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Have you ever filed for bankruptcy?

I have so much debt and mailing $100.00 out of each of my checks is not putting a dent in my $13,000 in collections. At first I thought my mid to late 20s are to pay off the mistakes of my early 20s. All this being a constant reminder of my ex husband who had cost more to take care of than our two children in diapers (at the time). I believe it'll take much longer for paid and unpaid collections debts to fall off than the 7 years of bankruptcy. It turns out some debts can get court orders to stay on again as if to be "renewed". Sometimes paying off collection debts make them appear as new negative credit lines.

So I was wondering if out of my tax return, I should pay $3,000 of the $13,000 in collection debt off or spend $1,500-$2,000 to file for bankruptcy.

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Anonymous

Asked by Anonymous at 10:12 PM on Jan. 21, 2011 in Money & Work

Answers (7)
  • You would have to talk to a bankruptcy attorney and see if you have enough debt and the right kind of debt to file. I filed 8 years ago and most of mine has already fallen off my credit, the rest will be within 2 years. I did the right thing for ME at the time. I was able to reestablish credit after the bankruptcy. Consultation visits are free.
    tyfry7496

    Answer by tyfry7496 at 10:18 PM on Jan. 21, 2011

  • We filed for Chapter 13 bankruptcy 3 years ago. They helped us lower the debts and set a payment schedule for us to pay them off. The bankruptcy payment was expensive. Now, my husband had to take a lower paying job and I wrecked the only car we had which is on the bankruptcy. At this time we only owe for unsecured debts (medical, taxes, credit cards) and are going to have change over to a Chapter 7. I don't believe if I were you I'd file bankruptcy for $13,000 of debts. I would contact the debtors and ask about settlements or working with you to pay them off some how. Let them know that you want to do this instead of filing for bankruptcy. Be very careful of a debt consolidation company helping you. We got scammed by one right before we filed.
    remomingit

    Answer by remomingit at 10:20 PM on Jan. 21, 2011

  • I filed a Chapter 7 in 2005 and at the time, considering the circumstances of my finances, it was the best thing I did for myself. And, if you get a small credit card a year or so later, you can build up your credit. I got approved for financing at 5.74% for a brand new Jeep on Monday and my credit score, even with the bankruptcy still active, is a 711. My financial situation has changed since the filing, but the loan officer at the dealership was impressed at how well I have built up my credit.
    Izsarejman

    Answer by Izsarejman at 11:52 PM on Jan. 21, 2011

  • My dad filed last year, but he had 90,000 in debt... so for him it was a very smart decision, and he's already started building his credit with a prepaid credit card. I don't know that I'd file for 13,000 in debt, but I don't know your situation personally, so it can't hurt to talk to a bankruptcy attorney
    ba13ygrl1987

    Answer by ba13ygrl1987 at 11:59 PM on Jan. 21, 2011

  • We looked into filing this past year, and though we have a lot of debt, about $22,000 total, they would only cover $10,000 of it in a chapter 13 because of the types of debt we have (unsecured loans, etc). To consolidate (not erase) that debt, our payments would have been almost $500 per month, and another $2000-$3000 in fees for filing. Which was only saving us $200 per month in payments. It sometimes doesn't make sense to file bankruptcy unless you are wanting to file chapter 7 to have all the qualifying debts erased, but at that point you are looking at having to possibly "sell" back a lot of your stuff. Like for us, our car is considered "too expensive". It didn't all make sense to me, but that is what I understood from our free consultation. Hope that helps you a little bit.
    AprilDJC

    Answer by AprilDJC at 1:22 AM on Jan. 22, 2011

  • I have over 25k in debt and 13k of that would be able to get erased. The 13k may grow another 2-3k for medical debt that has yet to it my report. I have starting contacting law firms.
    Anonymous

    Comment by Anonymous (original poster) at 11:52 AM on Jan. 22, 2011

  • Wow that's hard.

    If you are going to file for bankruptcy then put it all in. Don't hold on to any debt including car debt. Of course you probably already know that student loans, back taxes, and child support aren't bankrupt able. So you'll have to find a way to pay for those.

    I would recommend going to the library and borrowing the book Total Money Makeover by Dave Ramsey. If you are super behind on these bills you might be able to settle with them for pennies on the dollar.

    So say you owe $5000 on a debt call them up and see if they'll accept $1000 as payment in full. Get it in writing, no electronic access to your checking account. You'll have to keep a copy of their letter and proof that you sent a cashiers check and that they got it for the rest of your life- but it could be done.

    Dave's book will explain it in more detail. If you can pull that off, it's better than filing for bankruptcy.
    Erica_Smerica

    Answer by Erica_Smerica at 5:11 PM on Jan. 22, 2011

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