should we file bankruptcy?
i am 22 and my husband is 24 and we have horrible credit and lots of debt. We’ve had 2 cars repossessed in 3 years and a few credit cards we cant pay. we also have loans and blah blah. i know we’ve made bad choices but how do we manage now? we have 3 kids and we are ALWAYS broke trying to just keep up and our family is suffereing. should we file? will we lose the car we have financed right now? will it really be 7 years before we can buy a house? HELP!
OK FOR THE RECORD i have my tubes tied now, and also we are military and get paid shitty. we HAVE made mistakes but all the credit cards and loans were in emergency situations.
Posted July 14th, 2010 in Bankruptcy Q And A. Tagged: 3 years, blah, cars, choices, credit cards, emergency situations, loans, tubes.
Just remember, Bankrupcy lasts for 7 years.Thats makes you 29 and your husband 31.
Fair enough,you do have your bills all wiped but thats after they try & sell anything you have thats an assett.
My advice is collate your total ‘honest’ expenditure each month,including all bills,living expenses etc and then approach the companies with a payment arrangement of what you can afford.
Companies would rather settle with a committment from a debtor(you) than loosing all their money to a bankrupcy claim.
Make sure they agree to not default you. Have that in writing from the companies.They cant really default you if you have an arrangement to pay them off.
I would approach the companies with $10 a week till the amounts are paid off.That could take 20 years.
You will find that in about 2 years, the company will get sick of waiting and offer you a settlement which could mean 50% discount if you pay off straight away.
Goodluck
July 14th, 2010 at 7:02 pmGather up all of your bills and total them up. Then contact a bankruptcy attorney for a free consultation. They can help you choose the best course of action. However, if you do not change your buying and spending habits you will end up in the same mess again. If you clear your debts and save some money and establish a good, responsible credit rating you may be able to buy a house sooner. Right now focus on what it takes to get credit healthy first.
July 14th, 2010 at 7:02 pmwow ! you need strict financial discipline…filing for ch 93 is only a short term solution.
Why get into all that debt in the first place?
July 14th, 2010 at 7:02 pmFirst, STOP HAVING BABIES!!!!!
You will not be able to discharge yout current car loan under a bankruptcy – you would simply forfeit the car.
As far as the seven years/house thing, at the rate you are going it will be 700 years before you can buy a house.
If you have no assets, bankruptcy might be an option for you just to get a fresh start. Check with a reputable credit counselor.
July 14th, 2010 at 7:02 pmwww2.oprah.com/money/debtdiet/money_debtdiet_main.jhtml Don’t file until you have tried this.
July 14th, 2010 at 7:02 pmYep i would. And in Australia i Think its changed to 4-5 years and really if you think about it do you really think you can afford a house in seven years… seems to me you need to go see a financial advisor!!! good luck!!
July 14th, 2010 at 7:02 pmMoney sucks!!
oh dear, that sounds bad; go to the citizens advice bureau- they will be able to give you good advice.
July 14th, 2010 at 7:02 pmI don’t know a lot about this stuff, but I have heard that you should do everything in your power to avoid bankruptcy! Good Luck
See a financial counsellor, they can help.
July 14th, 2010 at 7:02 pmhttp://www.cccsintl.org/
It’s free and they have a good reputation. That’s really what you need is some credit counseling. Unfortunately, due to recent changes in the law it’s not as easy to file. There have even been changes as recent as a few months ago so it’s complicated.
This is a good article:
http://marketplacemoney.publicradio.org/display/web/2007/03/23/personal_bankruptcy/
This article addresses the issue of your car:
http://www.usatoday.com/money/perfi/columnist/block/2005-10-03-bankruptcy_x.htm
I suggest you get some books from the library on how to manage money and to look at ways you can cut back and pay things off. If you want a better life you’re going to have to make some sacrifices.
The credit card companies will feed you to the wolves. No mercy and no $10 a week.
July 14th, 2010 at 7:02 pmWhat kind of bankruptcy you can file might help you decide…If you don’t own a house now you can file chapter 7 which means that you can also get rid of credit card debt — otherwise with the new bankruptcy laws you cant just get rid of that debt by filing.
As for losing the car – if that is something you still owe money on I think you will…..But talk to your attorney – Maybe they can find a way around that.
July 14th, 2010 at 7:02 pmSounds like a classic case of living beyond your means get financial help as obvious you and your husband cant control your spending Only file bankruptcy if that is the last straw GET FINANCIAL HELP FROM A PROFESSIONAL
July 14th, 2010 at 7:02 pmPlease pick up a copy of Dave Ramsey’s Total Money Makeover….. he talks a great deal about bankruptcy issues in plain English and how people can get out of debt without filing for bankruptcy. Should be at the Library for free. Good luck to you!
July 14th, 2010 at 7:02 pmpart of filing will or should require you to visit a credit councelling agency to find out your options. i highly reccommend this. contact the court which you would file your bankrupcy with and ask them which credt agencies they refer people to, then make an appointment. they will help you sport through your options.
bankrupcy can not only affect your buying a house, but even renting a new place.
if you live in the US – you have 3 children (i will assume they are young by your age) have you applied for WIC or food stamps, you may be elligible it will help with food which will allow you to budget that money elsewhere.
i know it seems impossible, but it is possible to get out of debt, the first thing you can do today –
create a budget, and stick to it.
clip coupons & shop on double ot triple coupon days if your store has them. (I usually save 1/3 of my shopping bill with coupons i get $150 worth of food for $100 or less)
Start cleaning out the cabinets and storage for a spring yard sale. Also you have 3 kids (i will assume they are young based on your age) as the youngest outgrows the clothes, as long as they are in good wearable condition list them on ebay in small groups. I helped my friend sell her baby & maternity stuff as the baby grew out of them and she was making about $100 a month.
Look online for deals – sites like http://www.pg.com (proctor & gamble) have offers where you can get coupons for stuff you use everyday and sometimes even free samples.
contact the companies you use every day – look on the back of your shampoo, soaps, food items and so forth for thier web site. then send them an email telling them how much you love thier product, or a problem you have/had with thier product. most companies love to recieve feedback and will send you coupon as a thank you – since you are buying anyways coupons always help!!
Take your lunches to work with you, a sandwich & fresh fruit from home is cheaper then buying out!!
July 14th, 2010 at 7:02 pmNo. Do not file bankruptcy.
July 14th, 2010 at 7:02 pmI would not suggest debt consolidation either. You will lose anything that is worth anything with the new laws in place. I was in the same situation minus the repos of cars. My husband and I had horrible credit scores that did not even register on the table.
We went to a mortgage place here in town and the woman suggested a few things to help.
First, pay debts one at a time starting with the lowest one first. Doing this will show positive ratings with the credit bureau and stop alot of calls.
Second, stop spending money where you do not have to. The car that is financed right now, for example. Buy a cheap used car outright and take away the payments of the car. An expensive car is not a necessity.
Do not use your kids as excuses not to pay your debts. They can get along just fine with good food (at home, not eating out) the toys they have do not need to be supplemented with new ones. If it is Christmas or birthday, fine, but not in between. If you really feel they deserve something, go to a dollar store. Most cities and towns have them now, and kids don’t care what things cost. They will be ecstatic when you tell them to pick out two things each and not be nagged by you that it costs too much. They can pick anything they want.
Third, what are the loans for? If something can be sold, sell it and pay off the loans. Rule of thumb: If you won’t die if you don’t have it, you don’t need it.
If you go to theatres, restaraunts, or anywhere else you have to spend money other than the grocery store and gas station, stop. Wait for the movie to come out on video and rent it. You do not need extras for your comfort in your home. If you have a bed, toothbrush, hairbrush, running water, electricity and heat, you are just fine.
Bankruptcy is the coward’s way around things that we don’t like to deal with after the fact. The new bankruptcy laws that are in effect would require you to do pretty much everything listed above, plus make you pay off 2/3 of the debt yourself, all the while earning a black mark on your credit record.
I know all this sounds impossible, but I will have you know that My family only makes $22,000.00 in a good year, we have four girls between 1 and 6, 3 dogs, 2 cats and a bright future after spending only 2 years fixing our credit and paying our debts. We used our tax refund for two years straight to pay things as well as paying things on a monthly basis to equal $46,000.00. If you think the math can’t be right, it is. And if you think it is impossible to pay off $46,000.00 in two years, you are wrong. Our kids are healthy, happy, and we will be moving into our OWN house in another couple of months, because we did what I am telling you to do.
I hope this helps you out.
Good Luck!
Assuming you have your house in order now, do everything you can to avoid bankruptcy. The last thing any of your lenders want to do is eat the money you owe them. Call them up and be honest; say you are on the ropes and would like to work out a payment plan.
July 14th, 2010 at 7:02 pmYou can usually get a free initial consultation with a Bankruptcy Attorney.
A Bankruptcy attorney might be able to advise you and help even if you do not file for bankruptcy protection.
Avoid the debt consolidation and credit repair ads, they are rip-offs.
Let me re-iterate, WITH A BANKRUPTCY ATTORNEY, THE INITIAL CONSULTATION IS USUALLY FREE!!!
And his or her advice may vary with the state you live in, as there are different state laws.
July 14th, 2010 at 7:02 pmI am speaking to you as a bankruptcy attorney. I make money by helping people file bankruptcy cases.
You and your husband need to consider the following:
I agree with the poster who referred you to Oprah’s debt diet. There are a lot of good tips there and we refer people to that site often.
If you have had 2 cars repossessed 3 years, you are managing your money poorly. Consider saving for a cheap but decent used car rather than paying through the nose on credit. Consider using public transportation before then.
If you file bankruptcy and are not up to date with payments, you surely will lose that car.
And how can you think about buying a house if you can’t manage the budget you have now?
First, look at your skill set – maybe you need more education to get better paying work.
Second, look at your budget – your income and outflow must get into balance.
Third, look at yourself. Do you really need to buy all the things you want to buy now? Get rid of credit cards and start living on cash/debit cards only.
Bankruptcy will cure your symptoms but will not cure your underlying problems.
July 14th, 2010 at 7:02 pmThere is some useful advice here.
July 14th, 2010 at 7:02 pm