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Suggestion on BK


pelican
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Last year our annual income dropped by 35K, when I left my employer. We cashed out our retirement plans and depleted them along with our savings to prolong the credit card payments, as we thought I would be able to find work from our home.

In November 03, when we knew we would be in trouble come Jan 04, we sent letters to all of our creditors asking them to lower our cc int rates to prolong what we now know to have been the inevitable. They laughed in our face. Now, they've told us they did that because we were current and they had no reason to help us. Ridiculous.

So, here is the background to the question. We are 75K, probably more by now with interest and fees, in unsecured debt. Several have already been turned over to collection or attorneys and I've used the DV on them. (The attorneys responded, though with only a copy of the most recent stmt and the original creditor name, so I will be responding that they failed to meet the requirements next week.) But we have over 15 creditors, some of them big name, ugly people (Citibank, Discover, MBNA). We have barely enough money left at the end of the payroll for me to scrounge up change to send the letters certified mail and we are behind on our house and cars, and struggle with our utility payments, etc.

We have looked into bankruptcy (as I am currently being sued by my former employer for a company loan balance - completely fraudulent, but sued just the same and I've not slept since), but it's an investment of $12-1500 that we do not currently have. Is it worthwhile to continue this DV's in our situation (because there are so many and big names involved), or should we find the money for BK? After reading some of these postings, I realize a lot of these issues starting off as DV's end up in court. The very thought is terrifying to me, partly because we live in a very small rural town. Plus since this just started, I will have to continue with DV requests and filings and court appearances for the next 7 years (statute of limitations in TX).

Please advise your thoughts. I do know that I will have to get caught up on the house prior to filing or we will lose it, too.

From TX

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I've gotta agree with DocPC...time to talk with an attorney. You can find some links at the top will take you to TX BK info. You can also get a do-it-yourself book from NOLO Press "How to File for Chapter 7 Bankruptcy" that might give you some answers. I'm not positive, but I think Texas is pretty consumer friendly with BK and you'll almost certainly get to keep your house...

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SOL in TX is 4 years, but that still gives 'em plenty of time to catch up to you.

TX is extremely friendly for BKers, unlimited homestead exemption, one car for each licensed driver is exempt, and a very large personal item exemption.

If I were you, I'd find the money to file now before you find work. That way you'll be sure to qualify for a chapter 7. But as you already know, your house and cars need to be caught up. You can file before they're caught up, but the creditors can and probably will file a motion to lift the stay so they can go ahead with foreclosure/repo. Talk to an attorney, but I bet you could file a month before you have the loans caught up without any problem.

Here's a website specific to TX chapter 7 bankruptcy. that has alot of good info.

http://weberlaw.com/chap-7-overview.htm

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Ya thats some significant debt and if some is already in collection, then me personally I would file. I filed in 98 and i disputed them a couple of years after I filed and now all 3 reports show no bk on them. Good luck I know that most people really would try anything before filing a bk so I wish you the best of luck in what ever your decision is. xheadscratchx

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Hey pelican,

Your situation sounds like ours, and our decision was to file BK after exhausting our resources,like you. And so far, I'll tell you I wished we had done it BEFORE we depleted those resources! I have spent numerous hours slamming out DV letters, waiting, anticipating the next move, and now when the phone rings, things aren't so bad.... but it's still not over yet.

We are in the early stages of our BK, and it has not been filed with the court. I would suggest to go talk to a Bk Lawyer a.s.a.p., as from what I understand, the more negatives on your CR pre-BK, the harder it is to get them off. Looking at my CR now, NASTY!

Since I have met with the lawyer, I have not kept up with collection accounts. After DV process, our situation became: 2 lawsuits against us (one now a judgement), 2 MBNA Awards against us (we didn't protest the claim, let it go) and most of the collection accounts have been passed on to others. I really wanted to fight these guys, let me tell you! Discover and Citibank (the 2 lawsuits under one attorney) had zip for evidence, almost laughed when they sent me their so called validation (copies of bank statements, I could have printed them out.) That was it! And I have stockpiled all the violations the CA's have made. Geesh, could have a small army in court... But is it worth the effort?

I just feel I gave it a good run but is not cost effective for me to continue.

I have learned to live on minimal for the past 2 years and CREDIT CARDS? NEVER AGAIN!!!! They can take their fraud and shove it!

I feel really bad though, in this situation, but YES, Creditors really don't care and are not really willing to negotiate and offer help, like you we tried. As far as the mortgage? We were late ONE time and close to being late the next month . Then they,(CITIBANK), sent us a nasty letter advising on how we could sell our home if we couldn't make the payment

and demanded payment ASAP! But it was OK, when a few years back they neglected to pay our property taxes (we have escrot account) and we were unaware that our house was being put up for tax sale! Our names and property was printed in the local paper, how embarrasing that was!

Sorry, just venting... but we got behind on mortgage trying to keep up with the card payments and even sending more than the minimum and this is where we are today. Anyway, pelican, the best to you and if you need info or suggestions, feel free to PM me, would be happy to help!

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