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pulpfiction0

Contemplating BK..File now, or wait?

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My current situation:
-Income approx 70k (above median for my state)
-Mountain of CC debt (Amex 10k/Discover 8k/Citi 8k/Chase 5k/Credit Union 8k/Barclays 6k/Synchrony 5k/Several misc cards at around 1k per.  Total is somewhere in the neighborhood of 60-65k. Last payment was in late winter..most are charging off very soon.
-Student loan debt of 100k.  Currently in forbearance.  Yes, I realize these aren't dischargable, but still handy to include in a 13.
-Own a condo (mortgage balance of 190k) and have a $300/month car payment Both are in good standing.

I've consulted with several BK attorneys.  After running the means test, I don't qualify for Ch7.  My Ch13 payment would be 800/month.

I'm contemplating trying to fight the upcoming storm of lawsuits, for two primary reasons:
-Need to save up an emergency fund.  If I were to file today, I'd have virtually nothing left each month after my Ch13 payment.  Not to mention the $3500 attorneys fees.
-My income will increase by about 10% each year, beginning in late 2019.  
According to the attorney, the trustee in my district does not request annual tax returns..just the previous few months prior to filing.  So if I can delay filing until perhaps mid 2019, my payment will be a lot more 'doable' shortly after filing.

All cards have arbitration clauses, except for the credit union.  I'm comfortable digging in and fighting to delay filing the BK13 for the next 8-12 months, but realize that I am dealing with some of the most aggressive OC's out there.  If things get too hot to handle, I always can file sooner.  The credit union card worries me, but otherwise feel as if I can at least significantly delay the process.

Your thoughts would be highly appreciated.  Thank you.
 

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As my name here implies, I am not a fan of BK.  For some people, it is a godsend.  For others, a disaster.  It's not always the panacea the BK lawyers like to make it sound like.

My take:  if you can get a better deal by waiting, then wait.  You can always file BK later, even after you get a judgment.

Something to consider:  about 2/3 of Chapter 13 BKs end up failing, because life happens (illness, disability, job loss).  There is no job security in this world anymore.

Note that just because creditors can sue, that doesn't mean they will.  I had a similar debt load, spread across multiple (close to 20) creditors.  I only had 3 lawsuits, 2 from OCs and 1 from a JDB.  I beat two of them, and got a favorable deal on the third (consent judgment with a very affordable monthly payment).

It usually takes time for them to file suit.  Usually about a year after default.

Note that since you have a good income, presumably a job, which is reflected on your credit reports, that does make you a target for lawsuits.  They like to look for wages to garnish.  If you can remove all references to employment on your credit reports, that will make you less of a target.

Be aggressive with third-party debt collectors.  Send a DV/dispute letter every time a new one contacts you.  Know your rights under FDCPA.  If they violate, sue them.  That gets you on WebRecon, the list you want to be on, as the creditors/collectors are more likely to leave you alone then.

 

 

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Another thought: you might be better off living with judgments than filing BK.  A judgment creditor can only garnish 25% of your wages.  And only one garnishment can be in effect at a time.  

You will need to be careful with bank accounts, to avoid them being levied.

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19 hours ago, pulpfiction0 said:

All cards have arbitration clauses, except for the credit union.  I'm comfortable digging in and fighting to delay filing the BK13 for the next 8-12 months, but realize that I am dealing with some of the most aggressive OC's out there.

If it's the OCs that sue you, bear in mind that most aren't deterred by arbitration if the debt is greater than $10k.  If it's less than that, some may walk away, but others, like Discover and Cap1 will arbitrate a $1,000 debt.

My biggest regret is not filing Ch.7 when I had the chance.  However, Ch.13 is a whole 'nother animal.  As @nobk4me pointed out, the vast majority of Ch.13s fail, so I would have to think long and hard about going that route, if I were faced with another financial crisis.

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