Discussion in 'The Watercooler' started by klmno, Dec 4, 2009.

  1. klmno

    klmno Active Member

    OK, I know this has been discussed a little beofre, but I think it's been a while. Does a person have to be employed to file for bankruptcy? What's the cost to file? How long does the process take?
  2. LittleDudesMom

    LittleDudesMom Well-Known Member Staff Member

    you wouldn't qualify for Chap 13 because that is for allowing more time to pay debts and you have to have a reliable form of income and cash left over after paying your monthy bills. You would quality for Chap 7 because that eliminates most of your debt. There are some rules in our state regarding the amount of income you have in order to quality for Chap 7, but you would meet those.

    The next step is filing - which means you have to fill out the forms (which you can find online at the United States Bankruptcy Court of "our state". You would complete the forms and then mail them to the court (address on the forms) and the filing fee is between $200 and $300. You will be notified by certified letter from the bankruptcy court requesting your presence at a hearing. When attending the proceeding, creditors and the "our state" court appointed trustee will have an opportunity to ask you questions.

    Make sure you have all your ducks in a row!

    (helped one of our exemployees do this a few years ago)
  3. Suz

    Suz (the future) MRS. GERE

  4. donna723

    donna723 Well-Known Member

    Rather than try to do it yourself, I would consult an attorney that specializes in bankruptcy. There's lots of them out there. I filed for Chapter 13 about six years ago which you probably couldn't do but a co-worker filed for Chapter 7 and her attorney handled the whole thing for her. All she did is to sign her name. It can get tricky, especially since you're dealing with the foreclosure. With the Chapter 13 I didn't have to pay anything because the attorney's fees came out of what was taken out of my paychecks. For Chapter 7, my friend did have to pay a fee to the attorney when it was filed, but it wasn't that much and it was over very quickly.
  5. Abbey

    Abbey Spork Queen

    I filed about 6 years ago...did it myself. Do your research on what you can and cannot claim. (Student loans, IRS, etc.) The laws vary from state to state as well as year to year. I know it's a lot harder now.

    That being said, have your paperwork in order. For me, it was an in and out thing. My debts at that time were medical related to the tune of over $300,000. My two insurance companies were bickering about who should pay what and in the meantime I'm getting sued by doctors/ was a mess. In the end all the medical bills were paid, but it cost me attorney fees, etc., to get it all sorted out. I wasn't buying fancy cars or expensive jewelry. I don't think my hearing lasted 5 minutes.

    What I found funny, though, was the young kids filing bankruptcy for a $300 cell phone bill. Denied.

  6. klmno

    klmno Active Member

    OK- thanks for the info! Since there is overwhelming knowledge here, maybe you can help steer me in a direction before I call people or start anything on Monday. If I can get a job by the first week in Jan, this can be worked out better, but let's assume I don't-just so I can plan for the worst. The foreclosure sell is set for mid-Jan, which would means I would be technically homeless (even if I put stuff in storage and go to my mother's- who is out of state and plans to put her house on the market). This could be an issue because without a verifiable home in this state, difficult child can't be released to me in Feb. If I'm out of state, say-living with my mom- they would have to do the whole interstate study just like if I was in HI, although it would be easier, but doesn't solve the problem of it being a temp solution and me still needing employment- and there is less available in my mother's area than here. Of course, it's better than "losing" difficult child and living on the streets, assuming my mother and I can survive each other and she doesn't kick me out.

    So, I would like to handle this in a way where 1) if I get a job here within the next few weeks, I can work out things with creditors one way or another and hopefully being able to keep the house, at least for a while longer and selling it myself later; 2) I keep the door open to this job in HI because the job in HI is better than no job here, if I can still afford to get difficult child and myself there- (I thought about what the security agent said about getting the late payments put behind me and I researched this last night. She told me if I get documentation showing my financial situation had changed/improved to send it to her and she would reconsider.) Apparently, what stands in the way of the clearance when it comes to finances are A) is there a reason the person got in the situation or is it an irresponsible habit- clearly mine is a reason and can be proven not to be a habit, B) How has the person responded to the debt- are they trying to pay it back and have they worked with the creditors (this is where my hang-up is), and C) Is the amount of debt feasibly possible to pay back (this is a current problem too).

    The 2-3 websites where I was reading about this said that bankruptcy is not a reason in itself to deny the clearance- it's obviously different if the person keeps going this route, but it is a legal "response" to debt. I don't want to put all my eggs in one basket, but I do have some money- just not a lot.

    I'm wondering if I should try again to see if the CC companies will reduce the debt and commit to me paying just $150-$200/mo- which is obviously more than they''d get if I have nothing to give, then if they will, I could fax that agreement to HI. If I still don't get the clearance or a job somehwere else, then couldn't I still file for bankruptcy a month later or something? If I got a job here in the meantime, I could keep my commitment to pay that amount. Or, does the bankruptcy process take over a month, meaning I better file ASAP? Will it postpone the sell of the house? Whatever I do, I will fax it to this security person because I have absolutely nothing to lose bletting her know how I'm addressing it.

    Also, I will do whatever I can to find even temp employment to get the foreclosure sell postponed until a couple of weeks after difficult child's release so I can stay in this state until after that. But, I can't be sure that I can make that happen.

    This is all rumbling around in my head so I hope I'm writing it clearly. I guess I'm asking for suggestions about which route might postpone the foreclosure sell, reduce debt, and still keep a door slightly open for the clearance. (Or at least, which route keeps as many options open as possible without costing me $1000 or more.)

    I have no tax issues or medication bills and the car is paid for. It is 2 CC companies, the primary mortgage (which is for about 60% of the assessed value of the home so hopefully would be more than covered by selling the home), and a HELOC (which would get any amount the house sold for over the amount of the 1st mortgage). So what paperwork is needed for bankruptcy?
    Last edited: Dec 5, 2009
  7. DammitJanet

    DammitJanet Well-Known Member Staff Member

    From what I understand...and I am in no way well versed in bankruptcy law or clearance law, but I did look into bankruptcy for a brief second one time...bankruptcy freezes "most" debts when you file it immediately. I think the only ones it doesnt are IRS and student loans. Even your utility bills cant get shut off...or that was what I was Might not be true.

    Now what you get to keep, what is actually done away with...all that jazz...I got no clue. I never filed because all I was going to try to do was keep the property tax people from trying to foreclose on my house by declaring bankruptcy but I worked out something with them at the last minute. Those people are aholes. Boy was I glad to get them paid up!
  8. klmno

    klmno Active Member

    Well now I have found the specific guidelines that the government uses for this. If I had known and talked to a credit counselor prior to completing the security form, and sent them evidence that I had talked to a credit counselor, it could have gone thru. Urghhh...
  9. DammitJanet

    DammitJanet Well-Known Member Staff Member

    Good grief. Sigh.
  10. DaisyFace

    DaisyFace Love me...Love me not


    It's a good idea to talk to a credit counselor anyway....

    The new bankruptcy laws require that you complete a court-approved credit counseling session anyway(the court should be able to give you a list of their "approved" credit counselors--not to be confused with for-profit loan settlement companies).

    IF the credit counselor can show you any alternative to bankruptcy (debt management plan, mortgage refinancing) great!!! If not, the counseling session will "count' toward the counseling required for a bankruptcy filing.

    Good luck!

  11. klmno

    klmno Active Member

    Great idea, DF! How do I find one? I can fax something off to HI for that, too. Do these sessions cost me anything?
  12. DaisyFace

    DaisyFace Love me...Love me not


    Go here:

    And enter your state in the drop-down box.

    Yes, the session may cost you up to a maximum of $40 (and if they manage to arrange a debt-mangement plan for you, you will make monthly payments to the credit counseling agency instead of to your creditors).

    They should be able to supply you with a certificate that you can present to the bankruptcy court AND whatever documentation you may require to pass your security clearance for HI.

    Good luck!

  13. klmno

    klmno Active Member

    Great!! Thank you so much!! Any idea how long these sessions last- are we talking days or months? Obviously, I haven't checked the link yet. This is the kind of stuff I want to check into though- any info that can only help getting a job, paying debts, getting that clearance, etc is greatly appreciated- thanks again!
  14. SomewhereOutThere

    SomewhereOutThere Well-Known Member

    We saw a bankrupcy lawyer and are going to eventually file Ch. 7, but wouldn't dare try doing it ourseleves. You can do the class online. I'm not sure how long the classes are, but I didn't get the impression they were for that long. For us, we need to wipe out debts and judgments and can't afford to pay monthly fees...we are struggling enough as it is.

    I was told to be careful of credit companies. Some are scams. Beware. They make promises they can't deliver. In the end, whether or not you are in terminal debt or file for bankruptcy, you will still have credit problems until you can build it up again. In fact, our lawyer told us it's often better just to start fresh. And he does all sorts of bankruptcy. It's his field.