Bankruptcy Question
Does anyone know anything about bankruptcy? A close friend told me that you can file chapter 7 and keep up to $80 thousand in assets. We are going to look a bankruptcy lawyer this week. I just do not know what to ask or what all is available. Any advice would help.
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33 comments:
You want to keep your assets but stiff your creditors?
Hardly honest, imo.
If you are going to declare bankruptcy, you're going to have to give up your assets to those creditors who trusted you with their money.
Ditto!!!!!
Well for your information. I do not have any assets to keep. Just because some one told me something you ASSUME that is what I am going to do.
I just don't understand how it works. I know you have to give up everything. But, we are only filling on credit cards and a vehicle. I know they take the car but what about the stuff you put on your credit card is what I was wondering about. I do not even remember everything I put on them. So, do they let you keep that is what I am wondering.
No, i did not go buy a boat, 4 wheelers and a mobile home and going to write it off and keep it all. We have not charged anything on C.C. in over a year.
i hope they take all your stuff! I do not have a soft spot for people that file bankruptcy! sorry.
Okay, that was a little much, 9:33. We don't know the circumstances that put her in this situation!! Heaven forbid any kind of tragedy ever strikes any of us that puts us in that kind of a predicament.
And OP -- to be fair, I don't think you gave enough information in the first post for people NOT to assume that's what you were going to do. The only information you gave was that you heard you got to keep 80k in assets. Naturally, because it was the only detailed information, it's what people assumed. I'm sure you have your reasons, and none of us have any idea what they are. I hope it works out for you -- and I hope you understand the ramifications of a bankruptcy file. I'm glad you're going to be meeting with someone. Good luck!! I'm sorry you have to go through this.
9:33
I used to think the same thing. Then my husband was in a accident can not work any more. We had no C.C. dept before the accident. Now it is only $8000. But we have 2 new cars also. We do not know what is best. Letting them get reposed or filling bankruptcy. All of our dept is caused by the accident. Not because we were careless. Don't judge. It just makes you look like a awful person.
People do base assumptions on information that they have received. You mentioned the 80k in assests, and that would lead many including me to that logical conclusion.
9:33 said they have 2 cars and husband cannot work anymore. Are two cars necessary now?
I would read Dave Ramsey's book on money. Total Money Makeover. Great suggestions even when you're in tough situations.
RE: stiffing your creditors: My in-laws had to file bankruptcy and lost their home to a foreclosure many years ago. (My MIL's business tanked and she had mortgaged everything, against her husband's wishes, for the business. They later divorced). However, over time, my FIL paid back all his debtors, even though it was not required.
It gave me a new respect for him that he didn't walk away from his obligations.
firstly to the OP.. have you considered debt consolidation or reduction services? Bankruptcy needs to be your LAST and FINAL resort. Debt consolidation is a little easier on your credit score and gives you a way to work yourself out of debt, instead of just opting out. May I ask what has driven you to consider a bankruptcy proceeding?
To 9:55...you say you have considered bankruptcy because of your husbands inability to work due to his accident and not because of carelessness. My questions is.. if your husband was injured and not able to work, why do you now have two new cars? I dont mean to offend you...but buying new cars when your husband has no income? That sounds a little careless to me.
I'm guessing they bought the new cars prior to the accident. In carspeak, "new" doesn't mean "bought it last week." I would define a "new car" as one purchased anytime in the last year.
The only reason to file bankruptcy is death or illness, period. If someone has $80 in assets I would hope the courts would make them sell those assets to pay their debtors.
And in my opinion you should NEVER be allowed to include your credit cards in your bankruptcy. If you don't have the money to purchase it, you don't NEED it.
My advice is do everything you can to avoid filing. Sell your assets. The BK stays on your credit report for 7 years. Everytime your credit is pulled you will have to explain it.
Pay their creditors. Whoops.
i see your point jane doe...
i guess i was assuming that the husband was in one of their cars when he had an accident...and then they went and got another car to replace the wrecked one. i dont know if that is the case, she never specified so...sorry.
You will have to give all your creditors and assets to the trustee and s/he will decide what you can keep and what you do not.
We ended up filing after a horrible stint in the ICU that almost took my life during the three months we did not have health insurance.... to the tune of $250,000. It was all medical, every last one. No credit cards, no nothing. No matter what we did and how much we communicated with the creditors, they still garnished wages and came after us and that is why we filed.
Over the past 7 years we've been making an effort to pay back all those medical bills little by little. My husband and I hope that once we are both done with school, we can pay more.
Don't judge everything that had to file. It was the last thing we ever thought of doing, but were about to be made homeless because of it all.
** everything should be everyONE
As for the question regarding keeping the things you purchased with credit cards...they can't touch them. The nature of a credit card agreement is that it is unsecured by assets. There are credit cards tied to assets, but they are rare and you'd definitely know if you had one.
Money is always borrowed against something of value. In our consumer society, someone started assigning value to a person's future ability to borrow (via credit score/history etc) and lending against that value. So, when you default on credit cards, that's all they can touch.
Sorry, I was an econ major.
I agree with everything Nor Cal said.
It is most certainly not a "do-over" and you must consider that if you plan on trying to send your kids to college (if that falls within the next 7 years) or on a mission or anything like that...the Courts will not allow you to fund things such as this.
My sister was diagnosed with cancer at age 14 and was on chemotherapy for two years, and a year later my older brother had to have a lobe of his lung removed and everything reconstructed and my mom ended up with a lot of credit card debt from trying to pay his bills while he was unable to work, along with her own, and keep the rest of the family afloat all by herself. When all was said and done, she was left with significant debt. She decided to go with a debt consolidation company, and will be debt-free within 4 years. Definitely a better option for her than bankruptcy.
This makes me think of Michael Scott...
"I...declare...BANKRUPTCYYYYY!!!!!"
I went through a debt consolidation. Best thing I ever did. I only had about $5,000 in cc debt, but I wasn't making enough money back then. It has been a few years. The debt consolidation company makes deals with your cc company's and they lower your interest rate. Not the amount you owe, just how much interest they charge each month. I loved that two cc's went from around 20% interest to just 6%!!! This helped me pay them off a lot sooner. I learned my lesson to not get cc's with high interest rates. We do still have cc's now, but we have learned exactly what to do. The main reason we still even have cc's was to build husbands credit score.
If most of your debt is on your credit cards, I seriously recommend debt consolidation. Not, NOT bankruptcy. It did very little damage to my credit score. Bankruptcy will rip apart your credit score. Hope you get back on your feet soon. I know it's scary right now.
Every state is different, so when you meet with the attorney, they can tell you the laws in your state. We filed bankruptcy a year ago. I do not feel guilty about it. It is not against the law. It is a way to get a fresh start. And when we first started having trouble making the payments, I called the creditors and explained the situation. Most of them were not willing to do anything, and I was even told they couldn't do anything until I was late on my payments. It was a mistake to use the ccs as much as we did, but it was not for big vacations, or expensive gifts, it was from moving multiple times, job losses and cut in pay, food, medical, and things that come up in life. We didn't see another way out. We also did not take it lightly. We discussed and prayed about it for over a year. And I consulted with several attorneys about it too. It may not be for everyone, but until you are in someones shoes, you don't really know what you would do.
That's sad that you did not feel quilty about it. Shame shame!
I have an idea, let's all file bankruptcy to get a fresh start, I hate paying my bills and I'm entitled to the best of everything!
I guess the biggest question is: Did you learn anything? Or are you in a ton of debt again?
Amen 10:25!
I don't know a whole lot about bankruptcy, but my husband is in the process of filing and I do know that you can't pick and choose which debt you include. It's actually against the law to pay off one creditor and not another, so, by law, you have to include almost everything. I say almost, because I know there are a few exceptions, such as your home, and I know that vehicles can be another. That doesn't mean you CAN'T include your home or vehicles in the bankruptcy, just that you don't have to. I also know, when it comes to a house that once you file for bankruptcy, you have up to 3 years to foreclose on your house and will be protected against the fees and things associated with that. I echo what other people have said...be careful not to judge. If you do, you will very possibly find yourself in a position that will teach you understanding in this case. I agree that many people file under stupid, unnessesary circumstances, and learn nothing from it. I have no respect for people like that who just milk the system. But know that there are really good people out there that truly have no other way out of the mess they are in. A mess they are in because of no fault of their own.
11:51 here...what I said is for the state of Utah. Like 10:25 said, the laws are different in every state.
MOST messes can be avoided. Carry disability insurance, don't buy what you can't afford, have a savings account and make scheduled deposits, get a second or third job . . . .
The last comment said it perfectly. I'm guessing that most bankruptcies don't happen to people who were in an insane car accident and it just isn't their fault. Most of them are people who feel like they're good people who have made a zillion dumb decisions. If you can't afford something, don't buy it - period. And there's no excuse for not having insurance. People act like unless their employer provides it, there's just no way to get it. That's ridiculous - it's $250/month, and if you can't afford $250 to pay for medical insurance then you need to get a different job.
10:25pm here
We have maintained no debt since the bankruptcy. And have not used any credit cards for 2+ years.
That is correct that you can not pick or choose what you want to included. But you can choose to keep paying on items you need to keep, like a car or your home.
And there are 2 different types of bankruptcy
Chapter 7 - Clean Slate
Chapter 13 - Payment plan to repay a portion of the debts over 3 - 5 years.
Bankruptcy stays on your credit report for 7-10 years. (Not to be taken lightly.) You also can no file again for 4 years on a Chapter 7 and 8 years on a Chapter 13.
11:18- Ummm, the only way you can get medical insurance for $250 a month is if your employer offers some coverage. If you have to find outside insurance, you are looking at a hefty penny. A family of 4- almost $1000 a month! We are working our tails off, but currently have no medical insurance. In which, we are the norm. A lot of American's have no medical insurance.
While I am happy that you have a job that offers you a great medical coverage, don't assume the rest of Americans have equal opportunity. We don't. Plain and simple. No, I am not suggesting we go for Universal Health Care, but something needs to be done for us hard working Americans who are not offered decent medical insurance.
12:43 - We had independent medical coverage for a family of three for just a couple hundred a month. You need to shop around. If you don't include maternity care, you can get it for a reasonable amount.
Okay 8:37, maybe you could share who you got your medical coverage through. Because every company I've checked, it's outrageous. I would shop around, if I knew where to shop at. How do you find companies to shop?
You have an insurance broker do the shopping for you. Then, they present you with the best plans.
We used an insurance broker, plus I searched...and searched...AND SEARCHED for a cheap plan, and yes, $200+ plans were presented to us, but they had the worst coverage, and you had to pay so much out of pocket for things anyway, that it doesn't seem worth it. Just the average coverage plans were always $400+, and the semi-good ones were closer to $600, which we definitely can't afford. Yes, please share...who do you have your insurance through 8:37?
Don't file bankruptcy!! There is help and an alternative.
RISEABOVEDEBT.COM
There is an office in Utah and Arizona.
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