Long story short - I went back to college at 27, got behind on bills, had to take out a bunch of student loans and by the time I graduated, I'm in debt over my head (about $10K) plus have $40K in student loans, am behind on everything and right before I went into college I bought a house - a fixer-upper - that I can no longer afford to fix up. I'm behind on those payments as well and I fear I'll never be able to sell the house (it's not a showpiece, that's for sure), especially with the market in the state it's in.
I know student loans can't be discharged with chapter 7 - but I still have to pay on them so that's why I mentioned them.
What has your experience been? Part of me wants to file chapter 7 and start over again a wiser woman. I'm just afraid and my fear is making me unable to decide and here I sit. Help!
2007-12-27 01:13:08 · 8 answers · asked by Anonymous in Business & Finance ➔ Personal Finance
Hey Andy -
Thanks so much for your kind words and advice. I totally set out to wreck the American dollar. I went back to college not for a better education to get a better job in order to never be in this situation again but to wreak havoc on myself. I love creditors' phone calls and worrying about where my next meal is coming from, the look in my daughters' eyes when I say we may lose our house. It's my greatest joy in life!
Thank you so much for understanding!!
Even Thumper knew that you should keep your mouth shut if you didn't have anything nice to say.
2007-12-27 01:38:45 · update #1
I filed Chapter 7 2 years ago just before the laws changed. You can not include student loans in the bankruptcy, it is mandatory that those are paid back. Right now I am roughly $30,000 in student loan debt and am currently in graduate school building even more student loan debt so I know first hand that those can not be incorporated into the bankruptcy. With the new laws you must go through credit counceling first, at your own cost, before the bankruptcy will be considered. Also with the new laws attorney fees have increased. I paid nearly $1300 (I'm in MA.) Also with the new laws your debt is not gone, you are still responsible for the debts but the monthly payment is negotiated with the courts to an amount that is affordable for you.
I did credit counceling on my own prior to filing bankruptcy. If you find the right company it can work but there is a fee attached for the service. Through the credit counceling I was able to repay nearly $10,000 to my creditors but circumstances that were beyond my control forced me to file the bankruptcy. I tried to work with my creditors first so I could continue to pay them but once you are in credit counceling if you miss 1 payments the creditors won't renegotiate with you. I started receiving court papers and demands for money from my creditors, demands that were well beyond my means. I did everything possible to avoid the bankruptcy and documented everything I did so my bankruptcy was easy to discharge.
My advice to you is try to negitiate with your creditors. Explain to them your situation and see if they will work with you. As far as the house, if you are able to live in it in the state that it's in now then I would hols off on further repairs. If you are having problems with the mortgage then contact the mortgage holder immediately and work with them. Document every telephone call you make; date and time, name of person you speak with, and outline the conversation. If it's a creditor, what I did was draft up an outline of the conversation and mailed it to my creditor to be attached to my file. If you send a letter to a creditor keep a copy of it and mail it certified with return receipt as your documentation that it was infact received. All this documentation helped with my bankruptcy. (Yeah my attorney loved reading through all my notes....took him a day or two) but it helped him with his case.
If you live in MA I can give you the contact information for my bankruptcy attorney. He did a wonderful job for me and is a really understanding guy.
2007-12-27 01:39:03 · answer #1 · answered by nu_girlie 2 · 0⤊ 0⤋
A little over 10 years ago I filed chapter 7 for the same reason. I am now done with the student loan, the bankruptcy is no longer public record and I am working on building a credit history.
It was much easier to have my debts discharged because I couldn't afford rent or food with all the credit card payments/student loan payments I needed to make each month...
2007-12-27 09:17:15 · answer #2 · answered by Just Me 7 · 1⤊ 0⤋
With Chapter 7 you might lose your home..it depends upon how much equity you have in your house (you can only have maybe $5,000? I think...)Chapter 7 is about $800 in lawyer's fees? They usually have you skip payments to creditors to save up the $800...lots of nasty phone calls to dodge.
Chapter 13 would allow you to keep your house if you want to, but since you can't afford to fix it, then maybe you want to let it go. Can you sell it? Chapter 13 is about $1500 lawyer's fees...part of them up front, part in the payments of the bankrupcy. You pay a percentage of what you owe based on your income for about 24 or 30 months?
It might be hard to get an apartment with bad credit from the bankrupcy...Do you have a plan on a place to live when the house is gone?...For an apartment, you will need maybe first and last months rent and the deposit money (plus credit approval)..
Yes, you are stuck with the $40K in student loans...me too...no way out of those that I know of...except...well, we won't go there...
2007-12-27 09:22:01 · answer #3 · answered by Anonymous · 0⤊ 0⤋
Chapter 7 will only help you with your consumer debt- which from your post seems like it is only 10K. The majority of your debt cannot be cured or helped with Chapter 7. You would probably be better served with a Chapter 13, which will stop foreclosure on your house. Judges are very strict with granting Chapter 7 now, so you'd probably be forced into a 13 anyway.
Have you asked your student loan company for a forebearance? Tried negotiating with your consumer debt companies for lower rates? I would recommend exhausting all of these options on your own before you enter into BK or credit counseling- both will appear on your credit report and will damange your credit for a time.
Good luck.
2007-12-27 10:45:56 · answer #4 · answered by sarah jane 7 · 0⤊ 0⤋
i filed chapter 7 about 7 years ago, i had a similar situation, i didn't do credit counseling because i couldn't afford to consolidate and repay, they said it would take 7 years to restore our credit but we bought a house 4 years ago and have got a car and a truck and if you say your credit is in trouble anyway and your over your head i would do chapter 7, don't do 13 that's consolidating and our lawyer told us bankruptcy is bankruptcy, and the whole point is to get rid of the debt
2007-12-27 09:22:26 · answer #5 · answered by dirt77 3 · 1⤊ 1⤋
your too far gone to go to consumer credit counseling so i would go and get a lawyer and they will tell you what is best for you
2007-12-27 09:17:28 · answer #6 · answered by dreamweaver 7 · 0⤊ 0⤋
i went w counsiling. it saves face...and saved my credit more them bankruptcy
2007-12-27 09:15:51 · answer #7 · answered by Anonymous · 0⤊ 0⤋
yeah default on your debt... so that everyone holding shareholders take the hit... good job
try being more responsible... the declining dollar is attributed to irresponsible people such as yourself.
next time you should budget, maybe get financial advice, save money and never have this issue again. DO NOT USE CREDIT IF YOU CANNOT PAY IT BACK
2007-12-27 09:35:11 · answer #8 · answered by Anonymous · 0⤊ 8⤋