Talk to me about bankruptcy

[Anonymous]

Op, I would rent out a room for $400/month for a year to help with the CC payments.
DH or you need to work evening or night guts or weekends.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Even if you could get your debt discharged (which you probably cannot), how will you get by afterward when you have all of the same expenses and your husband is still unemployed but now you don’t have access to any credit lines to cover your shortfalls?

We would have at least $800 a month more if we didn’t have to pay minimums.

So your credit card debt is what, around $30k?

It’s a lot more than that. Like, triple.

You must have an incredibly low interest rate if your minimum payment is only $800 on $90k in debt.

these two are not connected. A min payment is spelled out in the T&C's of the cc, the payment is a function of rate owed per $100 X days in billing cycle

[Anonymous]

If a job is in the near future I would hold off on bankruptcy. I was getting hit with all the minimums and while i could pay them there was no way out long term. Solution was a debt consolidation program. This is not some legal proceeding its what is called a structured settlement. You don't file anything in court/ lose your home or have any assets seized. You would have to be able to make a monthly payment. You would need to stop living off of credit. The "structured" part of it is creditors agreeing to accept less than what is owned in the form of monthly payments. It can save you 35-50% of the total amount owed. The monthly payment won't drop by much ( as compared to mins you pay now) but it can be tailored to be low in the beginning to get started. It would take close to 5 years and your credit will bottom out but recover over time. You can go about these types of programs on your own by calling creditors I wasn't able to make that happen so I worked with a company to handle all of these on my behalf. I make one payment to them which is close to what I paid before but I have an end date in the future where I will make it out of this program. I am almost 4 years in and happy with how it turned out.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:OP, just ignore all the advice unrelated to your question and make an appointment to see a bankruptcy lawyer. It's nothing to be afraid of. Not a company, an actual lawyer with a track record. They will explain the whole thing to you and then you and your husband decide what to do.

We can’t afford a lawyer. How do bankruptcy lawyers even make money? All their clients are broke.

It's been a few years ago for me but my lawyer explained to me at the initial consultation how it would work. He charged $1600 and that had to be paid before he would file. He told me to stop paying credit cards immediately and start paying him instead. It would take about three months for me to pay him and then he would file. When the CC companies called I was to refer them to him and tell them to stop calling me which they were required by law to abide by. Once I had him paid he filed and within a few months we went to court. I know another person who filed last year and their lawyer allowed them to make payments on his fee and he went ahead and filed before getting his full fee, but his advice re the CCs was the same, stop paying them and tell them to call him.

Because I stopped paying all credit accounts the companies started adding penalties and interest and by the time we went to court I owed about double what I initially owed thanks to that. It didn't matter though because it was all discharged in the bankruptcy.

Doubling a $90k credit card debt which you can’t pay now would be horribly detrimental if the bankruptcy is not granted. There has to be a way the OP could find out the likelihood of success before getting into this position.

A few good points that people made are that you have to consider the effect of a bankruptcy on employment and future employment and on whether you can keep the house given the craziness of apartment costs. Another thing is to figure out how to modify your lifestyle.

By brother and SIL (not married) both filed for bankruptcy. By brother had difficulty getting jobs for a number of years. My SIL never figured out how to stop spending and has no retirement and is unable to help her daughter pay for college but due to decent incomes her daughter cannot get need based aid.

[Anonymous]

OP can you share what state you live in? Also, what is YOUR income currecntly?

Here is advice for people living in VA

https://www.isbankruptcyformeva.org/?gclid=Cj0KCQjwxIOXBhCrARIsAL1QFCZMS7JqPIqCjK6JP7Umkuj8WIouwKkylh_-_4xRNNeG9qzgLzZOdVYaAnVwEALw_wcB

Is Bankruptcy Right for Me?

The nonprofit Virginia Poverty Law Center (VPLC) and Central Virginia Legal Aid Society (CVLAS) have created a guided online interview to help you decide whether you should contact an attorney about filing bankruptcy in Virginia. After answering a series of questions about your situation, you will receive a worksheet recommending whether you should file bankruptcy now, and if so, why or why not. The worksheet also will explain which type of personal bankruptcy you could be eligible to file, Chapter 7 or Chapter 13. And if it recommends you should not file bankruptcy now, it will explain when you may want to consider filing bankruptcy if your situation changes.


To use this program, you should be at a computer that is connected to a printer. You also will be able to email the worksheet and save it in your email for later printing. You will need the following information to use this program:

Your five largest debts, including the type of debt and how much you owe
Your source and amount of income
Your source and amount of money in checking and savings accounts
Your other assets on deposit
Property you own free and clear
Property you are buying on credit, including how much it is worth and how much you owe on it.

The type of bankruptcy you can file may be limited by whether your household is above or below the state median income. The median is the income amount where half the households have more and half the households have less. Your income is determined by the six-month period before you file bankruptcy.

People in households with incomes above the state median may have difficulty filing a Chapter 7. If so, they must file a Chapter 13. People in households with incomes below the state median may file either a Chapter 7 or a Chapter 13.

in VA the median HHI for a familoy of 4 is about $90,000.. That's to qualify for a chapter 7 bankruptcy.

http://www.virginia-bankruptcy.com/means-test/#:~:text=If%20your%20total%20monthly%20income,option%20of%20filing%20Chapter%207.

[Anonymous]

Op-like another poster said you should be able to get a lower interest loan somewhere else. Try lending club, or a credit union, maybe you could even get a heloc. Try justice federal credit union or state employees credit union. We got a credit line with a 1.99 fixed rate for a year. Even if you file bankruptcy it sounds like you don’t make enough without your husband working so you’ll likely incur more debt if he doesn’t work. He needs to reach out to a recruiting company and get help writing his resume, there is a job for him out there.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Even if you could get your debt discharged (which you probably cannot), how will you get by afterward when you have all of the same expenses and your husband is still unemployed but now you don’t have access to any credit lines to cover your shortfalls?

We would have at least $800 a month more if we didn’t have to pay minimums.

So your credit card debt is what, around $30k?

It’s a lot more than that. Like, triple.

You must have an incredibly low interest rate if your minimum payment is only $800 on $90k in debt.

these two are not connected. A min payment is spelled out in the T&C's of the cc, the payment is a function of rate owed per $100 X days in billing cycle

Um, the formula you provided specifically incorporates the interest rate.

[Anonymous]

OP I don’t know why you’re hiding the ball about where you live. I am a lawyer with a bankruptcy background and I was all about trying to help but without that information, there’s a limit on how much anyone can. Anyway PPs are right that you’re likely to be limited to a chapter 13–it’s a lot less helpful to you and makes it a much worse idea to stop making payments and let the debt balloon.

[Anonymous]

Tally up your debts, expenses, assets and income and then go see an attorney for a consultation.

You really must do that as a next step.

We considered bankruptcy, or seeing if DH could file (all the CC debt was in his name) and found that it was not the best path. But you need all that info to help the atty make a recommendation.

[Anonymous]

Even if you have childcare issues, your DH needs to work on your days off. Your household absolutely needs that extra income to throw at the debt.

Further, your budget needs to be cut by a lot. You need to spend less than your earn. What’s sucking up so much of your budget? Are you paying out of pocket big expenses for your special needs kid?

[Anonymous]

If husband isn't working, he needs to be carving out time to look for support services for your special needs kid.

[Anonymous]

Have you applied for Medicaid for the special needs kid? It sounds like the needs are significant if the kid needs therapies, expensive medical care, etc and is still under 5.
Medicaid benefits are generally not tied to income if the kid is disabled.

[Anonymous]

Anonymous wrote:Even if you have childcare issues, your DH needs to work on your days off. Your household absolutely needs that extra income to throw at the debt.

Further, your budget needs to be cut by a lot. You need to spend less than your earn. What’s sucking up so much of your budget? Are you paying out of pocket big expenses for your special needs kid?

+1, given the labor demand right now there is no reason he shouldn’t be able to get a weekend/evening job in the retail/service industry. There are also daytime jobs that allow you to bring your kids along (bus driver, child care etc). I get that might be tougher with a child with special needs but most cities in the dmv have extensive resources/free preschool etc for children with disabilities that you should be able to leverage. If you shared where you are located people might be better able to offer up options. But bottom line after 2 years and given your debt situation he doesn’t have the luxury of sitting around and waiting for another 100k + job to materialize.

[Anonymous]

Reviving this post for 2 reasons —

1) what happens in a bankruptcy proceeding if one of the credit card companies objects to the bankruptcy and alleges fraud? (S 523(a) for the lawyers on here). Asking for someone I know.

2) how is the OP doing 18 months later?

[Anonymous]

Real BK Attorney here (not some judgemental SAHM spewing some Suzzie Orman b.s. advice).

Even if a creditor alleges fraud, the Creditor has the burden of going to trial and proving fraud. (It's called an adversarial proceeding.) Many creditors threaten to do this to squeeze money out of the debtor. However, few creditors actually follow through because it's very expensive to them and creditors hardly ever win due to the high burden.

If a creditor does follow through, the debtor will need to make a choice - can I live with this particular debt or do I pay an attorney an extra 5 to 10k for this trial (the first payment to the bk attorney probably did not include this type of trial). However, many bankruptcy judges will appoint an attorney for consumers if they are poor enough and ask nicely.