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JRBAUTO
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Hello, I've suffered a financial meltdown and need a strategy on how to deal with my creditors prior to a suit being filed. 

 

My current strategy has been avoidance.

 

Should I talk to them? Not talk to them? Any thoughts?

I'm going to work and will check back after 6 pm est. Thanks in advance.

Edited by JRBAUTO
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You're looking at over $50k in unsecured debt here.  My biggest regret in my credit repair journey is that I didn't file bankruptcy when I had the chance.  If I were you, I would make appointments with 3 bankruptcy lawyers ASAP to get a feel for your financial situation.  You shouldn't have to pay anything for the initial consult.

Your other option is to liquidate as much of your property as possible, get all of your cash in a pile and then start calling creditors to let them know that whoever works with you first will get the best deal.  You're realistically looking at $15k-$20k to get everyone off your back.  If you can't get near this amount of cash together (which, if you could you probably wouldn't be where you are now), you're back to bankruptcy, or getting sued and trying to juggle 7 lawsuits that you will almost certainly lose.

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3 hours ago, JRBAUTO said:

Thanks. Can cc debt be discharged in bankruptcy?

Yes!  if you qualify for Chapter 7, all of your unsecured debt will be wiped.  Whatever negative info that has been reported to the credit bureaus thus far will remain for the full 7 years (basically late payments in your case), but once you file they can no longer attempt to collect and when your BK is complete, they have to report the accounts as 'included in bankruptcy'.  The drawback to Ch.7 is you could lose any property you have high equity in.  They have to leave you with a vehicle and place to live as long as you're able to keep making payments on those things and you don't have over a certain amount of equity.  Each state is different, but here in AZ the auto exemption is $6,000 in equity and the homestead exemption is $150,000 in equity.  If the value of the car/home minus what you owe is less than those amounts, you get to keep them as long as you can afford to keep making the payments.

Chapter 13 is different in that your ability to repay determines a monthly lump sum you will be required to pay for 5 years and that payment is divided up to repay all of your creditors.  Ch.13 is less desirable than 7, but in either case, it gets the creditors off your back and lets you sleep at night again.

But definitely talk to 3 or 4 lawyers to see what they have to say.  With a free consultation, you have nothing to lose.

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On 7/18/2017 at 4:15 AM, Harry Seaward said:  My biggest regret in my credit repair journey is that I didn't file bankruptcy when I had the chance.  If I were you, I would make appointments with 3 bankruptcy lawyers ASAP to get a feel for your financial situation.  You shouldn't have to pay anything for the initial consult.

My biggest regret in my credit repair journey is that I didn't file bankruptcy when I had the chance

Thanks for your help. I'm going to make some appointments and see which way is best for me. Just curious how would you qualify for chapter 7?

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12 hours ago, JRBAUTO said:

Just curious how would you qualify for chapter 7?

It's a very simple calculation.  It's your total household income vs. your state's median income for a family of your size.  If you're under, you qualify.  If you're over, there are several deductions that you may be able to apply to get your income under the median.

You can use this online calculator to give you a pretty good idea if you qualify or not.  Enter your zipcode at the very top (not in the 'talk to a lawyer' box) to get started.
https://www.legalconsumer.com/bankruptcy/bankruptcy-means-test.php

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