I'm 30 years old, should I file for bankruptcy?

Question

I have about $30,000 in debts. Mainly from credit cards dating before 2002. I used to pay my bills on time, however, in 2002 I was diagnosed with a disabling illness and fell way behind on my bills. I no longer am able to work and have been on Social Security Disability Insurance for 6 months now. Would it be worth filing for Bankruptcy? or should I just wait till the "7 year reporting period" from creditors have passed, and not file? I really want to improve my credit rating ASAP! Also, I live in California and I'm planning on moving to Texas very soon. IF I should file for BK, Should I do it in CA or TX?

Answer 1

I would not reccommend the "Ostrich Approach" (sticking your head in the sand and doing nothing) .

The 7 year game doesn't work anymore. There are what we call "junk debt buyers" which are rouge debt collectors that buy debt long past the statute and illegally re-age the accounts and sue or try to collect them far after the statute has expired.

Based on your situation, you may have no choice but to file, but your should still look at your alternatives because bankruptcy should be a last resort.


Here is a good article on bankruptcy facts you should read:

http://www.expert-credit-advice.com/bankruptcy_facts.htm



Here is a good artcle about options to deal with debt:

http://www.expert-credit-advice.com/options_to_eliminate_debt.htm


Whatever you decide to do, it will affect your credit.

If you want it to affect your credit positively, pay off your debts without bankruptcy. Settling your debts may allow you to afford paying them off rapidly and you can still salvage your credit but it will take some time.

Read this: http://www.expert-credit-advice.com/debt_settlement_service.htm

Answer 2

The bankruptcy laws changed about a year or so ago. You can no longer file for a Chapter 7 discharge and automatically get it. You must meet a means test. Basically, it has to do with your income and whether you make enough to repay your debts over a 3-5 year period, under a Chapter 13, or qualify for a Chapter 7 discharge. My guess is that if you are disabled and only have disability income you could probably qualify for a Chapter 7. Illness and being unable to work is certainly a good reason to consider bankruptcy. However, only an attorney who specializes in bankruptcy law could tell you whether you qualify. There is a formula that is used. Whether you qualify or not, you have exemptions which cannot be taken whether you file bankruptcy or not. Creditors cannot touch your Social Security until you put it in the bank. Most states have personal property exemptions that may not be touched by a creditor. Unless you have real estate which can be attached you may not be any worse off regardless of what you decide to do. If your disability is permanent, it might be just as well to file and get it behind you. I suggest contacting a credit counseling agency. There are Consumer Credit Counseling agencies in most major cities. You may also want to contact a bankruptcy attorney. You can check the yellow pages in your town. Most will be listed. They could better advise you. You need to check out all your options before making such a decision.

Answer 3

First, you have to live for a year at a location in Texas before you can file in Texas (I don't know the CA bankruptcy rules). Texas is a little more liberal, I think, but still not sure. Your credit rating will be toast for a few years following a bankruptcy. Mine has been 4 1/2 years now, and I am just getting back my credit status. In other words, I have lived without credit cards, etc. since the bankruptcy. Bankruptcy is a change in your life and is a last resort situation. They have stiffened the rules since I filed in 2002. It is no picnic, but I was able to go with a Chapter 7 dismissing all of my debts. The car I was paying on I had to pay or have it repo'd. I have not regretted the decision, but it was a sickening feeling to lose my credit - I simply had no choice because of my life circumstances (I won't bore you with those details). I had close to $60,000 in credit card debt when I filed. You will probably have to go Chapter 13, but when and if you file, please enlist a good bankruptcy lawyer (that made the crucial difference for me). Good luck.

Answer 4

Talk about bad advise! Go out and spend some money on a excellent bankruptcy lawyer, this is one time you want the best. Your credit that is now in the toilet will go to a FICO rating of about 650 after the bankruptcy is discharged. I had to file because of medical bills and within a year I sold my house and bought another one and have another credit card. Also because you are not paying the bills your credit report looks like a wall with buck shot in it, after bankruptcy there will be one mark left, period.

Bankruptcy is there for just this kind of situation. Don't buy into this garbage about how you filing will up other peoples interest and all this other junk people try to say so you will feel guilty. Do what is best for you and don't worry about the rest of them, do you see them offering anything but lip service?

If it makes you feel better, think of yourself as a business and you are just reorganizing your debt, at least your not laying off hundreds of people, slashing pensions and medical plans or you could be like the government, just keep borrowing with no hope of ever paying anything back, but keep collecting taxes or lastly just print worthless paper and convince people it has some worth.

Answer 5

First, Garth is lucky he can even walk without tripping, the way he sticks his nose up at people! Someday he will find himself in a bad situation.....

ruaclever doesn't even have a clue about what he's talking about, so it safe to ignore him too.

You have a lot if issues involved in your decision. I'm going to strongly suggest you find a BK lawyer who will give you a one hour consultation. There are a lot of variables involved here. Let me remind you that I am not a lawyer or credit counselor, so take my advice for what it's worth.

California has a 2 year statute of limitations on debts. This date starts on the date of the last transaction (when you paid or charged something). Therefore, if you are right about the dates the SOL has expired and you don't have to pay these debts. However, the debt will be reported on your credit reports for 7 years, ending in 2009.

If you file for bankruptcy, along with all the other problems, your credit is ruined for 10 years, or until 2016.

According to the U.S. UCC laws, when you move to another state (in your case Texas) the creditor can use either the old or new state's SOL (whichever is longer). So in this case, your SOL is 4 years, meaning debts expire in 2006. Again, you are right on the edge of the SOL.

Another issue is your income. Social Security and SSI payments can not be garnished, so your income is safe. All they can do is go after property like your car or home. If you don't own either, they can't do much to recover from a judgment. This is called being "judgment proof".

So, it's my opinion that unless you have some other debts that you may not be able to pay (mortgage, car loans, or other secured debts) it may not be to your advantage to file for bankruptcy.

But please do not take my opinion without first consulting with an attorney more familiar with your state's BK laws. Every state is different, and there may be some loopholes a good BK attorney can explain to you.

Research your debts a little more and decide.

Answer 6

Don't do it honey! The bankruptcy laws have changed in most states making the debtor pay back a percentage of the debt regardless of the situation.... Filing for bankruptcy will harm you more than late or no pays on your credit report. Contact all the companies that you owe and make agreements to pay, then pay each and every one of them on time no matter what. In about 6 months you will start to see great improvements on you credit. This will be hard for you on a fixed income but there are ways to make it happen. Find a reputable non-profit credit council and take control of your situation. Trust me when I say it feels better being broke knowing your bills are paid than just being broke.

Answer 7

WOW, there are some really bad answers in this question. NO...do not file BK, you will have a (10) yerar wait in credit hell. YES...wait out for the (7) years to get over. One person said the (7) years don't work anymore..they are 100% wrong. You have (5) of those years already done..wait it out!! (7) years is the LAW...PERIOD, also your State has a (5) year Statue of Limitations...so after (5) years you can't be sued for debts on credit cards. Don't throw money at a lawyer that will do you no good...wait it out and then claim your freedom in 24 Month's

Answer 8

You should visit QUOTEHELP.NET- I am sure here you can find the best option for you

RE I'm 30 years old, should I file for bankruptcy?

I have about $30,000 in debts. Mainly from credit cards dating before 2002. I used to pay my bills on time, however, in 2002 I was diagnosed with a disabling illness and fell way behind on my bills. I no longer am able to work and have been on Social Security Disability Insurance for 6 months now. Would it be worth filing for Bankruptcy? or should I just wait till the "7 year reporting period" from creditors have passed, and not file? I really want to improve my credit rating ASAP! Also, I live in California and I'm planning on moving to Texas very soon. IF I should file for BK, Should I do it in CA or TX?

Answer 9

My question is did you call your card companies and tell them what happened? If so, they should have taken care of it by putting payments on hold for you for 90 days. If you didn't, you should have. Just call them and see what your options are and try to work something out with them. Your best bet may be to consolidate all of them to one card (If you have the credit available). I would not recommend filing for bankruptcy at this time. No offense but, especially for a man who is 30, and if your credit is excellent, it will come back to hurt you if you file for bankruptcy now. Just see what you can work out with your card companies. Best of Luck!

Answer 10

Although I am sympathetic to your situation, I don't believe that you should file for bankruptcy. It sounds as though the money you owe was spent by you, so you should own up to your responsibility in paying the debts off, rather than causing interest rates to go up for others who do pay their debts. It would behoove you to contact each creditor and explain your situation, as most will set up payment plans for you to slowly pay off the debt.