[RedSox88]

Ok so even though I am going to preface this by saying I'm asking for a friend (which I really am) no one will believe me and that's fine and I don't care. So before all the stop gambling comments come in I'm not asking about me and this person who wants to file doesn't even gamble. He messed up starting a business and now owes so much unsecured debt ( around $120,000) he just feels overwhelemed.

He already checked around and he knows that his type of debt does qualify for bankruptcy relief but he just has lots of questions so I figured I'm sure bankruptcy and gambling goes hand in hand, so was curious if anyone has. Of course I'm sure no one likes to admit it but in your response you can just say I know a guy who did and.....

Anyways he just wants to know the consequences obviously the one plus is getting 120K wiped out but could the negatives possibly outweight this? I think it stays on your credit for 10 years which yes is bad but a fresh start and no debt has to outweigh this no?

Also he rents, doesn't own a car and has barley any assets, so he certainly qualifies and they can't liquidate any of his assets.

Any who I told him I would ask around, my personal opinion is dont do it but on the other hand if you make a small salary and owe 120K Im sure it seems like a decent option.


Thoughts??

[TheMoneyShot]

There are several things you need to weigh out before filing bankruptcy.

I recommend never filing for bankruptcy with a payment plan. I forget which Chapter this is? But basically by law... an attorney will make you file under this Chapter when you 1. Owe taxes to the government. 2. Late (on record) with any house payment.

You cannot file bankruptcy if you recently made a purchase on your CC. I believe it must be 180 days minimum after last transaction on any of your CC's.

I would only go the bankruptcy route if I can fully 100% get everything discharged.

If you own a car... and it's paid off... the bankruptcy court will not go after it. If you have a car that you're making payments on... it's up to you if you want to continue paying on it...

If you own a home... it's up to you if you want to continue to make payments on it or let it go.

You'll get a pre approved cc within 60-90 days after your bankruptcy is officially discharged.

Everyone who's bankruptcy is fully discharged and official... usually starts with a credit score of 630-640. Hard to believe... but it's true.

This is probably enough information to get you started.

[mohye1980]

Avoid bankruptcy at any cost. It will ruin your credit. I am in financing and I can tell you from a lenders point of view you are pretty much garbage and won't be touched by any reputable bank/lender. Sometimes you can get the debtor to agree to a settlement for less than what is owed on the balance. There are options and you should look into them. Best of luck to your friend.

[mohye1980]

[QUOTE=TheMoneyShot;25033983]There are several things you need to weigh out before filing bankruptcy.

I recommend never filing for bankruptcy with a payment plan. I forget which Chapter this is? But basically by law... an attorney will make you file under this Chapter when you 1. Owe taxes to the government. 2. Late (on record) with any house payment.

You cannot file bankruptcy if you recently made a purchase on your CC. I believe it must be 180 days minimum after last transaction on any of your CC's.

I would only go the bankruptcy route if I can fully 100% get everything discharged.

If you own a car... and it's paid off... the bankruptcy court will not go after it. If you have a car that you're making payments on... it's up to you if you want to continue paying on it...

If you own a home... it's up to you if you want to continue to make payments on it or let it go.

You'll get a pre approved cc within 60-90 days after your bankruptcy is officially discharged.

Everyone who's bankruptcy is fully discharged and official... usually starts with a credit score of 630-640. Hard to believe... but it's true.

This is probably enough information to get you started.[/QUOTE


this is 10000% bullshit and false. Where do you come up with this garbage?

[l7ustin]

Happened to someone in my family and they described it as one of the most stressful and shameful things that ever happened to them. They fought low self esteem and felt very embarassed....idk if thats everyone or just them

[TheMoneyShot]

Avoid bankruptcy at any cost. It will ruin your credit. I am in financing and I can tell you from a lenders point of view you are pretty much garbage and won't be touched by any reputable bank/lender. Sometimes you can get the debtor to agree to a settlement for less than what is owed on the balance. There are options and you should look into them. Best of luck to your friend.

1. The settlement with the debtor goes on the person's credit score. It's just as bad as a discharge on a report with a creditor. Why would you want to settle a debt and still have the exact same poor credit score?

2. After a bankruptcy... within 2 years... you'll have a chance at a 700+ credit score. You'd never achieve this with $100,000+ of personal debt. I'm sure this person's score is around 510-525 right now.

[mohye1980]

1. The settlement with the debtor goes on the person's credit score. It's just as bad as a discharge on a report with a creditor. Why would you want to settle a debt and still have the exact same poor credit score?

2. After a bankruptcy... within 2 years... you'll have a chance at a 700+ credit score. You'd never achieve this with $100,000+ of personal debt. I'm sure this person's score is around 510-525 right now.

A settlement and a bankruptcy are not looked at as the same thing. This is a misunderstanding a lot of the public like yourself have. When it comes to credit risk a bankruptcy makes you the most likely candidate to default on payments and most institutions won't talk to you and that's for at least 10 years sometimes more. Settlements on your credit are nowhere as bad. Both are very very different.


I've analayzed thousands of credit reports and I can tell you it takes a hell of a lot longer than two years out of bankruptcy and your score is 700. I've only seen it once in over 10 years, but it was done by a credit analyzer and she only did it for medical payments and stil paid on her ************ so this was a very unique situation.

So it is very very unlikely you will have a credit score anywhere near 700 2 years out of bk. I would say maybe like 4-5 years at least

[TheMoneyShot]

I also want to add something else about "settling with a creditor or cc company."

Let's say you have a cc and you owe $10,000 on it. You haven't paid on it in a long time and it goes into collection. The cc company offers you a deal. Give us $3,000 and we can wipe away the other $7,000. You think this is a deal of a lifetime!!! Right? WRONG! There are new tax laws about this...

Let's say you accept the deal. You pay the $3,000 thinking it's going to save you $7,000. Around tax time... you are suppose to claim the $7,000 savings on your taxes. I think it's a federal tax law. You must pay tax on the $7,000 savings.

1. You get a bad comment on your credit report even with the settlement.

2. You have to pay federal taxes on the $7,000 savings.

3. You lost $3,000 on the settlement thinking you were doing the right thing. Could of kept the $ in your acct.

Bankruptcy is the only way to go.

[TheMoneyShot]

A settlement and a bankruptcy are not looked at as the same thing. This is a misunderstanding a lot of the public like yourself have. When it comes to credit risk a bankruptcy makes you the most likely candidate to default on payments and most institutions won't talk to you and that's for at least 10 years sometimes more. Settlements on your credit are nowhere as bad. Both are very very different.


I've analayzed thousands of credit reports and I can tell you it takes a hell of a lot longer than two years out of bankruptcy and your score is 700. I've only seen it once in over 10 years, but it was done by a credit analyzer and she only did it for medical payments and stil paid on her ************ so this was a very unique situation.

So it is very very unlikely you will have a credit score anywhere near 700 2 years out of bk. I would say maybe like 4-5 years at least

I'm not misunderstood sir. I know this. I've studied this.

[Nick Papageorgio]

Break your laptop like you promised.

[GunShard]

Your friend should of listened to Mark Cuban:

[Slick Lizard]

If your friend has no assets to speak of and this amount of debt is insurmountable given present income, bankruptcy can be a viable option however without specifics it is impossible to give sound advice. He should contact a REPUTABLE lawyer who specializes in bankruptcy and have his specific case analyzed. I wouldn't advise using the guy on a local billboard that advertises doing a bankruptcy for a $50 pizza gift card. This is a matter that needs to be handled thoroughly and precisely, do not go cheap with a lawyer. Once a bankruptcy is done, its done, and the consequences are with you for years but with the details that were given, it may be the best option and if so the benefits will far outweigh the consequences.

[TheMoneyShot]

Break your laptop like you promised.

What are you even talking about Papa Shango?

[TheMoneyShot]

Your friend should of listened to Mark Cuban:

Interesting video Gunshard. I like Cuban because he tells you like it is... but in order to go into your 1st business... you need a loan from someone to get it started. I don't know why Cuban said that? Cuban is naturally on an entirely different level... than anyone when it comes to money... and using leverage etc.

How else are you suppose to go into business without funding? Naturally someone is going to make money off of you (interest wise) on your first business. Don't understand Cuban on this one.

[Nick Papageorgio]

What are you even talking about Papa Shango?

http://www.sportsbookreview.com/foru...ent-state.html

this redsox guy a joker

#neverforget

[opie1988]

I would be VERY wary about taking advice from anyone on this forum....and specifically in this thread

[unusialsusp5]

just declare bankruptcy. don't file. half the creditors will go away. the other half might sue eventually but you can fluff them off in court. agree to make payments and then don't do it. they would need a judgement enforcement team to try to get you to pay. most don't have one. they (debt collection attorneys who now own your debt, the original creditors are gone) tend to concentrate on people who pay and let the stubborn ones alone. they have so many files they can't enforce them all. they try to shame you into paying but don't. in 7 years you will be debt free and can get cards again. certainly, avoid collection agencies as they can do nothing. they sell the bad debt to attorneys in your state for 6% of their value. the attorneys try glean as much as they can knowing they will never get the full amounts. no such thing as debtors prison, so stand up to them. they will go away. filing bankruptcy too expensive to bother with. just declare it. courts only interested in the 40.00 filing fee attorneys must pay to sue you. they herd them in like cattle every tuesday and then only the timid settle.

[TheMoneyShot]

just declare bankruptcy. don't file. half the creditors will go away. the other half might sue eventually but you can fluff them off in court. agree to make payments and then don't do it. they would need a judgement enforcement team to try to get you to pay. most don't have one. they (debt collection attorneys who now own your debt, the original creditors are gone) tend to concentrate on people who pay and let the stubborn ones alone. they have so many files they can't enforce them all. they try to shame you into paying but don't. in 7 years you will be debt free and can get cards again. certainly, avoid collection agencies as they can do nothing. they sell the bad debt to attorneys in your state for 6% of their value. the attorneys try glean as much as they can knowing they will never get the full amounts. no such thing as debtors prison, so stand up to them. they will go away. filing bankruptcy too expensive to bother with. just declare it. courts only interested in the 40.00 filing fee attorneys must pay to sue you. they herd them in like cattle every tuesday and then only the timid settle.

I see where you're coming from. But, the fee for filing a legal "straight" bankruptcy isn't expensive. Single $700. Married $1,200 in Michigan. What I mean by "straight" bankruptcy... you do all the work for your attorney. You add up all of your personal debt. You calculate everything. Basically do your own accounting. And your attorney leads/guides you in the proper direction. Now, your bankruptcy would get expensive if you "file to pay your debt back with payments." If your attorney sets it up this way... I would question it. The attorney might be out to make a buck on you... a profit. Again, I wouldn't ever do a bankruptcy with payments. It's not worth it.

If you do decide to not file bankruptcy and let your credit clear on it's own... it could take 7-10 years naturally. You'll pay higher interest on car loans... any type of loans etc... and some loans you won't even be approved for. That's a long time to not have any credit.

[grease lightnin]

Pay your debts

[USCPHILLYGUY]

as opposed to asking for advise here, why not talk to an atty (I'm assuming free initial consultation). Bankruptcy laws changed about 5 years ago and though I'm not sure if this applies to a business bankruptcy, a personal bankruptcy cannot be completely wiped away (you pay nothing) if you make what the mediun salary is in the state you live in (I.E. You file bankruptcy but are making 40k a yeAr, the average salary in your state is 38k - you then have to go on a payment plan & repay most creditors).

Good luck with things.

[opie1988]

Greaser and Philly get it.

[unusialsusp5]

they get it if you want to be a good and honest person. but the fact that all these debts end up with a debt collection attorney who only payed about 6% to buy them from a collection agency and then attempt to collect 90-100% for a loan they didn't even originally issue makes you want to not pay them. sure you should have paid the original creditor before they charged it off (banks get all their money back on a charge off anyway) but debt collection attorneys are nothing but vultures so stiffing them is actually fun.

[jjgold]

I might after super bowl to bail out

[RedSox88]

Thanks for all the replies guys, I understand he's not going to make his decision based off a forum but you all actually did make alot of valuable points and this thread was alot more controlled and professional than I thought it would be.

Thanks again for all the info guys.

[TheMoneyShot]

as opposed to asking for advise here, why not talk to an atty (I'm assuming free initial consultation). Bankruptcy laws changed about 5 years ago and though I'm not sure if this applies to a business bankruptcy, a personal bankruptcy cannot be completely wiped away (you pay nothing) if you make what the mediun salary is in the state you live in (I.E. You file bankruptcy but are making 40k a yeAr, the average salary in your state is 38k - you then have to go on a payment plan & repay most creditors).

Good luck with things.

I believe it's current debt amount (monthly payments) based on current monthly income. They also factor in overall cc debt and interest percentage. I don't know the exact mathematical formula...

But if you're bringing home 40k a year on paper... and your debt is 80k... I believe you can wash the entire debt away... as long as you don't owe any back taxes to the IRS and weren't late on any house payments.

If I was in that boat... I'd get it done ASAP. At least get the ball rolling... you never know when your income may increase or have a capital gain somewhere. It's just illogical to repay 80k of cc debt with high interest. Don't second guess yourself... get the bankruptcy done.

But just like USCPhilly said... get a free consultation with an attorney. I wouldn't pay higher than 1k to any attorney for this procedure. Don't let them bullsh#$ you. It's simple work for an attorney... maybe 1 hour paperwork + travel expense and time to court hearing. Nothing more.

[jjgold]

Bankruptcies a tremendous asset if you're a gambler

[opie1988]

I believe it's current debt amount (monthly payments) based on current monthly income. They also factor in overall cc debt and interest percentage. I don't know the exact mathematical formula...

But if you're bringing home 40k a year on paper... and your debt is 80k... I believe you can wash the entire debt away... as long as you don't owe any back taxes to the IRS and weren't late on any house payments.

If I was in that boat... I'd get it done ASAP. At least get the ball rolling... you never know when your income may increase or have a capital gain somewhere. It's just illogical to repay 80k of cc debt with high interest. Don't second guess yourself... get the bankruptcy done.

But just like USCPhilly said... get a free consultation with an attorney. I wouldn't pay higher than 1k to any attorney for this procedure. Don't let them bullsh#$ you. It's simple work for an attorney... maybe 1 hour paperwork + travel expense and time to court hearing. Nothing more.

I'm actually from the school where I find it illogical to rack up 80k of cc debt.

You do realize that people end up getting fukked over by bankruptcies, right? Those businesses never get paid. There's nothing right about it.

[grease lightnin]

Bankruptcy filer = Stiff

No difference.

[TheMoneyShot]

I'm actually from the school where I find it illogical to rack up 80k of cc debt.

You do realize that people end up getting fukked over by bankruptcies, right? Those businesses never get paid. There's nothing right about it.

Morally (from the school you're from) it's wrong. Yes, you're correct.

But the law was created for a reason. How you use that law.... that's your prerogative.

In all theory... if you had a debt of 40k on your cc for whatever reason... You'd only assume your cc score would be around 500 or so... and quite possibly.. creditors would start lowering your credit limits if this was the case. With 25%-30% of interest... how would you ever comeback to reality? There is no other solution.

I'm not a tax expert when it comes to how it effects AExpress or Discover... or any bnk when an individual doesn't pay their balance or it gets charged off? I would only assume the bnk gets a tax break somehow showing proof this income was never received etc. I'm sure it doesn't break the bnk so to speak because there are a lot of Americans who live with a balance on their CC's every month and they pay on time... so the bnk is making a huge profit on those individuals.

In the business world.... to the personal world... I know a few individuals that had high personal lines of credit based on their business performance etc. Why would someone charge $100,000 on their CC's? I have no clue. But it happens in America. People get addicted to spending.

So unfortunately a bankruptcy is all they can do.

[chico2663]

Well thanks to bush, people rarely can file for bankruptcy. The way it works for a single person is youCAN'T make more tha10000 in a semi-annual period.when you dont qualify than they are going. To give you relief. On about 70cents to the dollar.they will set up a payment plan between 2 to 6 years. When i gkt sick i went from making over 130.000 to getting 3100O on SSDI.I was paying500. Month on my end of insurance. So company was getting over grand but they try to fight paying anything.just wishi wasnt self employed all those yrs because i probably would of maxed the social security out

[mpaschal34]

I have a solution.

Bankruptcy = Death Penalty (yes I'm from Texas). Tired of people abusing the system. Put your life on the line and I guarantee you people will start controlling their spending.

[chico2663]

Never filed bankruptcy but anyone that thinks bush was good for common people is a fuckin moron. HEis a carpetbagger from the east

[jjgold]

Who cares about the death penalty it's about baikong out of debt and having money to gamble in the future

[TheMoneyShot]

I'm actually from the school where I find it illogical to rack up 80k of cc debt.

You do realize that people end up getting fukked over by bankruptcies, right? Those businesses never get paid. There's nothing right about it.

Let me give you another hypothetical story.

Let's say you're an 18 year old kid who has big dreams. You want to open your own business one day... but you don't have the working capital to work with and the banks have said no to your business loans.

But, personally... at age 18 and age 19... to age 20 you paid all your CC's on time... You were intelligent enough to max out your cc's and pay them off each month...proving you can handle responsibility. With this in mind... over a few months... with all of your CC's combined you achieved a credit line around $50,000

Get yourself established.... meaning... make sure you have a roof over your head. Rent or live with friends... make sure you have an affordable lease on a car or a used car.

Now, what about those business dreams you had? Take that working capital you have of $50,000 and get your business. High interest? Who cares? Live your life. Live your dream. Who knows? You might be able to pay all that debt back and the high interest.

But what if you don't? What if you fail?

What can the creditors do to you? Nothing. They can't throw you in jail. You file a personal bankruptcy. Again, how you use the law... is entirely up to you.

[klemopixx]

I did it about 2 years after my divorce,(8 years ago) I got stuck with a ton of debt from the settlement. Basically you have to live bare bones for about two years, the payments you'll agree to are about 10 cents on every dollar you owe. No credit during those two years and for a year or so after your rating will be squat. After that CC offers will start rolling in a tidal wave. Once you get three years past your discharge date it basically back to normal. I bought a brand new car 3.5 years back and my credit score was 762 back in the summer. I'd say I'm doing Ok.