my mortgage.

I have zero regrets with filing and hate that there are so many myths and shame with doing it.

You can get a mortgage four years after filing bankruptcy??

[Anonymous]

My parents did this when I was young it was tough. Your credit is shot for seven years so you will not be able to rent, buy a home, etc. you will need someone (a family member) to co-sign for you in anything like that, car rental, cc, etc.

Bankruptcy Judge will not look at your cc debt and say ok, this is gone. They will ask why should we erase this and how do we know you will not just run it up again? Also they might take assets ie one of your cars, let’s say, to pay off your creditors. And to be clear it doesn’t sound like you have a plan to live within your means so what exactly do you plan on changing?

Look instead for a legit non profit credit counselor unless you have some crazy predatory loans that the judge might take pity on.

[Anonymous]

Anonymous wrote:

Anonymous wrote:I filed chapter 7 in 2017, and it was the best financial decision I could have made at the time for my situation. I recovered quickly, built a house in 2021 (conventional loan), and have no debt currently beside my mortgage.

I have zero regrets with filing and hate that there are so many myths and shame with doing it.

You can get a mortgage four years after filing bankruptcy??

You can get one within 2-4 years. The terms may not be the best, but it’s possible. You can generally get an FHA loan on the early end but I see PP noted that their loan is conventional.

That they got a mortgage and have no debt 6 years later (aside from the mortgage) is a really great story. That’s how bankruptcy should work out. But if you live above your means and continue to do so, you’re going to end up right back where you started without the ability to file again for years.

[Anonymous]

Anonymous wrote:My parents did this when I was young it was tough. Your credit is shot for seven years so you will not be able to rent, buy a home, etc. you will need someone (a family member) to co-sign for you in anything like that, car rental, cc, etc.

Bankruptcy Judge will not look at your cc debt and say ok, this is gone. They will ask why should we erase this and how do we know you will not just run it up again? Also they might take assets ie one of your cars, let’s say, to pay off your creditors. And to be clear it doesn’t sound like you have a plan to live within your means so what exactly do you plan on changing?

Look instead for a legit non profit credit counselor unless you have some crazy predatory loans that the judge might take pity on.

This is not true anymore. And even more so based on why you filed - like the PP who had debt due to a child’s medical care.

[Anonymous]

Anonymous wrote:My parents did this when I was young it was tough. Your credit is shot for seven years so you will not be able to rent, buy a home, etc. you will need someone (a family member) to co-sign for you in anything like that, car rental, cc, etc.

Bankruptcy Judge will not look at your cc debt and say ok, this is gone. They will ask why should we erase this and how do we know you will not just run it up again? Also they might take assets ie one of your cars, let’s say, to pay off your creditors. And to be clear it doesn’t sound like you have a plan to live within your means so what exactly do you plan on changing?

Look instead for a legit non profit credit counselor unless you have some crazy predatory loans that the judge might take pity on.

I guess my understanding is that I won’t have access to credit cards after this until a certain time period? I don’t know how how else to explain it but we’re definitely not living beyond our means. I’m in education and my spouse makes even less. We live in this area because it’s where we have family and neither one of us would make nearly the same salary elsewhere.