Personal bankruptcy

[masondoggy]

wabrams:

Only 7 years AFTER they have been paid off.

Actually, I was mistaken: Bankruptcy’s (can depend on the state), judgements, and tax liens stay on 10 years after they are paid off. Creditors pretty much disregard all of them after the paid date is 2 years or greater.

Not true. As per the Fair Credit Reporting Act, all negative information must be removed from a credit report seven years after the date of first delinquency (the first missed payment), whether it was ever paid or not.

Bankruptcy’s/tax lien’s must be removed no later than 10 years after the date of discharge, judgements fall under the seven year rule. Some creditors may disregard them, but not all. If they disregard at all, you’ll get get socked with a much higher interest rate.

The poster who said consumer credit counseling is worse than bankruptcy is correct. I am a member of a credit related board and I cannot count the number of people who had their credit further trashed by these programs. For one thing, even though you may make your payment on time, many of these companies actually pay the creditors late, leaving many with a trail of late payments on their credit. And there is no recourse in this situation, their pretty much stuck with the trashed credit report, hoping to be able to get the lates removed through disputing with the credit bureaus. (which is a matter of luck, because the credit bureaus could care less what happened to you). One would think that you get a positive mark because you paid your debt, but this isn’t necessarily the case in the credit report world. If you have a charge-off or collection, you lose a certain amount of FICO points when it hits your report. When you go pay the account and it gets marked “paid” on your report, you don’t gain any FICO points back. In other words, you don’t get any reward for taking responsibility for your debt. Yes, the Christian thing to do is to pay your debt, but you get very little reward for it in the credit world. It’s the same way with consumer credit counseling. It’s often easier to get a mortgage with a bankruptcy than with a credit counseling notation on your credit. So the guy that paid his debts gets denied, while the guy who filed bankruptcy gets the mortgage. Not fair at all.

Many also do not realize that they can often negotiate with the credit card companies on their own. Many have hardship programs that work much the same as credit counseling.

For the OP: www.creditboards.com/forums/
(there is a bankruptcy forum)

 

[OutinChgoburbs]

First off, I’m glad you’re feeling better, Rayne. Your DH posted for prayers.

Second, both routes- bankruptcy (Chatper 13 or Chapter 7) and credit counseling- have their advantages and disadvantages. No one situation is the same. It’s up to you and your husband to make the choice.

Now, you hire a lawyer, or a credit counselor, the same way you hire anybody else. You ask people you know for references. You ask the lawyer/ counselor to sit down for a small fee or free, and ask questions, lots of them. Ask how they go about doing what they do. Ask for references you can contact. Check with the agency that regulates them (not the Bar in the case of the lawyer, but a state disciplinary committee) and see if that person has ever been reprimanded or censured.

That should do the trick.

 

[SeekerJen]

rayne89:

How does one find a reputable lawyer? I mean I don’t feel comfortable just flipping open the yellow pages. Thanks!

Other than the suggestions given by auppie, ask your pastor about parishoners who are also lawyers. Check the church bulletin.

I don’t know where you are in Michigan, but if you’re in the Detroit/Ann Arbor area, Ave Maria Radio’s website has a “Catholic Yellow Pages”. Here’s the page, “attorneys” are one of the choices in the pull-down menu.
avemariaradio.net/ad-directory/merchant-directory.php/0-0-0-0-1/

 

[wabrams]

masondoggy:

Not true. As per the Fair Credit Reporting Act, all negative information must be removed from a credit report seven years after the date of first delinquency (the first missed payment), whether it was ever paid or not.

Bankruptcy’s/tax lien’s must be removed no later than 10 years after the date of discharge, judgements fall under the seven year rule. Some creditors may disregard them, but not all. If they disregard at all, you’ll get get socked with a much higher interest rate.

The poster who said consumer credit counseling is worse than bankruptcy is correct. I am a member of a credit related board and I cannot count the number of people who had their credit further trashed by these programs. For one thing, even though you may make your payment on time, many of these companies actually pay the creditors late, leaving many with a trail of late payments on their credit. And there is no recourse in this situation, their pretty much stuck with the trashed credit report, hoping to be able to get the lates removed through disputing with the credit bureaus. (which is a matter of luck, because the credit bureaus could care less what happened to you). One would think that you get a positive mark because you paid your debt, but this isn’t necessarily the case in the credit report world. If you have a charge-off or collection, you lose a certain amount of FICO points when it hits your report. When you go pay the account and it gets marked “paid” on your report, you don’t gain any FICO points back. In other words, you don’t get any reward for taking responsibility for your debt. Yes, the Christian thing to do is to pay your debt, but you get very little reward for it in the credit world. It’s the same way with consumer credit counseling. It’s often easier to get a mortgage with a bankruptcy than with a credit counseling notation on your credit. So the guy that paid his debts gets denied, while the guy who filed bankruptcy gets the mortgage. Not fair at all.

Many also do not realize that they can often negotiate with the credit card companies on their own. Many have hardship programs that work much the same as credit counseling.

For the OP: www.creditboards.com/forums/
(there is a bankruptcy forum)

Everything you’ve said is true except for the fact that a debt doesn’t come off your credit report until 7 years after it has been paid down to a zero balance. The FCRA comes into play when you have a debt that you’ve paid off, but the creditor hasn’t shown that on your credit report.

 

[cargopilot]

Don’t do credit counseling. Wabrams absolutely, positively, knows what he’s talking about. Credit counseling looks as bad on your report as a bankruptcy. Don’t be fooled.

If you’re determined to trash your credit score, or your situation is so dire there is no way you can extract yourself from it, file chapter 7. At least you can discharge your debt. But try everything you can to avoid either. Sell stuff, cut back, make every penny count. Chances are, you can do it. It’s hard, and you’ll have to give up stuff you may not want to, but it’s do-able.

Some years ago, I became aware of just how fast and huge medical bills can get. Combined with living on the edge to begin with, it didn’t take long to realize we were sinking. We considered credit counseling and bankruptcy, but we chose the hard way, the way of honor. It was hard, very hard. We sold things we, and many others, consider necessities. We went very, very low, financially. But we got very creative, lean and mean. We learned what was really important in life was not a bunch of stuff. We dug ourselves out the hard way, and wound up better, stronger and smarter than ever before, and I have the credit score to prove it.

Don’t put a banner on your credit report publicly admitting you’re unable to manage your affairs, through credit counseling, and don’t steal from those who provided you with goods and services by avoiding your debt behind bankruptcy. If you can work and earn a paycheck, you can do it. Take the high road of honor and self-respect.

 

[cargopilot]

Oh, Rayne89,

I noticed your profile says you’re homeschooling. I’m going to assume that being a stay at home Mom is one of your highest priorities, which is as it should be. Your work at home has value that just can’t be measured with a paycheck, so if anyone tells you to get a job, you just tell them you already have one.

I am very confident you can really get through this thing without resorting to bankruptcy or credit counseling. Remember, the attorneys will be taking your money, and have no interest in helping you solve your problems with out their ‘help’. They will convince you that your situation is so hopeless that bankruptcy is the only way to go. I have learned some tricks, the hard way, that are very effective. If you feel like it, please feel free to PM me, and I’ll be of whatever help I can. Remember, you CAN beat this thing.

 

[auppie]

wabrams:

Auppie,

I’m really curious as to which lender you used to get a home loan while still in credit counseling. Who you mind sharing that with me? It could be really useful in my line of work.

It was a local place here in Colorado, might not work in South Carolina.

 

[masondoggy]

wabrams:

Everything you’ve said is true except for the fact that a debt doesn’t come off your credit report until 7 years after it has been paid down to a zero balance. The FCRA comes into play when you have a debt that you’ve paid off, but the creditor hasn’t shown that on your credit report.

creditinfocenter.com/legal/FCRA.shtml#605

§ 605. Requirements relating to information contained in consumer reports [15 U.S.C. § 1681c]

   **(a) Information excluded from consumer reports. Except as authorized under subsection (b) of this section, no consumer reporting agency may make any consumer report containing any of the following items of information:**

(1) Cases under title 11 [United States Code] or under the Bankruptcy Act that, from the date of entry of the order for relief or the date of adjudication, as the case may be, antedate the report by more than 10 years.(2) Civil suits, civil judgments, and records of arrest that from date of entry, antedate the report by more than seven years or until the governing statute of limitations has expired, whichever is the longer period.(3) Paid tax liens which, from date of payment, antedate the report by more than seven years.(4) Accounts placed for collection or charged to profit and loss which antedate the report by more than seven years.(1)(5) Any other adverse item of information, other than records of convictions of crimes which antedates the report by more than seven years.1 **(b) Exempted cases. The provisions of subsection (a) of this section are not applicable in the case of any consumer credit report to be used in connection with

** **(c) Running of reporting period. **

(1) In general. The 7-year period referred to in paragraphs (4) and (6) ** of subsection (a) shall begin, with respect to any delinquent account that is placed for collection (internally or by referral to a third party, whichever is earlier), charged to profit and loss, or subjected to any similar action, upon the expiration of the 180-day period beginning on the date of the commencement of the delinquency which immediately preceded the collection activity, charge to profit and loss, or similar action.

the FCRA says nothing about the debt needing to be paid to fit this rule. Although I’m sure many creditors will have consumers believe differently, the law is pretty clear about it. The only thing the law specifies that must be paid are tax liens. If someone has an 8 year old unpaid collection account still on their report, they can dispute it and it must be removed. (The credit bureaus don’t always remove it automatically, that’s why one must fight to get it removed)

 

[rayne89]

Question out of curiosty? Can a credit card company put a lien on your house?

 

[cargopilot]

rayne89:

Question out of curiosty? Can a credit card company put a lien on your house?

No. Credit card debt is unsecured.

 

[rayne89]

cargopilot:

No. Credit card debt is unsecured.

I thought they we trying to scare me. I love credit collection people.

 

[Fergal]

rayne89:

Ok, as depressing and humiliating as it is hubby and I have figured the only way to get out from this massive debt we have is to file for bankruptcy.

What is depressing and humiliating about honesty? If there is anything depressing and humiliating about it then it comes from a human viewpoint. Nothing to worry about there.

God respects honesty no matter how difficult it is.

 

[masondoggy]

rayne89:

Question out of curiosty? Can a credit card company put a lien on your house?

In order for credit card company or collection company to do anything to you, they must go to court and win a judgement against you first. Every state has different laws on how they can collect on a judgement. Some states allow a lien on a house. Some states allow wage garnishment or garnishing of bank account funds. It all depends. But the creditor must first win the judgement. Some creditors will threaten to do this and never follow through. It 's expensive for them to sue, so if the debt is small, chances are they will never follow through.

Collectors on the phone generally are abusive and will use scare tactics to get people to pay. They break the law all the time. I suggest if your being hounded by creditors, to visit the link I previously provided and learn to protect yourself before you pay any collector on the phone. They will burn you if you don’t know what you are doing. (I am not advising NOT to pay, if you are capable of paying, there are steps you must take to protect yourself first)

Who threatened to get a lien on your house? What is the debt for and how old is it?

 

[Rebecca_New]

If at all possible you should pay your debts, even if it takes getting another job or making other sacrifices. Ask the Lord to help you do the right thing. Tell your creditors that it is causing you "extreme anxiety " for them to call you an legally they can not keep calling. This could be a conversion experience for you-don’t miss the chance to change for God.

 

[masondoggy]

Rebecca New:

If at all possible you should pay your debts, even if it takes getting another job or making other sacrifices. Ask the Lord to help you do the right thing. Tell your creditors that it is causing you "extreme anxiety " for them to call you an legally they can not keep calling. This could be a conversion experience for you-don’t miss the chance to change for God.

I agree and I’m not advocating skipping out on our debts. But there are some people who are not able to pay for various reasons and we cannot pass judgement on them (especially those who need to resort to bankruptcy, it’s a humilitating enough experience for them). There is nothing wrong with protecting ourselves in the process.

Telling your creditors verbally might make them stop calling, it most likely will not unless you put it in writing (sent certified mail, ya need proof). And this only applies to third party collection agencies, not original creditors.

 

[DonnaML]

This issue has been weighing so heavily on my mind that I thank you for helping me feel less alone. I will pray for you and your family. God bless.

 

[Cathlicrat]

Scanner:

Find a reputable lawyer quick - they are chaning the laws in favor to the credit card companies and banks (thanks Bush and Republican Congress - can always count on you to know which side you are on!)

I agree. This was an outright attack on the poor while major corporations get away scott free with all their loop holes and high price attorneys. If a Democrat gets elected, I hope they reverse this evil and enact measures against the credit card companies in not issuing credit to people whose income doesnt support the limits they offer on those cards vs what someone earns.

I also will be filing BK Ch 7. The position I ended up in had nothing to do with over buying material things, but companies closing down and other jobs not paying fair wages. My credit will shoot up faster with a BK, and I will never again own a credit card. Its foolishness to trust an employer, not to mention your govts effects on them as well …

Maybe I should go to India for an American job… almost sounds like it could be a country song

 

[Tibbar]

Cathlicrat:

I agree. This was an outright attack on the poor while major corporations get away scott free with all their loop holes and high price attorneys. If a Democrat gets elected, I hope they reverse this evil and enact measures against the credit card companies in not issuing credit to people whose income doesnt support the limits they offer on those cards vs what someone earns.

Maybe I should go to India for an American job… almost sounds like it could be a country song

Father…is that you? For a moment there you sounded like my Pastor. But really, I know this man…outwardly, a good Catholic, and quite active in his community who even ran, albeit unsucessfully, for office a few years back. He happens to be a lawyer and filed for bankruptcy over 3 times. Each time, he made out like a bandit. I think the recent laws were written with that guy in mind. Cause if he’s doin’ it and getting away with it, you can bet there are countless others who have been doing the exact same thing and “cheating” the system.

It’s best not to spend more than you can afford and to make systematic payments of one’s acquired debt. As for outsourcing to India, you can thank Clinton and his cronies as well as the “moderate,” “centrist,” “fair-minded” Republicans like McPain for NAFTA and GATT. Meanwhile Confucius say, “Thanks arot Char-rie. You good sport.”

 

[Cathlicrat]

I agree…I am anti globalization caus fairness doesnt exist. NAFTA, CAFTA, GATT…have done nothing but kill Americas poor and middle class who were the backbone and done nothing but enrich the already greedy and wealthy.

 

[Nan_S]

If you are still considering filing a bankruptcy you need get an attorney soon and make sure the petition is filed before Monday, October 17th, which is only seven weeks from now. That’s the day the new law goes into effect. The rules get a lot tougher starting then.