Can anyone give me some info on Bankruptcy??

[Electric Amish]

As many of you have read in the "Wife's Sucicide attempt" thread, my wife and I are on the edge in the financial department.

Not that I'm planning on filing, but I just would like some info before (if) we get into it.

Do they come and clean you out of your possesions to pay debts?

What if you don't owe money on the items?

Stuff like that..

thanks,

amish

 

[fdiskboy]

Normally, Elec Amish, they don't clean you out.

With any secured debts, you normally have to surrender the collateral.

Other than that, you get a certain $ amount of personal exemptions. Unless you have a lot of expensive personal possessions, normally you won't be forced to sell much. On the other hand, if you have a closet full of furs, you can pretty much kiss them goodbye.

Consult an attorney who specializes in bankruptcy. They will be up to date on the latest changes to the code and will be able to advise you on the specifics.

EDIT: Forgot to say, good luck! I've been in your financial position, and I know the situation with your wife only makes it that much more difficult. I'll say a prayer for you!

 

[ArkAoss]

uhhmmm my folks went thru bankruptcy, i dont remmember any body coming in and taking away stuff, um we did end up moving, i think the worst thing was he had no credit for like 6-10 yrs, main reason was in area we lived ALOT OF people had abandoned their houses (we were kind of a navy "base" town, and base slimmed up and also sub factory was cutting down production too) so our house lost value, my dad was going thru restrucuring at his job yadda yadda, but i dont think any body took our stuff away that i can remember

 

[Shack70]

A friend of mine just calimed bankruptsy...
He just added what ever he wanted to the list, a house and other bills in his case and then he had to put an ad in the paper and then goto court. No one came and took his stuff. The only thing I can think of was a cell phone company sent a collection agency after him and he sent the collector to his lawyer. He never heard from the collection agency again! It's now a few weeks later and not one problem, he is saving money and getting credit card app sin the mail everyday.
Personally I wouldn't do it, but it's for personal reasons. It really helped my friend out of big bind he couldn't get himself out of...

One other thing, this was in Pennsylvania. I am not sure if it works the same in all over the US!

 

[Russ]

Believe it or not, a bankruptcy is frequently less damaging to one's ability to get credit then a file full of late payments. This assumes that the record was clean up to that point, and that there is a specific event that caused the filing.

Russ, NCNE

 

[Tripleshot]

EA

You can get your credit back within two years.If you have credit problems now,you probably have bad credit. Bankruptcy will give you a new start.

The bankruptcy stays on your record for 10 years,you are elligable for buying a home in 3 years after filing and acceptance.

Get a lawyer. going price in Utah is $500-$750.

My wife works for Southern Utah Mental health.I worked in the IT dept and have had much contact with the councilers. We both advise you to seek counciling for this last incedent ASAP.It is a pay as you can afford deal,so do not sweat the bill for this.Thier are funds available to pay for the counciling you and your wife need. Take things slow and easy now. They can't eat you.It will work out.

Belive it or not,things can be much,much worse. You have much to be thankful for. A new begining is on the horizon. The councilers will help you put into perspective the direction you and your wife need to go in.

May God Bless.

 

[Windogg]

You'll be filing Chapter 13, personal bankruptcy. Get a lawyer since most of us are just armchair law people. Most of the time a repayment plan is organized to help you pay off your debt in a scructured manner. This is better than everyone swooping in at once. In fact bankruptcy is what prevents people from takeing away your possesions. It's mostly a myth that repo men show up at your door and take everything away. Bankruptcy doesn't mean you're broke or even financially ruined, it simply means your current debt exceed your ability to pay.

I hope it doesn't have to come down to it but best of luck. I'm happy to hear that your wife will be OK.

Windogg

 

[Total Refected Power]

There are many good sites on web for quick info. But hire an attorney. These things take about 3 minutes in front of the judge.

Basically, most people do it to clean out credit card bills. I think there are ways to even keep your house. Good luck.

 

[Double Trouble]

Amish, I've handled some bancruptcy stuff for a friend and I've done quite a bit of research on the matter. You can get FREE counseling on this kind of stuff, where they will go through all your options with you based on your assets and financial cituation.

Check out the Consumer Credit Counseling bureau (maybe it's a different agency in your state) and set up a time to chat with them. They will often even work with you and contact any potential creditors and set up payment agreements that will keep you in the clear without having to file bancruptcy.

There are many options available, but the details completely on your particular situation and your state statutes.

I agree with Russ that often times a bancruptcy can actually be better on your record than a pattern of delinquencies. There are also different options on Bancruptcy you could consider (chapter 7, chapter 13 etc). Once you've worked out your options, you can always go hire a lawyer to file.....

If you have any specific questions, feel free to PM me.

 

[CoolTechie]

my mom has been on the edge of backruptcy for a while now.. The thing is, she lied on her credit application (like 10-15 years ago) and said she was working someplace she wasnt. She realizes this is illegal and is not sure what to do about it now. Am I right in assuming that they will review her employment history and all that when/if she files???

also im in MA and if anyone has some useful links, it would be appreciated... thanks

 

[Tripleshot]

. Am I right in assuming that they will review her employment history and all that when/if she files???

Highly unlikely, IMHO. It has no merit on filing for relief under bankruptcy statutes.

 

[AndrewR]

tagej hit it right on the head, or you can go straight to an attorney if there's one you know from reliable reputation or referral.

My father had to file bankrupcty awhile ago from a failed business after his wonderful business partners stuck him holding the bag when the company went under. One thing he did which turned out to be quite wise was to zero out his credit cards so that when the bankruptcy went through, he retained those cards and could still use them (no credit limit increases though). Once you file, you'll likely be ineligible for any unsecured credit cards until that's off of your credit report in 10 years -- having one card available will help until that happens. Also, you might consider transferring your assets to either your wife or yourself and having the one NOT holding assets declare bankruptcy to protect them. My father did that, too, though I'm entirely sure it mattered (may have been a consequence of his being related to a business debt so the house may not have been safe). Once again, an attorney can give you advice on strategy in that regard.

Good luck.

 

[Frenchie]

Get a lawyer since most of us are just armchair law people

Hey some of us lawyers have armchairs....


EA: YGPM

AnrewR:
Also, you might consider transferring your assets to either your wife or yourself and having the one NOT holding assets declare bankruptcy to protect them.

Ever hear of Fraudulent transfer of assets to avoid creditors? Unless the transfer is for valuable consideration or done WELL before the bakruptcy, it will be undone by the bankruptcy court AND it may be a criminal offense.

Very good point on the retaining credit cards with a zero balance...advice I often give. You may lose the cards when they expire though.

CoolTechie:

Fraud is a basis for non-dischargability of debt. If the creditor files a proof of claim and disputes the dischargability, it is very likely to not be dischargable.

tagej: Credit counseling is good for those with low debts and the chance of getting out from under them in the short term. Based on the little info provided, Bankruptcy is probably the better option.

Windogg: Why go Ch. 13 if Ch.7 is available? (Assuming there arent a ton of assets...)


And dont worry about your credit, an attorney can line it up so most or all of your assets are exempt and your credit will be back on track in about 2-3 years or less.

 

[Windogg]

Hey Frenchie, forgot you're a lawyer. I think it's great of you lend a helping hand. as for 7 vs 13 I guess that's why I told EA to get real legal advice. I'm just a techie with 4 years of busniess law and no other experience.

Windogg

 

[snow]

And under Chapter 7 you get a general discharge of all of your debts (except for educational loans, fraudulent claims, and some others) Some states have a homestead/home exception. Also note you get an automatic stay on the payment of your debts as soon as you file. Another thing you should watch out for is if you have a loan and someone else cosigned/guaranteed it, the bank can still go after the other person if they have not declared bankruptcy. Finally, Frenchieis exactly correct as to fraudulent transfers.

As always, SEEK A LAWYER

Good luck

 

[Russ]

<< Once you file, you'll likely be ineligible for any unsecured credit cards until that's off of your credit report in 10 years >>



Not true. In 1982, I declared bankruptcy after a disastrous divorce, including all the credit cards she had run up. By 1985, I had a wallet full of new, unsecured cards. By 1987, I bought another house.

There are many other factors involved in the ability to get credit after a bankruptcy. It is only one consideration.

Russ, NCNE

 

[Electric Amish]

Thanks for all the advice. The only things that I have of any value are:

House
'94 Ford Probe (Owe ~$4500)
'96 Ford F150 (owe ~$16000)
Big Screen TV
VCR
DVD
Receiver w/surround sound
DSS System
My computer

The only thing I owe money on out of those is the DVD Player.

I have a Discover, and 2 Visa's that are maxed ($4300, $2500, and $5000).

I have a first and second mortgage on the house.

I would like to keep all of that. The vehicles to get to and from work. The house, since I doubt we could find a house any cheaper.

We'll see what happens in the next few weeks.

thanks,

amish

 

[urbantechie]

My dad told me even though your record is wiped clean after a cetain amount of years, many places/things won't trust you. He told me, they won't even let you rent a apartment (during or after 10yrs im not sure).

 

[Frenchie]

Believe it or not, some creditors prefer those that have filed bankruptcy, as they are a better credit risk. Think about it, who would you rather lend money to:

Person 1:
income - 40k
debts - 40k
no major assets
can file for bankruptcy at any time.

Person 2 (recently discharged from Ch.7):
income - 40k
debts - 0k
no major assets
cannot file bankruptcy for seven years.


EA:

Many states have a homestead exemption, so the odds of losing the house are minimal, especially if you reaffirm the mortgages. You can either return the cars or reaffirm those debts as well. The other assets (assuming no major trust funds, jewelry, etc.) will more than likely very neatly fit in to one of the many state or federal exemptions. That is where an attorney is very helpful.

As for the credit cards, the best advice would be to stop paying them right now if you are decided on banlruptcy. (I represent several of the major credit card companies.)

The effect on your credit will not be that much different between 1) filing ch. 7 , 2) attempting to settle accounts/consumer credit counseling 3) filing ch. 13. Either way, your credit is tarnished (for a short while), but with 7, you save a lot more money. If your assets wont fit into ch.7, or you need to reaffirm many debts, only then should you really consider ch. 13.


Edit: just to clarify one statment by snow. There are certain obligations which are non dichargable, such as fraud, debts owed to the government, support, et al. Student loans that are guaranteed by the govenment ARE dischargable, but the burden of proof is so high, that they are typically considered non-dischargable. (I represent some of the student loan companies.)

 

[SuperGroove]

My family is going through Chapter 7 right now. My parents are not allowed to have credit cards anymore, nor are they allowed to buy a car for a couple years. I have an aunt who cosigned an account with me, and that's how I got my debit card. I pay the bills with this...however money is short, so I need to find a new job since I worked for my parents.

The trustees took a hold of our store, and the courts said they would allow us only one car. Weird...but meh...

Bankruptcy is ripping my family apart

Oops.you asked for advice. I'd say find the best lawyer you can, trustees can be nasty.

 

[Frenchie]

They can seem nasty, but most are not. Typically they are so overworked, they do not have much time to spend on each case. However, the trustee gets a finder's fee (a %) of whatever assets he uncovers that creditors are allowed to get their hands on...so some of them can be quite nasty.

EA:

If you are going to file, you should probably do it within the next 3 months or so, as there are a number of proposed pieces of legislation which will make it a lot more difficult to file.