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Bankruptcy: What to do
Dyrwen66
the other's insaneDenver CORegistered User regular
the other's insaneDenver CORegistered User regular
Heyo. I'm considering bankruptcy and will probably go through with it one way or another, but I've never done it before and my mom last did it a long time ago, so things have changed.
Situation:
I'm 23 and graduated college last June. As 2008 progressed, I got laid off, worked two jobs briefly in the summer, survived my wife and myself on one job wherein I worked 20 hours a week from June until September. In that time I built up a fair amount of credit card debt alongside debt I was in the process of paying off, before getting laid off. During this time, I also was paying for a car payment which my mom used to be paying for, but handed over to me, since she also had job problems and her own shenanigans. Essentially I fielded a few late payments, paying bills after 3 paychecks, a half-month late, and trying desperately to make sure the rent got paid too. Around October, I got a full time job in Seattle, when I lived in Olympia. I commuted via car for 4 months until I could find a place to live up there.
I've since had my car repossessed a month after I moved to Seattle, because it was impossible to continue making payments on it My credit card isn't too far up there, but its not being paid has created a far amount of back payments that just add up over time. I've also got a stupid timeshare property (I know...) that would have been easy for my wife and I to pay off, had I not also lost my job a month after getting it.
The Bills:
My car has been sold, by the dealer, and I owe 11,000$ on it. The credit card is around 4,800. The timeshare about 11,000 as well. All in all I'm around 28-30,000$ in debt. Even if I somehow merged them all into a single loaned payment to work off, I could only afford $200 a month in payments towards paying it off, and that's even pushing my limits of survival as it is. My wife has been unemployed for almost 4 months, so I'm really looking for options to eliminate my debt as quickly as possible, whether my credit suffers or not, so that we can move on and try to pay off our student loans and rent with food to spare.
The Process:
I'm currently saving 40-60$ a paycheck towards buying a lawyer for bankruptcy, but I'm wondering are there free options to get this done? Do lawyers work on Saturdays, since I work during the week 8-5 and can't afford time off, obviously.
So that's my situation, I wonder if anyone in the Seattle area, or law-school types, might know where I should go from here, or what lawyering services to stick to at my current income level (round $11,000 a year), since I know sometimes there's low-income freebies in this sort of situation at times. Thanks.
Situation:
I'm 23 and graduated college last June. As 2008 progressed, I got laid off, worked two jobs briefly in the summer, survived my wife and myself on one job wherein I worked 20 hours a week from June until September. In that time I built up a fair amount of credit card debt alongside debt I was in the process of paying off, before getting laid off. During this time, I also was paying for a car payment which my mom used to be paying for, but handed over to me, since she also had job problems and her own shenanigans. Essentially I fielded a few late payments, paying bills after 3 paychecks, a half-month late, and trying desperately to make sure the rent got paid too. Around October, I got a full time job in Seattle, when I lived in Olympia. I commuted via car for 4 months until I could find a place to live up there.
I've since had my car repossessed a month after I moved to Seattle, because it was impossible to continue making payments on it My credit card isn't too far up there, but its not being paid has created a far amount of back payments that just add up over time. I've also got a stupid timeshare property (I know...) that would have been easy for my wife and I to pay off, had I not also lost my job a month after getting it.
The Bills:
My car has been sold, by the dealer, and I owe 11,000$ on it. The credit card is around 4,800. The timeshare about 11,000 as well. All in all I'm around 28-30,000$ in debt. Even if I somehow merged them all into a single loaned payment to work off, I could only afford $200 a month in payments towards paying it off, and that's even pushing my limits of survival as it is. My wife has been unemployed for almost 4 months, so I'm really looking for options to eliminate my debt as quickly as possible, whether my credit suffers or not, so that we can move on and try to pay off our student loans and rent with food to spare.
The Process:
I'm currently saving 40-60$ a paycheck towards buying a lawyer for bankruptcy, but I'm wondering are there free options to get this done? Do lawyers work on Saturdays, since I work during the week 8-5 and can't afford time off, obviously.
So that's my situation, I wonder if anyone in the Seattle area, or law-school types, might know where I should go from here, or what lawyering services to stick to at my current income level (round $11,000 a year), since I know sometimes there's low-income freebies in this sort of situation at times. Thanks.
Just an ancient PA person who doesn't leave the house much.
Dyrwen66 on
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Hope you never want to get a car again.
As well, something to note, he's considering bankruptcy partly because his mom's done it and hasn't had any trouble buying cars or houses since. This is part of why he thinks it's ok. This was, as he mentioned, a few years ago. Have things changed drastically for bankruptcy policies/laws in, say, the last 10 years?
I've already told him to really think hard about it, since bankruptcy's nothing to take lightly (many repetitions of 'it'll screw your credit'), which is part of why he's posting here. I'd recommend that rather than saying 'dude, it'll fuck up your future' give details, give legal advice, give links to places with details and legal advice. He knows it'll screw him over, but he's in a tight spot and, truthfully, bankruptcy is an option.
Oh, and I'm his wife, which is how I know all these things.
Face Twit Rav Gram
Well, I'm not american, but I suspect that laws will be revised relatively soon, and in the future banks will be way more careful who they will give the credit / loans. We had bank crash similar to USA here at Finland in 1989, and lots of people found themselves stuck in permanent credit limbo after bank system was revised.
If he wants legal advice he should see a lawyer. The advice of people here is get another job, not declare bankruptcy and try and work something out with the people he owes. This is good advice, sorry if that's not what you want to hear but that's their advice.
And I agree with that consensus.
The internet is not a great place for legal advice to hang the rest of your life on. Is there a US version of the (UK)Citizen's Advice Bureau?
Can you sell your timeshare?
But make sure you talk to some professionals about it. I would recommend places to look, but I don't really know any. Certainly talk it over with a financial adviser or a bankruptcy lawyer or such. Don't just do it on a whim. Maybe your mother knows some people you could look to for advice.
Here are some good videos from the source: http://www.uscourts.gov/video/bankruptcybasics/bankruptcyBasics.cfm
Bankruptcy is the last possible option, so before you even consider doing that I would urge you to canvas all of your options:
1) Family and friends loaning you money - yes I know its not a good option, but its better than bankruptcy;
2) You seem to have 3 large debts, this means that you may be able to work something out with each stakeholder - ie a reduction on payments or lengthening of the repayment term (which would have the same effect). Remember, if you go bankrupt they are extremely unlikely to see a tenth of their outlay, so its in their interests to deal with you;
3) I know nothing of the timeshare contract, but you need to look at it closely and see if there are any options...
4) Normally I would scream 'debt consolidation mortgage' but to be honest I don't think you would qualify (as even a cursory examination puts your secured assets and servicing capability in the red zone). If you were somehow able to get one it would help immensely though - your family going guarantor might be one way.
Bankruptcy is truly a last resort. You should seriously try the above before throwing the towel in.
People who declare bankruptcy here have to go through a 5 year period where every single penny they earn that isnt spent on food and shelter has to go to your debtors so if your thinking that declaring bankruptcy will get them off your back then think again. Its a really crappy way to live for 5 years with literally no money.
There are other things too that may or may not affect you but if you do this you will legally be banned from owning a business or being a CEO of a PLC. It also means that no bank will give you a loan and no credit card company will take you on for many many years perhaps not ever.
Bankruptcy is the final final resort for good reason as it is essentially condemning you to live out of the cash you have in your pocket forever. It is not a get out of jail free card by any means and personally I would do just about anything I could to avoid it.
If you are set on this course of action however carry on doing what you are doing, continue saving what money you have and go see a lawyer.
I haven't made use of their bankruptcy forum, and hopefully never will, but their credit forum was a huge help when I had some debts showing on my credit reports that weren't mine.
Yeah, this. Whether you declare bankruptcy or not, I would recommend finding some kind of financial system to live by. Even when you get yourself out of this hole you have to realize that it is not the end of your money problems unless you totally change the way you approach your finances.
I recommend you both work hard and pay it off. It won't be easy but it's not an insurmountable dept.
As others have said, talk to a lawyer. Bankruptcy is serious business and has serious life consequences.
Also your wife should be trying to get whatever kind of crappy part time job she can for the time being
(waitressing, starbucks, whatever), because you guys need all the help you can get crawling out of this hole. $16,000 in yearly income and $30,000 in debt is no place to be.
Do you have a car at all now?
There's more to bankruptcy then bad credit, I wouldn't envy trying to get a job that pays more than $10/hour in this wonderful economic climate with a bankruptcy on my credit.
1) Stay on your credit for 7 years. That's a long time. With lending restrictions and more and more servicing pulling credit this isn't exactly a breeze.
2) The way a restructure (13) is now written, you will end up paying more each month than you are obligated to right now.
3) Chapter 7 could work, as it's a liquidation. #1 still applies.
Your best bet IMHO as someone who does credit and mortgage counseling for a living is to contact your creditors and see if you can come to an agreement. Lates reported on a credit report go away a lot quicker than a Bankruptcy which will probably not help in the long run.
Chapter 7 is a possibility if you want to liquidate.
EDIT: Bk. laws have changed in the last ten years. Read up. It is no longer a "reset" button, and is, now, in fact the opposite.
1. Can your wife not get a 2nd job within walking distance? Anything is fine - burger king, McDonalds, Starbucks . Anything that pays minimum wage (temp agency) would be an AMAZING help.
2. Even if you declare bankruptcy, some debt is non-dischargable (psuedo-legal term) as in it CANT GO AWAY. Such things like certain hospital fees, student loans, executor fees, etc. The timeshare may qualify - I dont know, but either way if you go chapter 13 it will only be a repayment plan and a chapter 7 (complete liquidation) is harder to get and a giant black mark on your record.
3. Seriously, have your wife get a 2nd job and deal with each individual creditor. Call the bank that you owe for the car loan and tell them that they will be getting 5 cents on the dollar if you go bankrupt, or they can get 30 cents on the dollar if they settle with you.
4. Go get OpenOffice or some excel program and MAKE A BUDGET. Stick to this budget like your life depends on it - because it does.
5. If you still want to go bankruptcy route - see a lawyer, most give free consultations that will give you information for free in exchange for being advertised by the State Board. If you want them to DO anything - it will cost you, but usually information is free.
6. As you work M-F 9-5, have your wife call the lawyers as most dont work Saturdays.
7. Good luck man, you made some unwise decisions, but you learn from your mistakes. Get this settled and crawl out of this hole.
i mean holy hell... you can make $100/week easy just by walking dogs for people outside of your job
I've had her applying to any and all jobs for the past four months. She's applied to Wal-Marts, dishwashing positions, office jobs, grocery stores, etc. She doesn't have much consistent experience I guess, but in any case, she's been failing at getting hired for months now. There were 30 people applying for a dishwashing job down at Pike Place, so it looks like the job market in Seattle/Bellevue is remarkably over populated. More of a question for her, but all I've been able to do is get her to keep applying. Nothing but interviews and failure so far; well aware that her having a job would solve 90% of my money problems. Her lack of a job is the main reason I'm just looking towards a possible blank-slate of my last 3-big-bills that won't go away anytime soon, because the minimums to keep these bills away is already enough to starve me to death.
Aye, I know the black mark won't go away. I intend to rent in any place I move to for a long while thereafter. I managed to find a place to live in Seattle with shitloads of backpayments on credit cards and regular bills, but even that was only through a landlord who was willing to take a risk. It isn't going to get any easier in the future, bankruptcy or not, with a car repossession working against me as well.
I got a good budget working now. I used to have one, but when I got sorted with a car payment I didn't expect to have to pay, my plans were effectively null. I made $800 a month and had 735$ in rent, plus $400 in a car payment. I had a few months where relatives helped out, but ultimately I needed a viable plan.
So I planned to move, give up my car in favor of the bus route, and work towards something new with a better job. Got a job up north, now I make $1400 a month after taxes, have no car, and $725 rent. I'm still paying student loans, but with a bus pass I can at least afford to keep my wife and I fed. I'm inside a budget, and the only thing outside of it are the three-big-bills which are tricky to pay off.
I'll have to have her do that, seeing as bankruptcy affects both of us at a credit-level; although we don't share bank accounts.
@Docken, It is a fairly large amount of money, but I may have to talk to my grandmother about this before going through with it. She's paid for my college, and saved me monthly with food and bill payments before... although this amount of debt is a bit bigger than she'd normally help out with. I think I'll have to look into talking to a lawyer, or at least having my wife do it, and finding out how long it'll take, if it's possible with my types of bills, and what it would cost. After knowing that, I can go to my grandparents with some knowledge of the alternatives open to me if they say no.
Thanks for the help.
Try fast food places as well.
If there isn't a job there make one, advertise as someone said to be a dog walker.
Satans..... hints.....
Call your collectors. Your car debt has probably already been forwarded to a collections agency. Collection agencies will work with you. They don't want you to do Chapter 7, because it's their dick in the wind. They buy that debt from the bank, and basically its a gamble on if they will ever collect. If you go Chapter 7, they lose big, and they know it.
For a sum that large, it might be a little hard, but if you at least throw them a bone, explain to them your problem with employment and pay something like 50 bucks a month, they will not default you. Then when you get on your feet, you up the payments and/or save up something like 50-60% of the sum and offer a payoff, then your 11k debt becomes 6k.
we also talk about other random shit and clown upon each other
If you are going to go to family members to help you out either with a loan or whatever work out a plan of how long it will take for you to pay them back and present the budget you have for your expenses also.
Also if this will be money of their own they will be giving you offer to pay interest for what they loan you.
If they are family most likely they will decline that but it will show that you know this is an inconvenience to them to help you and are offering something extra in return, but depending on your family they might rape you worse than a bank for interest but its something to consider.
The only places that take plasma in the Seattle Tacoma area are only looking for those with recent vaccinations for anthrax and some other exotic stuff so probably like military personal I guess. that was a few months ago when I looked though.
Basically, man, you have three options: 1) declare bankruptcy, be fucked for life in terms of credit, 2) go back to school for the duration of the recession and take more student loans, or, get into grad school and live off your stipend, or, 3) join the military.
If you have a university degree, joining the military as an officer will get you relatively high, stable pay, plus a big fat signing bonus that you can use to pay off your debt. Yes, the military is a scary, crappy place to have to turn to, but you can effectively get rid of your debt through the signing bonus alone and have a sweet paying job guaranteed to you for ~4 years, possibly longer.
I think this is your best option, since even if you do go back to school, you won't be guaranteed a job after that, especially if you are studying something more relevant to the academy than the workforce.
They both seem smart, good communication skills... is the job market just that fucked? What is it that is setting off alarm bells in prospective employers? It's something. I mean sure, this story flashes all kinds of 'i am unsettled and unstable and virtually incapable of long term self-care' impressions, but that's a privately admitted thing, and hopefully not on a resume anywhere.
Something is hindering real, forward progress. It's something innate to thier lives but only indirectly related to this specific situation, it's something long term, and its not being addressed- not here anyway.
Meh- financial advice. Not my forte. Seems like bankruptcy may keep the wolves from coming inside, but they stay at the door, howling for a good long while. It does seem to be a sort of artificial authoritative self-discipline excercise though, so maybe it's the ticket. Really though, until the root of the issue is dealt up, everything is just going to be a delay of the inevitable. Or so it seems.
the living expense of that place is insane to say the least, you've gone to school, you should not be making <10 an hour to start with, add it to the fact that you're living in one of the most expensive places... yeah...
unless you absolutely need to stay there for some reason other than sentimental (probation etc.) move...
I'm sure there are at least 20 different places around the US that offer a job for whatever you majored in that pay a lot more than 10 dollars an hour. some of these places (depending on the field) will also cover moving costs
edit: what's your major?
Also, Dyr's focus was Creative Writing, though technically he's got his BA in Liberal Arts since he went to Evergreen.
Face Twit Rav Gram
Perhaps you're more replying to saggio's suggestion of the military, which arguably isn't that bad of an idea. I personally abhor the military, but might've chosen that officer-route in something computer related if I had had more time to choose. I took my current job because I was looking for a full-time job for more than 8 months, and part time wouldn't cut it. To saggio, as well, I can't afford to live if I tried grad school right now since I would need my job; I guess I could do night classes, but ultimately, I just don't have any good ideas as to what I need my creative-writing degree to evolve into right now. In a year or two I have a possible business to start up with a friend of mine, which he is funding wholly, but right now it's just easier to work at my current occupation and figure out how to manage my debts and life.
Chuck, my degree has some potential use in random advertising fields, but they usually want prior experience. I'm more of a fiction writer, which is of no use to anyone, but in either case I'd need further education to become a teacher, or something more specific in the future. Right now though, that's at least 5 years away after I've had time to detox from the last 18 years of school and 4 years of college.
Before you do anything like this figure out what kind of partnership you would have. The last thing you need is being liable for a failed business on top of bankruptcy.