I am 26 years old and want to file for Bankruptcy. How does this work?
I have about 25,000 dollars in credit card unsecured debt. I live at an apartment. I do not own any houses. The only asset to my name is my car and my 401k from my company work about ,000. Is it possible to file for bankruptcy and not liquidate my 401k and my car? I make about 55k a year and the monthly payments are very difficult to make.
Posted July 11th, 2010 in Bankruptcy Q And A. Tagged: 401k, apartment, bankruptcy, company work, credit card, unsecured debt.
Where the f u c k do you work that pays 55k a year? You don’t need to file bankruptcy.
July 11th, 2010 at 12:17 pmMy answer is try not to file bankruptcy at any cost, while every states maybe different, but usually if someone file bankrupt, you will not be able to obtain credit for 7 years or so, and during this time even after this, many banks might not want to help you with your mortgage and other things, even after 7 years, it will still take time to rebuild your credit, I mean… How many 7 years you have in your life? And some employer might not even want to hire you with bankruptcy, you might not be able to find a landlord if you want to move in the future because they do credit check! If you income is $55k a year, and you don’t have a mortgage to pay just renting, you should not have a problem to handle $25k debt payment, what I will suggest you is, go to your bank, ask them to consolidate all your credit card debt into a debt consolidation loan which will have a amortization for 5 year or so, some banks might do even longer, that way you will have a structure and set monthly payment, I don’t see that to be more than $500 a month ( I assume if the interest rate is at 6% and 5 year term, your monthly payment should be $483), with your income, I don’t see this payment will be difficult, and you will be debt free for 5 year or even earlier! This is way better than bankruptcy and have your credit ruined for 7 year! So, learn a lesson and be a responsible person, talk to your bank, I am sure they will help you.
July 11th, 2010 at 12:17 pmIf you were to file bankruptcy your 401k is excluded from the bankruptcy estate (i.e., you don’t lose it; it is protected). Since you will most likely be limited to filing Ch 13 (your income sounds like it may be above the median for your state — depending, of course, on your state, your family size, etc) you will not risk losing your vehicle since in Ch 13 no assets are liquidated to repay creditors, but rather, 100% of your disposable income for the next 5 years will be committed to repaying creditors.
Given your relatively low debt (compared to your income) and your relatively high income, it is quite possible that you may need to file a 100% repayment plan, meaning that your creditors would be repaid 100% of what they owe over the next 5 years.
I suspect that you would not be eligible to file Ch 7, based on your income, but I could be wrong, particularly if you live in a state with a very high median income and have a large family size.
For the best possible info, make an in-person appointment with a bankruptcy attorney licensed to practice in your state.
Do not rely on info about bankruptcy you find (or are referred to) on the Internet, since much of it is outdated, biased, inapplicable to your state or your financial situation, or just plain outright wrong.
Most bankruptcy attorneys offer one free appointment to evaluate your situation and advise you regarding your bankruptcy and non-bankruptcy options. Take advantage of it. Seeing a bankruptcy attorney for a free appointment does not obligate you to file bankruptcy or to use that particular attorney if you do decide to file.
July 11th, 2010 at 12:17 pmThe best way to determine if you can keep all of your assets and file for bankruptcy is to consult with an experienced attorney. Each state has bankruptcy exemptions that are used to determine what you can keep in bankruptcy. These bankruptcy exemptions provide information on what assets you can protect in a bankruptcy without a creditor being able to touch them. Whether you qualify for Chapter 7 or Chapter 13 bankruptcy will depend on a means test analysis and cannot be determined just looking at what you make a year.
July 11th, 2010 at 12:17 pmWith the information you provided, bankruptcy would be the wrong course of action. A judge looking at an application with those numbers is going to suggest that you don’t need to declare bankruptcy at all, you need to rein in your expenses. At 55K, your take home is what? $4000 a month? You could pay off that $25000 debt in five years if you paid $500 a month. Your apartment shouldn’t be more than 25% of your monthly income, which would be around $1100. That leaves $2400 left over for your other expenses—and no judge is going to order a dispensation when you have that much leftover discretionary income. In fact, a judge is going to determine that you’re just trying to get out of paying your bills.
You’d be better off talking to the credit card company and seeing if they are willing to set you up on a payment plan. Or if your debt is across a number of different cards, consolidating your debt into one account.
July 11th, 2010 at 12:17 pm