Any bees willing to discuss bankruptcy experience?

posted 3 years ago in Money
Post # 3
Member
3394 posts
Sugar bee
  • Wedding: April 2014

@gpsp2B:  When I got married the first time my (now ex) husband made $22,000/yr. and he personally had $26,000 in debt including school loans. We tried to pay things off. We really did. I got a job 4 months after we got married. In the end though we just couldn’t get out from underneath that debt. He filed chapter 7 and I went through a credit consolidation plan (I only personally had about $2,500 in credit debt, but with fees it came to like $4,500 and we settled for somewhere aroung $3,000) I paid all their stupid fees and the money I owed them and I got screwed. A year after he filed for bankruptcy he was able to get a credit card. I paid my debt (and had a lot less debt) and I had to wait 3 years before I could get a card with only a $200 limit. I really thought that since I was paying I would doing it right, I could have gone with him on the chapter 7. Boy was I wrong. The credit consolidation just kept dragging down my credit the year it took me to pay it off.

Post # 5
Member
3394 posts
Sugar bee
  • Wedding: April 2014

@gpsp2B:  Yeah, we had children too. When he filed we had 2 children already. However, he couldn’t get rid of his student loans, so he still had about $10,000 in debt after the bankruptcy. But we were still better off and we never ended up living in the car with our kids, so it all worked out. I just wish I had known that what I thought was doing the right thing was going to come back and bite me.

Post # 7
Member
3394 posts
Sugar bee
  • Wedding: April 2014

I don’t even remember. It was 15 years ago. But even if I did have it in writing I never sent it to anyone or knew what I should do with it. I was very naive about the whole thing. This is why I no longer have any credit cards. It’s way too easy to screw it all up and way too difficult to fix it.

Post # 8
Member
944 posts
Busy bee
  • Wedding: September 2013

@gpsp2B:   30k is from student debt…the student debt. Bankruptcy doesn’t cover student loans.. so NO– don’t file!! That will ruin your credit at such a YOUNG age. Chapter 7 actually goes onto your credit score for at least 10 years, so unless you have a large savings or downpayment, buying a house will be tricky even in 7 years.

You CAN pay this off. You need to make a budget and stick to it. Get a steady job, or two, or three… and pay this off.  Bankruptcy laws are difficult and it’s actually harder to file than ever before due to the economy.  Perhaps someone will have to sacrafice their education temporarily if you can’t make ends meet. Just do whatever you need to legally do to fix your problems.

I was 30K in debt at age 22. I paid it off by age 26. I didn’t make a lot of money, but I DID have: a crappy apartment with a craigslist roommate, no cable/internet, a crappy cell phone plan (I STILL dont have a smart phone..), thrift shopping, and frugal living. Life wasn’t ‘easy’ … but it’s so much better now that my debt is gone. 

How much of your debt is not education related? It’s seriously not worth it if it’s under 30k. Again, sit down and make a budget and payment plan you can stick to.

I commented because I have been in debt, but I have never filed. But I honestly dont mean to come off rude, but I want you to be EMPOWERED to control your debt. Best of luck.

 

Post # 9
Member
3693 posts
Sugar bee
  • Wedding: August 2013

@tampalove35:  +1

Saving up for a down payment on a house shouldn’t even be on your horizon at this point. Filing for bankruptcy will tank your credit score for years and years so you likely wouldn’t be able to get a mortgage anyway. Focus on finding good, steady work, making a budget, and paying off your debt. See if you can work out a deal with the collections companies. I know there have been posts on Weddingbee before about people asking for advice on how to reduce/consolidate debt.

Post # 11
Member
4220 posts
Honey bee
  • Wedding: August 2013

Can you try to get a debt consolidation loan? Have you liquified all the assets you can? Have you tried contacting the credit card companies and asking them to lower your debt or interest rate? If you have a house, can you down grade? Are you currently following a budget? Do you have credit/debt counseling services in your area?

There are a lot of other options to try first… bankruptcy is no easy way out. 

Post # 12
Member
8425 posts
Bumble Beekeeper
  • Wedding: April 2013

@gpsp2B:  I have never filed for bankruptcy, but a good lawyer can definitely help you with this.  I know that in order to file chapter 7, you must qualify for it, otherwise you will have to file chapter 13 I think.

Post # 13
Member
2878 posts
Sugar bee

I don’t know where you live, but here it does stay on your credit report for almost a decade, then you have to re-build your credit entirely (which takes years) and in the process, you can’t have credit if anything happen to you or your kid, that would be a disaster. I would definitely try to see if there is any other solution right now because it will affect your future. Consolidation would be an option ? You could pay lower payments each month ; yes it will take longer to get rid of, but at least you won’t have to sacrifice both your financial ”health” in order to do this. 

You are both very young, yes you have massive debts but start from there, you have your whole life and career to get your situation better. That’s what everybody does. Saving for a house, as someone said, is absolutely not an option right now. This money needs to go to debts, tand into ”urgence savings” (especially with a child).

Try to find someone in your area that would guide you through making a good budget and better finances choices, and I’m sure you’ll find something that prevents you from bankrupcy. This is totally last resort, IMO.

Post # 14
Member
69 posts
Worker bee
  • Wedding: September 2015

School loans generally cannot be included in a bankruptcy but I have heard success stories online. I haven’t had this situation but I recently went with my boyfriend to see a woman who did bankruptcys. My boyfriend at that time had only about 3k of actual debt and the real debt was 55k of student loans. Sallie Mae was requesting he pay around $550 each month and there’s no way he can due that and pay his car, insurance, bills, necessities and save on top of that! The woman told us that my bf didnt have enough actual debt where he can just slip in his school loans in the bankruptcy.

She said she could give it a shot but it was a 50% chance. At this we decided to work on his actual debt while getting in touch with sallie Mae. He’s currently waiting for some paperwork from Sallie to see what his options can be to lower his payments. With his actual debt he’s due to pay off one credit card next month and after that he will have around $1500 left to pay. 

I know his situation isn’t like yours but I’m sure you have thought or will eventually think the same things. 

-find a person, preferably, who has successfully discharged student loans in a bankruptcy.  If you can’t, ask sthe person how likely it would be to discharge the student loans.

-consider debt consolidation

-budgeting helps

-banks with credit cards give opportunities to transfer a balance from your current credit card to theirs with no either no transfer balance fee or a percentahe of what you owe and w anywhere from 12 – 18 months of 0 interest. I read a yahoo article that Simplicity from Chase is one of those cards.  That can also help pay down because whats the point of paying $100 each month if $40 will just be paying interest charges? 

– Ready For Zero is a free website where you can input all of your debt, linking your bank and credit cards, and will help you create a budget to pay off your debt. This has been a good tool for my bf bc although at first it sucked to see how much he owed but after he stuck to paying things off it made him feel better to see the actual change. 

 

Post # 15
Member
69 posts
Worker bee
  • Wedding: September 2015

And I agree with others, bankruptcy should be a last resort. Research all you can, talk to your banks, debt consolidators, and whom you have your student loans with to try and find a resolution before looking to file. Filing bankruptcy sometimes seems like best and quickest solution but it also does have the longest negative effect on your finances.

Post # 16
Member
9412 posts
Buzzing Beekeeper

@gpsp2B:  I would get expert opinions if I were you – a lawyer is great, but what about a financial planner or someone who can file a consumer proposal on your behalf? That is a lot less damaging than filing for bankruptcy. I would suggest that you both need to find steady streams of income and stick to a budget. I know you have a baby coming into the mix at a time where it is not ideal, but a financial planner could help you find a workable budget. I would do everything I could not to file bankruptcy.

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