Bankruptcy

[KingPhil]

Originally posted by: Freejack2
Don't do it if at all possible, bankruptcy is a black mark that stays for many many years. There are many things that require the kind of credit that a bankruptcy will automatically kill.
You could get your Fico score in the 800's (if that's possible while still under a bankruptcy) after declaring bankruptcy and still get denied for even a car loan at a decent interest rate just because you have a bankruptcy in your history. There are even some loans and credit cards that even if you have a bankruptcy 30 years ago you will still be denied.

You can't declare your student loans and the only way you'll keep your car is if you file the type of bankruptcy that you go on a repayment plan or don't file the car in the bankruptcy. Also if your father co-signed for anything you are filing for bankruptcy on, they will go after him for payment.

If you can at all manage not to declare it, don't!!!! It's the worst thing creditwise you can do to yourself. If you can sell the car and contact credit counseling for the CC debt.

NOOoooooooooo

Depends on the TYPE of bankruptcy you do....

I'm not sure, but one will clear you completely of debt < that will be a black mark against you for 7 years I blieve.

The other will help you combine all your bills, be a black mark against you, ONLY until you have everything paid back, and then its like it never happened!

Bankruptcy has options....... look at them all.

 

[Malak]

My mother co-signed my car. She no longer works, as she is disabled. Would they go after my dad?

 

[KingPhil]

Chapter 13 Bankruptcy is also known as a reorganization bankruptcy. Chapter13 bankruptcy is filed by individuals who want to pay off their debts over a period of three to five years. This type of bankruptcy appeals to individuals who have non-exempt property that they want to keep. It is also only an option for individuals who have predictable income and whose income is sufficient to pay their reasonable expenses with some amount left over to pay off their debts.

Chapter 7 Bankruptcy, sometimes call a straight bankruptcy is a liquidation proceeding. The debtor turns over all non-exempt property to the bankruptcy trustee who then converts it to cash for distribution to the creditors. The debtor receives a discharge of all discharageable debts usually within four months. In the vast majority of cases the debtor has no assets that he would lose so Chapter 7 will give that person a relatively quick "fresh start".

 

[kyparrish]

malak,

Dude, I wouldn't worry about your situation. Even if you declared BK, you'd still have to pay your student loans, which make up 1/2 of your debt. If you have payed your stuff on time, then you probably have a decent credit score. Are you upside down on your car loan? If not, I'd sell it, and go get a beater car. Car loan solved. As for your revolving debt (CC's, just start cutting expenses, and make it your #1 priority to pay down. Eat out less. Get dial up instead of broadband. Go buy rabbit ears for your TV, drop cable or satellite. Work OT. Get a second job.

I don't see where it makes sense to tank your credit score to only cut the debt you have to pay back in 1/2.

 

[StageLeft]

The car is worth less than I owe, so selling it isn't an option.

Sure it is; you just have to pay extra to get out from under the debt. What's worse, paying a couple thousand now to be done with the damn thing, or continue to get reemed on monthly payments for the next few years until you break even?

If you get that job and are thrifty, you can pay back loans at a faster rate than you're probably aware of. It will be hard starting a family while paying that back, but you can't if you just filed bankruptcy either.

There are even some loans and credit cards that even if you have a bankruptcy 30 years ago you will still be denied.

Are you sure about that? The apps I've seen say 7 years I think.

 

[kyparrish]

This thread reminds me why I hate my debt, and how I wish that when I was in high school, there was a mandatory personal finance class.

 

[Freejack2]

Originally posted by: malak
My mother co-signed my car. She no longer works, as she is disabled. Would they go after my dad?

I could be wrong on this but as far as I understand it unless your mother declares bankruptcy also they will go after her for the car payments, seeing as she co-signed they have every legal right to collect from her.

There is not much you can do about the car, I'd say your best bet is to contact credit counseling to get your cc payments under control and don't declare bankruptcy.

Also for Chapter 13 unless the laws have changed the 7 years don't start until you finish your payment plan.

Edit: Yes Skoorb there are loans such as a type of loan for your beloved Nissan cars that in order to qualify for you have to have near perfect credit and you can never have declared bankruptcy, even if it was 30 years ago.

 

[Malak]

Originally posted by: kyparrish
malak,

Dude, I wouldn't worry about your situation. Even if you declared BK, you'd still have to pay your student loans, which make up 1/2 of your debt. If you have payed your stuff on time, then you probably have a decent credit score. Are you upside down on your car loan? If not, I'd sell it, and go get a beater car. Car loan solved. As for your revolving debt (CC's, just start cutting expenses, and make it your #1 priority to pay down. Eat out less. Get dial up instead of broadband. Go buy rabbit ears for your TV, drop cable or satellite. Work OT. Get a second job.

I don't see where it makes sense to tank your credit score to only cut the debt you have to pay back in 1/2.

See from the big numbers you would think in 1/2, but think about the monthly payments. My car alone takes more than half my monthly income, which has decreased lately. So of all the things I'd want to get rid of, it's the car. I might consider just ditching all the other credit cards and loans which total around 7k though. The problem is, I don't know if that would keep me from losing my car anyway.

 

[kyparrish]

Originally posted by: malak

Originally posted by: kyparrish
malak,

Dude, I wouldn't worry about your situation. Even if you declared BK, you'd still have to pay your student loans, which make up 1/2 of your debt. If you have payed your stuff on time, then you probably have a decent credit score. Are you upside down on your car loan? If not, I'd sell it, and go get a beater car. Car loan solved. As for your revolving debt (CC's, just start cutting expenses, and make it your #1 priority to pay down. Eat out less. Get dial up instead of broadband. Go buy rabbit ears for your TV, drop cable or satellite. Work OT. Get a second job.

I don't see where it makes sense to tank your credit score to only cut the debt you have to pay back in 1/2.

See from the big numbers you would think in 1/2, but think about the monthly payments. My car alone takes more than half my monthly income, which has decreased lately. So of all the things I'd want to get rid of, it's the car. I might consider just ditching all the other credit cards and loans which total around 7k though. The problem is, I don't know if that would keep me from losing my car anyway.

2nd job?

 

[Vic]

Originally posted by: KingPhil
I think if you file chapter 7?? you have to pay everything back but they prioritize your bills and take money direclty from your checks....... after its all paid back its like it never happened

That's Chapter 13. You only want to do that if you have assets to protect. It's where you agree to pay back as much of your debts as you can, but reorganize how they are paid to make it more affordable/feasible for you. A trustee appointed by the court handles the payment plan, and the debtor pays the trustee directly (who then pays the creditors) for a period of up to 4 years.
Chapter 7 is where (at the discretion of the court) all your debts are liquidated, but you may be forced to sell or liquidate your own assets in order to payback a portion of your debts (once again, at the court's discretion).

For my many conversations with people who have done it, bankruptcy is an invasive process. Only to be done if you have to. The court and/or the trustee will make all your financial decisions for you until the process is completed (which can be anywhere from 2 months to 4 years). The debtor's credit will be trashed for a minimum of 2 years afterwards, and will have difficulty acquiring new credit at anything resembling market rates and terms regardless of credit score.

 

[StageLeft]

I could be wrong on this but as far as I understand it unless your mother declares bankruptcy also they will go after her for the car payments, seeing as she co-signed they have every legal right to collect from her.

Yes, I see no reason why disability would protect her from that. If he defaults on the loan then it falls back to her. That is, afterall, the entire point of co-signing!

Malak, have you looked at loan consolidation services? Many are crap, some are not.

 

[Freejack2]

Originally posted by: malak

Originally posted by: kyparrish
malak,

Dude, I wouldn't worry about your situation. Even if you declared BK, you'd still have to pay your student loans, which make up 1/2 of your debt. If you have payed your stuff on time, then you probably have a decent credit score. Are you upside down on your car loan? If not, I'd sell it, and go get a beater car. Car loan solved. As for your revolving debt (CC's, just start cutting expenses, and make it your #1 priority to pay down. Eat out less. Get dial up instead of broadband. Go buy rabbit ears for your TV, drop cable or satellite. Work OT. Get a second job.

I don't see where it makes sense to tank your credit score to only cut the debt you have to pay back in 1/2.

See from the big numbers you would think in 1/2, but think about the monthly payments. My car alone takes more than half my monthly income, which has decreased lately. So of all the things I'd want to get rid of, it's the car. I might consider just ditching all the other credit cards and loans which total around 7k though. The problem is, I don't know if that would keep me from losing my car anyway.

What is KBB private party on the car? E.g. how much of a loss would you take if you sold it say $500 - $1000 below KBB private party value?

 

[funboy6942]

People who dont know anything about a BK or have no bad cfredit shouldnt bother replying.

First there are two types a chapeter 7 and a 13. One is a redo where you wipe everything clean. You can keep your car or house BUT you will need to keep maling payments on it and get rid of the rest. I believe this is Chapter 7 the one we did. we kept my wifes car and had to loose the rest which was credit card and doctor bills. If your worried about the black mark on your credit think of this. if you dont see any way your going to be able to pay off the people you owe they will keep that on your credit for up to 7 years. With bad credit you will never be able to get a car loan or a home loan till thoes debts are paid in full and you have a letter stating such.

After BK has CLOSED not during but after you can right away get a car loan and a credit card. All you would have to do is appy for a cc card and as long as you havent had anything bad go on your report will get it. For a car all you have to do is show the BK closing papers and drive away. They will give you credit again with no problems because for 7 years if you screw up you cannot apply for another bk so they know if you mess up your screwed and bet your a$$ they will take you to court. But it is a chance your not going to do anything at all so they will give you the credit.

As for a home loan as long as you dont get anything bad in one year after closing you can get a home loan. Just show the closing papers.

the chapter 13 will allow you to pay everyone off but at a much lower cost to you. This may take years causing you not to get credit tll everyone has been paid.

If your thinking of doing this you need to be poor. no 100k yr job. I would suggest you have alot of debt. and the thought of going out and buying a expensive car then claiming can find your way to prision. Because you got the car with intent to BK which is a crime.

now how do I know this. Well I got hurt, became disabled, got sick of the creditors, and filed. Now once the insurance stuff and SS kicks in we will be able to get a new house. Main thing is not to mess up after you do it. this is your last chance to redeem yourself and if you mess up afterwards forget ever getting anything on credit.

 

[StageLeft]

Thinking about your car I don't think it matters how upside down you are. Sure, the loan is attached to the car, but look at it as a) Money you owe and b) Equity you have (the car). Stop thinking of them as one in the same. If it's a car that's got a relatively high KBB, then you need to just sell it and buy a junker. Keeping it is merely delaying the pain. Keeping a car you can't afford, simply because you're upside down, is not logical.

 

[Malak]

I can't sell it for how much I owe, and I can't pay the difference, so it's a moot point. The car is stuck. Since my mom co-signed, and I don't want to involve her, I'm considering simply filing for the rest of my debt, which would certainly help. In a couple years I'll have the car paid off.

 

[StageLeft]

Can you not get more credit card credit to help cover it? I've actually bought a couple of cars on credit and they worked out very nicely for me.

 

[Malak]

Originally posted by: Skoorb
Can you not get more credit card credit to help cover it? I've actually bought a couple of cars on credit and they worked out very nicely for me.

You mean like get a credit line to pay the difference and sell the car?

 

[StageLeft]

Originally posted by: malak

Originally posted by: Skoorb
Can you not get more credit card credit to help cover it? I've actually bought a couple of cars on credit and they worked out very nicely for me.

You mean like get a credit line to pay the difference and sell the car?

That, or if your interest rate on your card is not that high, simply ask for a credit increase, then sell the car and cover the difference on the card. If your car is worth a lot of money and you're in financial trouble you need to offload it.

 

[Malak]

Originally posted by: Skoorb

Originally posted by: malak

Originally posted by: Skoorb
Can you not get more credit card credit to help cover it? I've actually bought a couple of cars on credit and they worked out very nicely for me.

You mean like get a credit line to pay the difference and sell the car?

That, or if your interest rate on your card is not that high, simply ask for a credit increase, then sell the car and cover the difference on the card. If your car is worth a lot of money and you're in financial trouble you need to offload it.

The only problem with that is, my primary job requires the car. Losing the car, I lose the job, thus all income. Unless I can get this other job, I'd be in even worse condition

It's a sad story really.

 

[Mayfriday0529]

Originally posted by: rahvin

Originally posted by: PingSpike

Originally posted by: Jnetty99
my mom had to do Bankruptcy for my grandfather after he died. Companies like Sears were after the money even after he was dead and they wanted to make my grandfather children pay the debt, it was a very annoying experience.

I still don't understand HTF they can do that?

They were after the estate, the children probably didn't want them to get a piece of the house or something so bankrupted him.

No estate, the only thing that my grandfather owned was his truck that he used for work. his children including my mom didnt get anything.

 

[Nutdotnet]

Originally posted by: malak

Originally posted by: Skoorb

Originally posted by: malak

Originally posted by: Skoorb
Can you not get more credit card credit to help cover it? I've actually bought a couple of cars on credit and they worked out very nicely for me.

You mean like get a credit line to pay the difference and sell the car?

That, or if your interest rate on your card is not that high, simply ask for a credit increase, then sell the car and cover the difference on the card. If your car is worth a lot of money and you're in financial trouble you need to offload it.

The only problem with that is, my primary job requires the car. Losing the car, I lose the job, thus all income. Unless I can get this other job, I'd be in even worse condition

It's a sad story really.

How does your primary job require that car as opposed to a beater?

Sounds like you're making excuses.

 

[Malak]

Originally posted by: Nutdotnet

Originally posted by: malak

Originally posted by: Skoorb

Originally posted by: malak

Originally posted by: Skoorb
Can you not get more credit card credit to help cover it? I've actually bought a couple of cars on credit and they worked out very nicely for me.

You mean like get a credit line to pay the difference and sell the car?

That, or if your interest rate on your card is not that high, simply ask for a credit increase, then sell the car and cover the difference on the card. If your car is worth a lot of money and you're in financial trouble you need to offload it.

The only problem with that is, my primary job requires the car. Losing the car, I lose the job, thus all income. Unless I can get this other job, I'd be in even worse condition

It's a sad story really.

How does your primary job require that car as opposed to a beater?

Sounds like you're making excuses.

I'm not making excuses, I don't care 2 cents about my car and would take a beater. But there's just no chance I could do what he's suggesting. The biggest credit line I could probably get is 2k, I'm upside down more than that.

 

[Electric Amish]

Yes. My wife and I filed when she became disabled.

 

[Freejack2]

Let me guess you've got a domestic?
I'm $2900 and change from paying off my car and until this month I had negative equity in my car. Technically if I went to trade it in I'd still have negative equity as with the miles I have on my car means a dealer won't give me KBB Trade-in, only Auctionet average value which is $1800. Even by the time I trade the car in around August I'll only have about $300 positive equity unless I sell it private party.
I love this car and it's reliability makes a Toyota look like junk, but because it's a domestic it's resale value quite plainly sucks.

Unless I miss my guess your car is probably flipped around 4-5 grand? I'd say give credit counseling a call, they can work you up a plan which may help you a lot. It's no charge and you're not obligated to take their plan.
If you can stave off the bankruptcy within a few years you'll have your credit back in order and instead of looking at car loans that are 3 to 4 times the interest rate and home loans that are 50% or more higher interest rates, you could be looking at 5-6% interest car loans and home loans maybe only 1/2 a % higher than perfect credit interest rates.

You may save money now, but odds are in the long run that bankruptcy will cost you far more than you filed for.

 

[Malak]

Originally posted by: Freejack2
Let me guess you've got a domestic?
I'm $2900 and change from paying off my car and until this month I had negative equity in my car. Technically if I went to trade it in I'd still have negative equity as with the miles I have on my car means a dealer won't give me KBB Trade-in, only Auctionet average value which is $1800. Even by the time I trade the car in around August I'll only have about $300 positive equity unless I sell it private party.
I love this car and it's reliability makes a Toyota look like junk, but because it's a domestic it's resale value quite plainly sucks.

Unless I miss my guess your car is probably flipped around 4-5 grand? I'd say give credit counseling a call, they can work you up a plan which may help you a lot. It's no charge and you're not obligated to take their plan.
If you can stave off the bankruptcy within a few years you'll have your credit back in order and instead of looking at car loans that are 3 to 4 times the interest rate and home loans that are 50% or more higher interest rates, you could be looking at 5-6% interest car loans and home loans maybe only 1/2 a % higher than perfect credit interest rates.

You may save money now, but odds are in the long run that bankruptcy will cost you far more than you filed for.

Any recommendations on credit counseling firms? I've heard of several. I'd like to see more info on them too, like how it works. The idea here is to fix mistakes, not make more, so whatever can help me and not hurt me is best.