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I’ve overwhelming debt but my income is really low. However, my spouse has a decent earning. Can filing bankruptcy be a good option for you in the state of Florida?

Filing bankruptcy is not a good option. It will lower your credit score. If possible try to get help from your friends and family members.

Sub: #1 posted on Tue, 11/12/2013 - 20:28


Filing is never a good option if you’ve a chance to opt for other alternative debt relief options. If you’re financially strapped and there is no alternative, then filing bankruptcy can save you from the rogue collectors.

Sub: #2 posted on Wed, 11/13/2013 - 06:21

Renee Brown Renee Brown

(Posts: 18 | Credits: )

I personally tried debt settlement -- but I just had too much debt and ran out of settlement money -- I also had the IRS come after me for written off money from the cards that agreed to settle -- it is a personal decision -- one that I wish I made earlier -- but each person decides on their own -- I had three cases going to court by the time I decided to file -- I just could not take the harrasing anymore --

Sub: #3 posted on Mon, 03/03/2014 - 13:27

chrissyhen1 chrissyhen1

(Posts: 152 | Credits: )

I filed a Chapter 13 in 2006. I have a website that shows what I went through. But, I cannot post a link to it because I'd be tossed out of the forum (grin).

In my case, Chapter 13 was "preferable" to any kind of debt servicing plan. And my site explains why. There are dangers involved in trusting debt servicing plans. I was almost victim to one of those dangers. Filing Chapter 13 (at almost the last minute before I became a victim) saved my bacon.

Now, 9 years later, I have a credit score of 730. I also have 9 major credit cards - 1 DiscoverIT card, 3 MasterCards, and 5 VISA cards. Not bad for a retiree with only a $32k annual income. The cards, in total, give me credit equal to my annual income. All of them are unsecured with no annual fee. But, in total, my utilization rate on those cards is only about 5%.

Long story. My ex-wife considered credit as a means to enhance her lifestyle. I've always thought of credit like the handle on a fire-alarm - to be pulled only in the case of an emergency.

Sub: #4 posted on Fri, 02/13/2015 - 00:45

StillAlive StillAlive

(Posts: 2 | Credits: )

Debt servicing plan participation lowers your credit score just as badly as filing bankruptcy. The first people plans contact are creditors. And the first people they contact are the big 3 credit reporting agencies. Plan participation is considered an equal stain to bankruptcy in a creditor's eye. The difference is that bankruptcy notations on credit files have a finite time limit - 10 years from filing date for a chapter 7 or 7 years from filing date for a chapter 13. There is no court-ordered time-limit on notations from creditors of plan participants.

In addition, consumer debts written-off or forgiven by creditors have no income-tax implications for bankruptcy filers. The filing of either chapter 7 or 13 "proves" insolvency to the IRS.

From page 5 of I.R.S. Publication 4681, quote:

"Debt canceled in a title 11 bankruptcy case is not included in your income. A title 11 bankruptcy case is a case under title 11 of the United States Code (including all chapters in title 11 such as chapters 7, 11, and 13), but only if the debtor is under the jurisdiction of the court and the cancellation of the debt is granted by the court or occurs as a result of a plan approved by the court."

But under plan participation, debtors receive 1099c forms in the mail at the beginning of the year after write-offs take place. Those forms report "ordinary income." If creditors write off $10,000 in debt, the debtor has to report an additional $10,000 in ordinary income. You'd have to "convince" the IRS that you were insolvent on the day you began plan participation to escape these taxes - using form 982 and accompanying worksheets. But, there's no guarantee that the IRS would accept your explanation.

FWIW, bankruptcy filers "might" also receive 1099c forms in the mail. Usually they don't because it's considered a waste of time & paperwork by creditors. They'd have to put the letter "A" in block #6 of the 1099c form - which is the "event code" for "bankruptcy." And once the IRS sees that letter, the "income" reported on the form would be considered non-taxable.

Sub: #5 posted on Mon, 03/02/2015 - 00:30

StillAlive StillAlive

(Posts: 2 | Credits: )

Bankruptcy is usually a last resort and most people file it only if they have no other choice. While bankruptcy can possibly erase most debts completely, it creates a public record that stays on your credit report for up to 10 years. This can make it hard to be approved for a car loan, home loan or refinance, obtain life insurance, or even get a job. Because of the long term challenges a bankruptcy can create therefore it is very necessary to consider bankruptcy before proceeding. In such condition it will be better for you to take the advice of credit card specialists.

Sub: #6 posted on Sat, 06/04/2016 - 02:20

elisa.gracedd elisa.gracedd

(Posts: 7 | Credits: )

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