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Posted: Tue Apr 15, 2008 12:13 pm

I'm really starting to consider filing for Chapter 7, but I need some advice. My husband and I have about $10,000 (or more) in unsecured debt, $20,000 in student loans, and $15,000 in car loans. Since he lost his job, the unsecured debt has had to go untouched and I'm starting to get some really harassing phone calls and lawsuit threats. We rent our home right now, and with the economy and our credit scores, that isn't going to change anytime soon. When you file Chapter 7, what does that include? At this point, the unsecured debt is all I'm worried about. My loans are in deferrment and the car is being paid.

Posted: Tue Apr 15, 2008 2:13 pm

cdollar -

A bankruptcy attorney will need to sit down with you and determine if you qualify to file for Chapter 7.

However, with a Chapter 7, any and all assets are up for grabs (subject to state-allowed exemptions, which vary from state to state - again, an attorney can go over that with you), and the bankruptcy trustee is legally obligated to sell anything outside the exemptions to pay back part of your debts prior to discharging them.

Your home is not up for grabs if you are only renting, not owning. But any "excessive" assets (boats, vacation homes, property you don't live on, extra cars, campers, expensive jewelry or furs, etc.) are subject to sale by the trustee. But chances are, if you're qualified to file for Chapter 7 through the means test performed by your attorney, you won't have any of those excessive assets anyway.

Talk to an attorney before making any decisions. Most of them offer a free initial consultation. Write all your questions down before you go into the consultation so you get all the answers you need to make an informed decision. Bankruptcy is a major, life-altering decision, and will affect your credit for a very long time.

Posted: Tue Apr 15, 2008 4:49 pm

That is great advice from Suebee Very Happy

Start with an attorney as she recommended.

And just fyi, student loans are typically not allowed to be discharged through bankruptcy so you might be stuck there, and since the car loans are attached to property (the car), you would have to reaffirm and keep paying in order to keep the car.

Posted: Tue Apr 15, 2008 4:51 pm

It is almost next to impossible to have student loans discharged in BK. Get them into deferment if you have not already done so.

Posted: Tue Apr 15, 2008 5:14 pm

What types of things are exemptions? We don't own anything of value.

Posted: Tue Apr 15, 2008 6:19 pm

cdollar -

again, this is a question for a bankruptcy attorney, because the exemptions vary from state to state. A certain amount of equity in one's home is exempt, I know that much. The best thing you can do is to write your questions down and take them to a bankruptcy attorney.

None of us here are bankruptcy attorneys, and though we have quite a bit of personal experience with debt, credit, bankruptcy, payday loans, etc., nothing can take the place of advice from an attorney in this case.

Guest · Posted: Wed Apr 30, 2008 1:16 am

charge off the credit card debts pay the student loans when you can and let them repo autos you are defaulted on dont give a tick about credit for about 5 years yours is ruined for the time being they cant take anything if you curently dont have anything as long as you dindnt intentionally defraud you are ok

Posted: Sat May 03, 2008 7:56 am

The guest post above me certainly sounds easy but it is not. Yes, eventually your CC's will be charged off and everything will seem quiet. Doing nothing about the situation will just prolong the inevitable.

You will continue to get calls and letters. They will stop and months later when your account is sold to another debt buyer-you will go through it all over again. This process will continue for years. That is just creditors. The car loans will be the same thing.

Now the student loans are in deferment-that is a good thing. Those from what I know can not be included in BK.

I do not know your financial situation but 10k in credit card debt can be tackled. Part-time jobs, selling stuff ANYTHING. At this point if you are not paying credit cards, you can try working out a settlement plan for less than what you owe. Creditors will most likely accept. So if you can settle 10k for let's say 4 or 5k (maybe less) and get them to spread it out in payments-that would be great. Then again, you must be able to come up with the funds to settle.

If you are under financial stress and need any money just to make ends meet-well then the above is not an option. I am in a similar position but I owe a lot more. I am in the process of filing Chapter 7. Sometimes you gotta do what you gotta do. The best option is to not file but if you have exhausted your options, filing is definitely the way to go. It is not the end of the world.

As far as exemptions, it sounds like you own nothing right now so you should be OK. The above post was right on that-if you have nothing they can't take nothing BUT later on when you do decide to buy a home or somehow come into some type of money-there can be judgements and such and everyone will be after it. It will be an ongoing cycle.
Talk it over with hubby and go over your options-we have had many and came to the BK conclusion. Talk to an attorney and see what your options are. Most consultations are free.
Best of luck with your journey![/code]

Posted: Sun May 04, 2008 11:46 am

Wow girlndebt can they really come back later on once your debts have been discharged and you decided to buy a home or had money at that point and get judgements? I thought once your debts were charged off that was the end of it, if it was proven at that time you had no means to pay the debt.

Johnita

Posted: Sun May 04, 2008 12:24 pm

Any debts discharged in bankruptcy are forever gone.

Posted: Sun May 04, 2008 1:05 pm

Charged-off debts can definitely come back to haunt you. All may be quiet for a lengthy period of time, and then you may find yourself being served with a summons notifying you that you are being sued for a judgment on this debt.

But as Cajun said, the debts that you do include in bankruptcy are wiped out, and cannot be collected on in future.

Posted: Sun May 04, 2008 2:26 pm

Exactly- if you file for BK they can not come after you for those debts...BUT if you just let them get charged off-most of these creditors can and will come after you later on.

Posted: Sun May 04, 2008 3:11 pm

There's a big difference between DISCHARGED debts and CHARGED-OFF debts.

DISCHARGED DEBTS: These debts have been eliminated - legally - by bankruptcy, and are forevermore wiped off your records and are no longer owed.

CHARGED-OFF DEBTS: These debts are the ones your creditors have been hounding you to pay, and they have been unable to collect. After a certain amount of time where they try to collect from you (unsuccessfully), the creditor will consider it a bad debt and charge it off. They may go silent for a while and then attempt to sue you to get their money...or it may be sold to a debt collection agency who will attempt to collect it. That's where the "quiet period" described above comes in - between the time the creditor charges it off and the collection agency starts calling you, there may be a few months of relative peace and quiet. But it's a false peace, because the collection agency will pick up where the creditor left off and start attempting to collect from you once again.

jennygirl · Posted: Sun May 25, 2008 3:06 pm

I am in the process of filing ch7 bk. My questions is...What about the debts that are due to fall off my credit report this year? I have 3 pretty good size debts due to fall off my credit report Aug2008. And another 3 that should drop off in March2009. Should I include these in my bankruptcy? If I do, will they remain on my credit report for another 7-10 years? Please advise...thanks!

Posted: Sun May 25, 2008 3:37 pm

That is a tough one. Are you using an attorney? If so-definitely ask him. I know ours is pulling a credit report and is including all except for the car we are keeping (reaffirming).I would think you would want to include those just in case for some reason they pop up later in life. You know-junk debt buyers and fun people like that seem to come out of the woodwork when you move on with your life. Of course there is always the statue of limitations and all which I am not too familiar with. I am sure someone can offer better assistance. Good luck!

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