That is the question. Im going through a seperation/divorce and agreed that Id take over all my ex wifes credit card payments. All the debt combined Ill have to pay on us roughly $30k. My ex lost her job back in March 2017 so I forked out money for her car not to get repoed and for her house not to get foreclosed... fast forward to today and Ive lost my job, and cant afford to pay any of this debt.. I havent paid on any of this debt since June of 2017 and all my debt is in collections currently.... Should I file bankruptcy or try to wait it out until a job comes along and I struggle to make payments for the next 4 years?
Bankruptcy would be my last resort. I would negotiate with the creditors/collections, tell them the details of your situation and what you can comfortably afford to pay down each month. Tell them you wanted to make the monthly payments, but were unable to do so because of XYZ and they can either accept a little amount every month or you'll have to file for bankruptcy. I would try to use this to buy time to help get back on solid footing. I'm sorry you're going through this-
well schitte breh, so sorry you're going through this. i have no financial background/qualification, but i do want to wish you get back on your feet at the soonest. chin up!
It depends on your balance sheet once you get started with a new job. I would use bankruptcy as a last resort, especially if you're already in collections. Here are some suggestions to consider: 30k is a vehicle payment for 6 years. If you think you can pay this debt off in 7 years, I would consider that option. You can attempt to disavow the debt. If this is standard credit card debt, it could roll off your credit report after 3 1/2 years. If you consider the option, make sure you fully understand what you're doing...which is why I use the term disavow. The catch to this is that a judgement can be placed against you at anytime if the collection agency tries to take you to court. This is one of the reasons why its important to understand who owns your debt. Another thing you can do wait till your debt gets sold off to other collection agencies a couple times. Each time the debt is sold to another collection agency, your debt loses value to the collection agency. You may get fortunate to settle for a fraction of the value. Just keep in mind if you settle, there will be a tax liability for the outstanding balance. Research and pick a strategy. Do not attempt to mix up strategies. The last thing you want to do is get stuck on a payment plan and default on it. A middle of the road strategy is to ignore the debt, save up money over time and try to settle. ALWAYS tell the collection agencies you do not have money or very little, even if you're sitting on a a nice stack. If you have 15k saved up and you tell them this, they will push you to go borrow another 5k from friends or family. Its better to tell them you have a couple thousand and you really want to take care of this and your friends/family are willing to contribute. If you know your rights and have the patience, you can try to catch them doing illegal practices and get a legal injunction to have them forgive your debt. This is much harder to do of course. Regardless, research this. There is a lot of good information out there on this topic. Understand your credit is wrecked for at least the next 5 years.
the other thing to try and do is get a consult with a decent bankruptcy attorney, you should be able to get a basic overview of your options from someone who knows the law. I am also sorry to hear about your situation, good luck!
Depends on if you want to buy a house in the foreseeable future. Also employers night look at it depending on your profession. If you're a minority, declaring bankruptcy will crater your chances for a big loan. If you're below 30 and white...yolo... Boys will be boys... Work the American dream! ^5
Talking to a bankruptcy attorney is like asking a barber if you need a haircut. Bankruptcy attorneys do not make money finding other solutions. I only recommend talking to an attorney only after all other options are fully explored.
Lawyer up. But in meantime get your credit report and start researching and making deals with these collection agencies.
File bankruptcy while you have no income for the last 6 months. You will be streamlined for chapter 7. Waiting until you have a job is foolish.
No disrespect but this is likely terrible advice. First off he isn’t going to be in a position to pay off/pay down at this point. Second they can still pursue judgments against him and accrue interests on those judgments. Also judgments on your credit is worse than a chapter 7 bankruptcy. Further judgments are only removed with payment of the judgment amount. Chapter 7 is a very powerful tool. It isn’t used more often because a lot of people cannot qualify for a total liquidation under the income threshold or the means test. The fact he doesn’t have a job means he will qualify for sure. That means $30,000 of debt gone for about $1000 in legal costs. That is massive. Further he will rebuild his credit faster not having a massive amount of revolving credit and charge offs and debt. Start the 7 year window as soon as possible, foolish to wait.
If he hasn’t made payments in some time and has $30,000 in debt, then he isn’t going to be in a position to have suitable credit to buy a house anyway. His credit score is trashed regardless. Assuming he pays all the debt down in the next 3-4 years (and some how avoids judgments and interest payments) his credit will need another couple of years to be suitable to get a reasonable mortgage. After filing chapter 7, someone that takes the appropriate steps can get a mortgage in 2-3 years. Thus he can actually buy a home sooner.
2-3 years is amazing. Out of curiosity, that factors in great debt consolidation? I assumed you needed to wait for 7 to get taken seriously for a loan.
CC debt is usually un-secured debt so it's their risk just as much as yours. Having said that, best bet is to negotiate a settlement with each starting at .20 on the dollar. Trust me these collection companies pay even less to purchase your debt. I'm guessing you can settle from anywhere from .30 to .60 for every dollar. That puts you at about 9k to 16k of debt which is much more manageable and no where near enough to declare bankruptcy.
The key it all is taking the right steps rebuilding credit after bankruptcy. Primarily being getting a secured credit card and establishing a pattern of on time payments and then moving onto an unsecured credit card and making payments. Last an auto loan and making timely payments. Concerning getting a mortgage, even in the post 2008 environment, lenders want to loan your money, especially with collateral (repossession of the home). The rate you get won’t be as good as someone that has very credit but it will be acceptable and you can refinance after 4-5 years of timely payments. By that point the bankruptcy has fallen off the credit report. One of the biggest considerations lenders care about is the debt to income ratio of the borrower. So someone making minimum payments on a lot of near maxed out credit isn’t going to get a loan if the amount of credit outstanding is worrisome. After law school, I helped several friends and relatives file bankruptcy and learned all about it. I had to also investigate some of the more complex forms of bankruptcy to protect my law firm when establishing whether we would be an LLC or not.
I built my credit the way you described (creditkarma is solid for credit score knowledgr) abd I do have an LLC. Just wondering about bankruptcy in the event I say f' it all and start my own business.
i barely started on my credit so i don't know what i'm saying. but trump declared for bankruptcy once right? started from the bottom now he here.
