Discussion in 'The Watercooler' started by MidwestMom, Feb 5, 2011.
Are you glad you did?
We're going to file this week. We really don't have any other choice.
I had to file Chapter 13 before, several years ago.
I did chapter 7, 13 years ago. I wasn't thrilled I had to, but was able to keep my car - and my stuff - I didn't have much. It was a royal pain to get a car loan in 2004, had to have a cosigner - actually he had to do the whole thing, to get less than an 18% interest rate - but it's finally gone (3 years ago) and, as long as you don't get yourself back in that situation, it will be worth it.
Hugs, hon. It really hoovers.
I did Ch 13- I think- it was the one where everything is wiped out but I kept my car and belongings. I hated to do it too- so much so that I really waited a lot longer than I should have just because I couldn't stand the thought of it. But I'd heard that Ch 13 is less damaging in the long run than Ch 7. You might want to compare just to be sure. I know- it's hard and painful.
Hmmmm. Maybe mine was Ch 13 - honestly, it was the same as klmno's - did not have to pay anything back.
Yeah, it Hoovers, and we waited way too long. Our credit is awful and we have tried to pay back, but always fall behind.
We can't afford Chapter 13 and qualify for Chapter 7. We're going to go for it. It can't be any worse than our credit already is...lol. Most of this happened because of the downturn in the economy and we don't see anything good happening that will help us be able to pay all the interest accumulating on our debt (sigh)...
Look into it just to be sure- if you file Ch 7 and can't make the payments, I've heard things can get pretty bad. You can sale some thing to afford Ch 13. It's just a suggestion though.
I think they've changed some of the rules for it and have made it much harder now to file Chapter 7 where all your debts are just wiped out. Mine was Chapter 13 where you repay much of the money you owed, through the bankruptcy court. They took a big chunk of money out of my paychecks for five years until it was all paid off. The money goes through the bankruptcy court and they distribute it to the creditors. I had a piece of property that I sold - the proceeds went towards the debt, which paid it down enough that they the reduced the amount taken from my paychecks. You usually repay a smaller amount to the creditors than what you actually owed if the creditors agree to it, and you pay little or no interest and you don't pay all those silly fees on the credit card debt. While you're paying it off, you are not allowed to incur any other debts unless it is approved by the bankruptcy court, which is a pain. You are also not allowed to make any major purchases (like a car or even appliances) without their approval. During this time my car was totalled when a deer ran out in front of my car. They KEPT the check from my insurance company, the money I needed to buy another car, until they got darned good and ready to approve it! It was a loooong five years and has been paid off for about three years now and I owe no one! And it feels reeeeally good!
OK then maybe I am mistaken- I did the one where debts are wiped out and there's no repayment plan.
k, that's Chapter 7.
Hmm, then it WAS Chapter 7 I did. If you have nothing of value (my car was deemed a POS - it really wasn't, just old and not a classic), it's all good.
Oops.. all I know for sure is that it was bankruocty and I didn't do the payment plans- which make people and companies feel better but in the eyes of the federal governm,ent is actually worse- especially if you can't make those payment commitments. Still, it hurt because I'd always had excellent credit before then.
I was lucky in that I could have the payments taken from my paycheck and sent to the bankruptcy court. It would have been extremely hard for me to make payments if I had to arrange it myself. I was still working then and my payday was the last day of the month. Payments are due to the court on the first of the month, and they will only accept certified checks, not personal checks. The bank was closed by the time I got home from work - no way to get a certified check. And the federal bankruptcy court for our area is in a town 60 miles from where I live and 90 miles from where I worked. I would have had to take a day off work every month to get a certified check and then drive 60 miles to make the payment. It was so much easier just to have it taken from my check but not everybody can do that. From what they told me, if you pay yourself and you miss payments or are late paying, it can revert - the whole deal is off and you may end up owing the full amount again.
We filed 10 years ago, before all the changes to the law. Had to convince husband it was for the best, as we would STILL be paying off that debt. It was the best thing, financially, we ever did. Took a few months before we were able to get another credit card, but had to in order to slowly rebuild our credit scores.
Absolutely would do it again if need be.
I and hubby did a canadian version of this. It was such a HUGE relief. No more phone calls from creditors, no more lawyers calling threatening to garnish wages or banking assets. No more stress. It's not as bad as it sounds and now we are so much more healthier financially. When he was released from bankruptcy it only took 2 years before he had his credit built back up.We got a van financed at a pretty decent rate, a line of credit, credit card and even looking into buying our own home again.
Our laws are a little bit different though, ours is not a chapter 7 or 13. We have either your version of Chapter 13 (full bankruptcy) or something called a consumer proposal (You version of Chapter 7). Our laws also allow us to keep our homes either way (mortgage), vehicles and any personal assets that are not gauranteed or securing a loan and personal assets 7000 or lower each plus an extra bit if you have kids. They can't touch governement benefits (can't even keep our - then gst - hst, and can only take one year of income tax returns).
We qualify for Chapter 7. Already talked to the attorney. We can't have our wages garnished...don't make enough. We don't own anything of value...ten year old cars, rent our house. It would take the rest of our lives to pay off the debt. I will be very relieved. Our credit score already inhibits us from taking out any loans. If I inherit money from my father (I hope he lives another ten years, but he's 86), then we will pay off the debt. We owe about $10,000, maybe $15,000. Other than that we will never be able to pay it off, even at a reduced percentage.I'm tired of bill collectors too.And before somebody suggests it, my father won't give me any money early. That's out.
Just a note - if you do inherit money, it will likely be after the fact, so don't pay off debts with it. Fact is, it appears on your credit score forever and a day it seems, but after the hearing it's DONE. You're free.
Don't let anyone - ANYONE - talk you into paying back after that. If you need, put the money into an account for the kids' education.
I'm not going to pay it back if I don't have to. But if, God forbid, my sweet father passes within 180 days of filing for backruptcy, we have to pay it back. That's ok. Our credit will be instantly good then and we'll still have some money left over. We need to clear off our debts, no matter what. We waited too long already. Some are so old they have fallen off our credit report, but we have two judgments. One day we may be able to buy something again, even if it's just a mobile home. I don't want any judgments on our home. Judgements never go away.
Sorry you're having to travel that road but I'm sure it will bring stress relief. For those who need it there is great relief. Some people, my long time Ex for example, use it for personal gain. I never thought I would be living "on the edge" at this stage in my life but we will survive unless we get hit with anothr major hit. Scarey times! DDD
Even if you paid off everything at this moment - your credit would not be "instantly good". Your credit score rises and falls with time. It did not turn "instantly bad" either. And bankruptcy is bankruptcy - you do not choose Chapter 7 vs Chapter 13 based on what will "look good" on your credit report because neither will. Choose the one that works best for you - the heck with your creditors.
After your filing, over time, if you pay all of your bills on time and carry only small debts, you will see your credit score gradually improve.
on the other hand - check with your state's Statute of Limitations on collectible debts. In Wisconsin - the limit is six years from the date of your last payment. If it's been six years since you paid anything on a debt - they cannot legally go after you for it. So those debts that have already dropped off your credit report? For all practical purposes, they are gone... (yes, morally, you still technically owe - but legally, they cannot sue you.) If the debts are old enough - you may not have to file bankrupt at all.
Some judgments can be erased with bankruptcy if you can prove that paying them is an undue burden (Be sure to check with your lawyer, though - don't take my word for it.) so that alone might make filing worth it for you...
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