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Bankruptcy Question (1 Viewer)
- Thread starter Zegras11
- Start date
DA RAIDERS
Footballguy
no. not if you can pay for it.
if you go chapter 13, you will get to keep the car, house, etc. but you have to meet the financial guidelines to dump everything else.
if you go chapter 13, you will get to keep the car, house, etc. but you have to meet the financial guidelines to dump everything else.
Chadstroma
Footballguy
My understanding is that Chapt 7 got much harder to qualify for these days. Chapt 13 might be a possibility but you still have to show that you have financial hardship outside of just not wanting to pay something.
Did you talk to a divorce lawyer about having her be responsible for that debt? I have seen it in divorce papers that certain debt is ruled to be the responsibility of one person or the other.
You could take a charge off on that. It will jack your credit score up just as bad a BK in the short term but long term easier to rebuild from and qualify for other loans for.
Did you talk to a divorce lawyer about having her be responsible for that debt? I have seen it in divorce papers that certain debt is ruled to be the responsibility of one person or the other.
You could take a charge off on that. It will jack your credit score up just as bad a BK in the short term but long term easier to rebuild from and qualify for other loans for.
brun
Footballguy
May want to talk to a lawyer. Depending on the outcome of that discussion you may do a means test to see if you're able to pay your debt-expenses. Typically you aren't going to include your car, retirement accounts, in your bankruptcy.
I'm guessing you just don't want to be liable for debt you feel is hers. In that case as @Chadstromasaid, you probably really need a different solution.
I'm guessing you just don't want to be liable for debt you feel is hers. In that case as @Chadstromasaid, you probably really need a different solution.
fruity pebbles
Footballguy
I wouldn’t declare bankruptcy over 30k unless there were no other option. Gonna do a lot more damage to your credit than that.
Juxtatarot
Footballguy
A divorce decree is only applicable between the two parties, not the creditor. The creditor can still collect as they see fit.Chadstroma said:
Chadstroma
Footballguy
Yes, agreed. I didn't say it would stop collection efforts against him if she didn't pay.
Juxtatarot
Footballguy
Sure, I understand. I just have seen this as a source of confusion for people for years so I wanted to provide clarity for others reading the thread.
Chemical X
Footballguy
filing BK over 30k in unsecured debt is not what i would do. that said, a lot more needs to be known about your financial means. can you leverage a retirement plan to pay this debt and possibly negotiate a settlement with card company? other equity, debts? etc.
Zegras11
Footballguy
husband rang up $60k in CC debt. Wife getting $30k. Might make $2k per month and have kids half of the time. Could possibly get half of his $18k 401K to pay some of it. No other debts or equity. Won't have any extra $ to really pay this down.
Juxtatarot
Footballguy
Based on that, it is likely she could file Chapter 7 to get rid of the credit card debt and keep the car.
Chemical X
Footballguy
BK7 is the nuclear option and an absolute credit wrecker. CC debt is the $h!t. How did they get access to 60k is amazing. It’s unsecured debt. Offer the CC company like 5k to settle and say it’s that or BK. Maybe they bite, knowing the alternative is zero recovery. Remember, i don’t think a BK7 stops issuance of a 1099.
Zegras11
Footballguy
Husband rang up $60k on a dozen cards in four years. He did all the finances and she had no clue he'd done that.
Juxtatarot
Footballguy
1099-C? You don’t get one for debts discharged in bankruptcy.
Chapter 7 hurts credit, of course, but she can get a few credit cards after discharge (and use them responsibly) and if she continues with the lease payments, her credit will be improving. Anyway, who knows? Her credit could be a mess now.
Zegras11
Footballguy
Score is very good now. Will go into dumper if BK. But won't be able to buy a house in 2 years with that debt. Income could go way up to like 6k/mo in 2 years
Juxtatarot
Footballguy
Zegras11
Footballguy
It's like 768 now. I think they kept giving him the CC's because he always made the payments. Just insane to ring up $60k in 4 years.
The lease has zero value and would not be impacted by any bankruptcy unless he included it and wanted to get out of it.
Chadstroma
Footballguy
You can get a credit score up pretty quickly after a BK. You are still limited in your availability to credit even with the reestablished credit. Some lenders will decline you with the BK even if your credit score is 800. For home loans, unless you have a significantly large down payment, you will need to wait two years from discharge on a chapt 7 to get a FHA. You can get a FHA loan even while in chspt 13 with 12 on time payments made and trustee approval.
E Street Brat
Footballguy
Sunspot hubby sure had a real good time.
Chemical X
Footballguy
yeah, I play in the commercial field and personal is not my expertise. that said, timing of a bk is important with the credit card. you need to file prior to debt cancellation, if you file after its not a dischargeable debt, its income technically.
maybe in this case if income has a chance to increase, call the card company and claim hardship and seek a forbearance or period where payments aren't required. while you might be able to increase your credit score post bk, that bk will be an auto denial cases. I've done a lot of credit work sub $1.5mm and a bk within 5 years is pretty much decline. that doesn't mean you wont be able to find an auto loan at 23% or so.
Juxtatarot
Footballguy
She won't need to worry about tax issues with cancellation unless she makes some kind of settlement agreement with the lender. It seems like the accounts are currently being paid satisfactorily since she has maintained a high credit score.
I don't have experience with commercial loans but it makes sense that a bankruptcy kills your chances with those. As also mentioned by Chad, mortgages can be difficult to get for a few years. Car loans? They are easy to get and I can see her getting better than 23% after her lease has ended in 18 months. I wouldn't be surprised to see her get well under 10% if she plays her cards right. Maybe even under 5%.
To be clear, though, I'm not recommending she file. I don't have enough info to have a definite opinion.
