Can I file for bankruptcy?
Currently I have about ,500 worth of debt that include credit cards, a personal loan, and doctor bills. I recently became unemployed and I haven’t been able to make payments on any of my debts.
I’m fairly young and of course my interest rates are high, ranging from 16%-24%. I use to not only pay my bills on time, I paid them all early. I like paying my bills. I don’t want to file bankruptcy but in this situation I don’t know what to do. I expect to starting working within 4 weeks.
If I try to start making payments, it will take several months to get caught up. I live with my family and I’m basically head of the household. I take care of my family of 5, and that’s why I’m in debt.
I don’t want to go to one of those companies that you make a monthly payment to and they make payments to your creditors. I could do that myself, and I would still be in the same situation.
Is filing for bankruptcy the right thing to do? Will I be able to, considering the new laws?
You stated that you would be working in about 4 weeks? If there will be income within the next month or so – I would advise you not to.
Most bankruptcy’s take about one year from the time of hiring your attorney (1500.00 + for fees) – having lived through a bankruptcy (lost a business in 2004) – I would really try not to go this route.
I had read they were trying to make bankruptcy more difficult on situations like yours but you should probably contact an attorney to discuss the recent laws.
If you had more than 100,000 in dept I could see it – but $14,500 in the grand scheme of things is managable…once you get back on track.
You should be able to phone all your creditors, loans and doctor bills and inform them what has happened. Maybe smaller payments might be what they will accept until you have your job again. Or – no payment until 6 weeks from now.
Bankruptcy is expensive and NOT the easy way out. It will be reflected on your credit record for 10 years.
Good luck!
March 7th, 2010 at 4:46 amin the usa you can still file, bankruptsy dont let anyone tell you can not, if you have lots of stuff like cars, houses, boats, ect it will be harder to file,and you might forfet some of that stuff!
good luck, hope everything gets better for you soon
March 7th, 2010 at 4:46 amBankruptcy is a serious step. Laws vary from state to state but bankruptcy is usually a federal statute. There are several "chapters" under which you might file. Of course you can file..anyone can file but you will probably need a lawyer so I would recommend calling several lawyers and asking about their rates for filing a simple bankruptcy.
March 7th, 2010 at 4:46 amUsually the first visit is free and includes information about rates.
and usually some good advice. If you decide to make payments…
write or call each of your creditors, explain your situtation and tell them how much you can pay. They would rather have you pay slowly than have you go "bankrupt" and get nothing. Either way it will reflect badly on your credit record. Good luck…do something asap.
If you go to "one of those companies that you make a monthly payment to and they make payments to your creditors" which are called credit councillors, they can assess your financial situation and see if it’s even plausible. But they can also lower your interest rates or stop them all together.
If you file for bankruptcy you will have to make a minimum payment to your Trustee, usually around the $150 range, if not more, for 9 months (the bankruptcy period). And they will cap your income for that period as well. I’m not sure what it is for a family of 5, but for a family of 3 you need $2800 a month. If you make more than that you have to pay to the government.
You have to submit a financial statement each month to see how much income is coming and going and they find out how much you’ll have to pay, if you have to pay.
With a credit councillor if it’s possible, you might be able to get your debt paid off quickly and 2 years after you’ve made your final payment to them you can begin working on your credit again.
But with bankruptcy you have 6 years to wait after you’ve finished your 9 months of bankruptcy before you can work on your credit.
I would suggest a CONSULTATION with a credit councillor first. They will be able to assess your debt and finances and will point you in the direction that is best suited for your family. Whether it be bankruptcy or not.
EDIT – Oh yes, and if you have assets (car, RSPs, home) bankruptcy becomes a lot more complicated.
March 7th, 2010 at 4:46 am