Sometimes Not Worth Bothering To Go Bankrupt (?)
I own no house, have $40K in debt, own one car, have equity in a second whose payments are still being made. Self-employed. Married, 2 kids still at home. No land, no stocks, nothing but a small amount of money in the bank and the modest furnishings and clothing in our rental house. I consulted with a BK attorney and she basically said: just ignore the creditors. Bad debt lasts 7 years while BK lasts 10 on your credit history. I don't know if it's good advice, but the creditors have been calling less and less over time, even the second and third collection agencies to handle a particular account are not calling. I've kept one Mastercard (plus gas cards and others I have always paid in full each statement) because it is issued by the credit union where my savings/checking accounts are. It's kind of funny - when creditors do call, they always block caller ID, and I therefore know who it is: "UNKNOWN CALLER" or "OUT OF AREA" tells me all I need to know. They always hang up when the answering machine comes on. I've had my wife tell them that "John Doe" doesn't live here anymore. My wife's SS number is not connected with any of this debt, so, if we stay married, in a few years SHE could always apply for the home loan, and I guess we could work out a legal change of title later that would officially put my name on the mortgage/ownership documents... Is my lack of assets the only thing that has kept these things from turning into lawsuits? One of my creditors is owed about $19K. (All of this is unsecured debt, by the way). [SLIGHTLY OT]: I do believe all of these credit counseling services are funded by the credit card agencies themselves as a kind of brainwashing effort to make people keep paying and "avoid the shame" of bankruptcy. They don't bother to mention that in some cases you might simply ignore the creditor calls - they always dramatize these calls as a kind of "scary" daily occurrence - and don't you just want to get these people off your backs???
I am in similar situation. My credit card debt is almost $50,000 on two cards. Both have been in default for three months now. I have no assets. I have no house. I have only about $1000 in my 401K plan. I have a car which is worth about $9500 according to blue book. However, I still owe my bank $8500 on the car. So essentially I do not own the car. I do not have many furnitures. One old bed and one 4-year-old computer. No stocks. I am unemployed. I was laid off a year ago. I have about $20,000 student loan debts. I live with my parents and do not pay rents. I only have one checking account with $1000 in it. I am in my early 30s and have spent most of my life as a student (completed a PhD in science a few years ago). I had only been working for less than two years full time before my layoff. I decided to file Ch 7. Because once the economics turns around, I expect to find a job and make a good living. In California, the status of limiation is four years. Although right now I have nothing the banks can go after, the banks still have the option to go after me in the next four years. The banks can decide to sue me once I start working again in the next four years. And the banks can also decide to sue me if I have any inheritance in the next four years. For me, filing BK is to protect my future. And in my profession, BK is no black mark on the future of career advancement. I heard that in certain professions that require licences (for exmaples, accountant, stock broker, real estate agent, attorney...), BK can cause problem in the career advancement. But again BK is not a felony. BK is a perfectly legal procedure. BK is better than drunk driving or shoplifting. In addition to being paid by the CC companies, they dont mention that CCC type programs are looked at by future lenders as the same as a Ch 13. So why would you waive all the federal protection to go into those things.
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