easy619

Should I file bankruptcy?

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Here's my situation: I currently have 5 credit cards in default (total of about 15k), with no current means to pay any of it off. I only make about 1000$ a month, so it seems very doubtful that i could climb out of this hole. I have recently been served a summons by a JDB, and i can only imagine that this will continue to happen. What is worse for my credit, having all of this unpaid debt or bankruptcy? If i can't pay it off in the foreseeable future, should i just file BK?

Also, I live in California if it makes a difference. I own next to no property, have a car loan that i'm still paying on. What would the consequences and challenges of bankruptcy be? I had originally planned on trying to pay my debts eventually, but its seeming more realistic that a bankruptcy would be off my record possibly sooner than i could imagine paying off my bills. I need help..

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Well if your being sued by a junk debt buyer your in the right place and you can most likely beat them. For me personally 15k is not an amount to file for BK. No one can tell to file bk or not that is a choice you will have to make. Now if all 5 CC's sell to a junk debt buyer then once again your in the right place. I have not dealt with a original creditor suing so someone else will have to tackle those for you.

Lets tackle that summons now answer these questions so the board knows whats going on.

http://www.creditinfocenter.com/forums/there-lawyer-house/242744-qs-answer-when-posting-forum-please-read.html

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I actually have a thread going in the Lawyer in the House forum, and have been receiving plenty of great advice and tactics from all of the knowledgable and helpful members of this board. I actually feel somewhat confident in my chances to win the lawsuit, but I'm worried this cycle may just continue. IE, i win this suit, then JDB sells account to different JDB, and on and on.

Thanks for the concern, but I don't want to have multiple threads going on about the same thing, so i'll leave my JDB fight in the other thread. I was only wondering if I should be considering BK.

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Hi easy619,

Ultimately it's up to you to decide, given your situation. But a few things for you to consider:

How long until the statute of limitation on the accounts, expires? For help calculating, see link at bottom of this post.

When my spouse was sued in 2011 by a jdb, he was about $18,000 in debt.

He was considering bankruptcy. But given that his sol on all accounts was coming up at the end of 2012/beginning of 2013 for a few...we decided against it.

We lucked out. One account sent him a 1099 c (basically meaning they were no longer pursuing the debt)...!

We (of corurse) had to claim it at the end of the year...but that was his biggest debt w/$6,000.

The next largest we were already in court on ($3,000). We won the case at the beginning of this year, (2012), dismissed w/out predjudice.

We learned so much from the process of the lawsuit (and of course, being a member here)....that we chose to just hang in there, with the others. It was so close to sol. Most have been sold several times (making it more difficult for them to trace chain of ownership, should they choose to sue).

From time to time, we'll get a call or letter from a new collection agency. But with all we've learned, we tend to stress them out more than they do us. :lol:

Soon, we'll be sending in letters to have most (if not all) removed from his credit report, as zombie debt.

Had he filed bankruptcy, he'd still have another seven years to go (before it was capable of dropping from his record). :(

But, since we waited it out, and played the game w/the jdb's (i.e. sent debt validation letters, spoke w/them on the phone, sent c&d's to stop calls, etc.)......we can now see the light at the end of the tunnel. :mrgreen:

Hope this is helpful!

On edit--p.s.

We had no assets at the time my spouse was sued.

Our car was paid for (and used). We rent an apt., etc.

Given that you have a current car loan, you may want to thoroughly explore your options, in regard to bankruptcy. But also check how long before the sol expires on your credit cards, AND how that effects your current car loan (as I'm sure you don't want to lose your car).

Here's some links from the board:

SOL:

Statute of Limitations on Debts

Personal Bankruptcyinfo.:

Bankruptcy Chapter 7 Personal Consumer Creditors File

Edited by tigger

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The Statute of Limitations on the debt isn't necessarily what you need to be concerned over, given your current circumstances. I would be more concerned about the SoL on judgments.

If you are being taken to court this is how long they can continue to go after you if they win the case. California has a 10 year (tolling) SoL on judgments with a 10% annual interest rate added on top. So the amount they potentially win can grow quite a lot. The tolling means if you move out of state or they can show you actively evaded their efforts to collect after the lawsuit has been won, the time they can show you did that is paused on the clock...so ten years can be stretched longer in those circumstances.

If they sue you and your income situation improves they will have quite the hammer in hand. You don't mention an amount on the suit, but let's say it's the full estimated $15k and in five years you get a decent job. By that time it would have nearly doubled to $24,156. Ouch.

But, bankruptcy is a personal decision. Numbers aren't the only thing to look at. It can have a very negative effect outside of the monetary/credit issues. And don't forget that in a chapter 7 lenders don't have to re-affirm a loan...so if your car is worth more than what you owe (which is possible if you are down to the last year or two on the note), the lender may opt to just take it and not let you pay it through.

Your best bet is to speak to an accountant or attorney and see if the numbers really add up and then speak to a friend or pastor that you can trust to guide on the personal (non-money) side of the issue before making a decision.

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