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Thread: Filing for Bankruptcy?

  1. #1
    Veteran Member Lovespell's Avatar
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    Default Filing for Bankruptcy?

    I am seriously considering filing for bankruptcy, but I'm wondering if this is different or harder then an average person because of my job. I've been dancing for one year.

    I want to file for bankruptcy because I have:

    1. Thousands of dollars in medical debt
    2. Bounced checks that haven't been paid
    3. A few small "shopping" (Macy's, Marshall Fields's) credit card bills

    For the life of me, I can not catch up on these expenses. When I was sick from my eating disorder, I could not keep up.

    Also, I can't even seek good medical treatment for my eating disorder until my bills are current.

    I was told I would be a good candidate for filing because I have nothing in my name (no car, no house) and I have no bank account.

    So please, what should I expect? I'm young, so if I file now, get a clean start, it will be off my record in 5 years, right? How diffuclt does it make renting an apartment, opening a bank account, getting medical insurance, ect?

    Please, please advise me on this.

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    Senior Member NaughtyAngel's Avatar
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    Default Re: Filing for Bankruptcy?

    I noticed on your profile that you were born in 1987? You are about 18 years old? If so you are really very young. If I were you I would not file for personal bankruptcy but you may want to seek professional help though be wary of attorneys who advertise that they will make it easy for you. Yes... they will but ultimately it stays on YOUR credit report... so I would definitely think twice about filing for bankruptcy.


    As for 1. Thousands of dollars in medical debt:

    Try to write a letter sent via certified mail to them and ask them if you can renegotiate the sum. Some times when you mention financial hardship they DO lower the amount. That is why you really should ask.


    As for 2. Bounced checks that haven't been paid:

    There is really nothing you can do except pay them off... one at a time. Filing for bankruptcy will only delay you learning how to be financially responsible and sometimes some people mistakenly think that upon filing for personal bankruptcy their problems will cease. They won't. Instead chances are you will probably repeat this behavior of being in debt like this so if I were you... I would try to solve them NOW before it gets worse when you were older.


    As for 3. A few small "shopping" (Macy's, Marshall Fields's) credit card bills:


    You can always work more hours... or get another job. Sell things on Ebay. Babysit. Anything to pay off your debts before you file for personal bankruptcy.


    Whatever you do it will be a huge black mark on your record.

    Personally I have been in alot of debt in the past but my writing the amounts down and working towards paying off each one slowly but surely despite the pain and despair... eventually I got on the right path even if filing for bankruptcy was/is an option. It can be like a death to your credit report as well as to your self-esteem. Whatever you decide... good luck. It's a tough tough road... no matter what.

  3. #3
    BrunetteGoddess
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    Default Re: Filing for Bankruptcy?

    I was also considering this. Can someone please how bankruptcy actually works??

  4. #4
    Banned Melonie's Avatar
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    Default Re: Filing for Bankruptcy?

    As of last October new laws regarding bankruptcy were put into effect. One of those changes is that individuals seeking bankruptcy protection are judged to have the earnings potential which is at or above the state median, or the ability to pay $2000 per year (= about $40 per week) towards their debts, that they may no longer be allowed to seek total discharge of past debts under chapter 7 . Under the letter of the law, the amount of income used by the court to make the chapter 7 determination can also include parental contributions or undeclared income over the last 6 months ( see ), which can work against very young filers and against dancers.

    Creditors can also object to Chapter 7 discharges of bad debts owed to them under the 'new' bankruptcy law if the person filing for bankruptcy ostensibly has the ability to continue making payments (even small payments). Chapter 7 bankruptcies were of course known and loved in the past because they simply made all bad debts cease to exist (actually most not all) and allowed the bankrupt person to move forward with a 'clean slate' without having to pay anything back towards any of the bankrupt debts. The major effect of the changes in bankruptcy law which took effect last October are that it is now much more difficult to make past debts simply disappear altogether via a Chapter 7 bankrupcy filing.

    Instead, under the new bankruptcy law, many bankrupt persons will be forced to file under Chapter 13. Under chapter 13, a court divides up the person's assets among creditors (with certain restrictions), and the court also mandates an ongoing monthly payment schedule which requires that the bankrupt person continue to make small monthly payments to those creditors on the 'unsatisfied' balance of their debt for the next 5 years. Thus if you are forced to file under Chapter 13, the outcome will essentially be no different than if you make private arrangements for small/late payments with your creditors - meaning that you'll be required to continue to make $10-20-30 a month payments to each creditor in any case. Thus the only significant difference between a Chapter 13 filing and private arrangements without filing is the fact that a bankruptcy filing will or won't appear on your record / credit rating. The actual major advantage of a chapter 13 bankruptcy filing i.e. a court ordering creditors to leave your house or car free from repossession/liquidation, is of no help at all if you don't own a house or car !

    Even if the odds are good that you would be entitled to a Chapter 7 filing (which is doubtful given your dancing), there are still costs and consequences involved. Given the new fees and legal requirements, it probably costs about $1000 total to file a bankruptcy petition via an attorney with the attorney's office preparing all necessary documentation (maybe $300 rock bottom if you prepare and file every stick of bankruptcy paperwork yourself) - thus you must balance the costs of filing versus the costs of paying off some/all of your creditors. Beyond the immediate expense, you must also take into consideration the future indirect costs of filing i.e. higher interest rates on every loan you attempt to get over the next 6-8 years, the possibility that future job applications may be put at the bottom of the potential employer's pile etc. which will effectively take money out of your pocket because a bankruptcy filing appears on your record.

    Considering that you are 18 years old, and considering that your debts are primarily medical in nature, considering that most states already have laws in place which prevent/temper potentially hostile collection attempts for medical debts, and especially considering that you have no assets i.e. house or car that 'need' bankruptcy protection from forced liquidation, I would seriously consider trying to work this out privately rather than filing for bankruptcy. Another reason I would try to avoid filing for bankruptcy is that the bankruptcy court will surely hook up with the IRS in regard to establishing your income over the last 6 months. If you haven't declared your dancing income and haven't paid taxes during this period, it's entirely possible that a back tax bill will be added to your list of debts ... and back taxes are for the most part NOT dischargeable under chapter 7 or under chapter 13.

    Remember that bankruptcy is a real live court proceeding, and that at some point you will be put under oath and asked about your work/income during the last 6 months at least ... and it will take 'iron balls' to lie to a judge about being a dancer in that situation. If you tell the truth about having worked as a dancer over the last 6 months, and assuming that the judge will interpret this to mean that you can theoretically afford to make at least $40 per week in payments to creditors, and assuming that your creditors will 'object' to outright disposition of your debts under chapter 7 given the fact that you are a dancer (remember the Hollywood stereotype of dancers earning thousands of dollars per week), you're virtually assured to be denied chapter 7, and instead will very likely be forced into Chapter 13 ... meaning you'll still be saddled with making small monthly payments to all of your creditors for the next 5 years, very possibly with a back tax bill added to your list of debts and monthly payments to the IRS which doesn't exist right now, as well as having spent up to $1000 to file for bankruptcy in the first place.


    ~
    Last edited by Melonie; 12-17-2005 at 08:00 PM.

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    Banned Melonie's Avatar
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    Default Re: Filing for Bankruptcy?

    following up here, IMHO under the new bankruptcy laws any dancer who is reasonably successful income wise and who does NOT have a house and a car or long term retirement investments to worry about (i.e. the threat that her house and/or car and/or retirement investments will be put up for forced liquidation with the proceeds being shared among creditors) in reality has very little to gain from filing a chapter 13 bankruptcy. As I stated earlier, making private arrangements with each of your creditors to make ongoing small payments towards your debts over the course of the next several years will essentially yield the same end result as a bankruptcy judge laying out a schedule of ongoing small monthly payments under chapter 13. Ultimately, creditors understand that they can't get 'blood out of a stone' and they also understand that going to bankruptcy court costs them money, such that most creditors are very likely to accept a privately proposed reduced payment plan or partially forgiven debt with immediate partial repayment if the creditors know that the debtor doesn't have any major assets which can be force liquidated to quickly pay off the amounts the debtor owes.

    There are now IMHO really only two circumstances where declaring bankruptcy makes financial sense ...

    #1 - if you do own a house and/or car and/or long term retirement fund investments which you don't want to see put up for forced sale, and if you're seriously behind in mortgage and/or car payments, then a chapter 13 bankruptcy filing can result in a judge's order to your mortgage and car loan companies to lighten up, stop the foreclosure/repossession proceedings, and accept small monthly payments that you can afford instead of the big monthly payments with penalties you can't afford but actually owe them under the terms of your mortgage/car loan.

    #2 - if you don't have a lot of assets (house, car, retirement fund), and if you do owe a large amount of money in consumer/unsecured debt (credit cards, store cards. personal loans), and if you are willing to essentially stop working full time for 6 months and put up with creditor harrassment in the meantime in order to establish that your previous 6 months' average income level is below the state median, then you can file for a Chapter 7 bankruptcy which will in fact erase all of your debts without ongoing small payments following you around for the next 5 years.

    But with last October's changes in bankruptcy law, it is simply no longer possible to buy a house and a car with little or no money down, to obtain and max out several credit cards, and to then file Chapter 7 bankruptcy and walk away from $100,000+ in bad debts while still retaining possession of the house and car.

    The legal/financial experts are certainly welcome to chime in here ....
    !~
    ~
    Last edited by Melonie; 12-18-2005 at 06:27 AM.

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    God/dess Deogol's Avatar
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    Default Re: Filing for Bankruptcy?

    Bankruptcy is useless these days. If you miss a payment out of bankruptcy they just add a fee and build up the interest. If you screw up under bankruptcy, you are screwing up on an order of the court.

    Get an answering machine for the phone calls.

    You are gonna have to start living in your means. You are gonna have to figure out what your means are even! A lot of people don't even know that so you're not alone there.

    I can't tell you how bad a BR is going to screw with your life for the next TEN years. You will have trouble getting an apartment. You will have trouble buying a car. You will have trouble paying for schooling. Basically anything important that involves money will be a pain in the ass.

    If they do let you go BR, you will be paying DOUBLE what everyone else is paying. If you thought "The poor pay more for everything" then you are in for a big thrill when it comes to the BR.

    My advice. Stop buying stuff other than food. Wait for three days to determine if you REALLY want something. Pay off the smallest debt and then roll those payments into the next smallest debt.

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    God/dess VenusGoddess's Avatar
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    Default Re: Filing for Bankruptcy?

    I agree with Mel and Deogol. If you wanted to file Chapter 7, you should have done it a couple of months ago. It's too late now. There's nothing you can do. Either pay your debts off on your own, or with a court order, but those are the only options you have at this point.

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    Senior Member Jessica Lords's Avatar
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    Default Re: Filing for Bankruptcy?

    I filed Banruptcy at 23 yrs.old....like you small credit cards,couldn't pay bills..ect..I was also dancing,but it may be alot different of a process here in Canada.
    My credit wasn't affected much,I got a credit card 3 years later AND a mortgage.
    I would talk to someone like a Credit Councellor. They may be able to direct you in the right direction...

    But like I said,I am in Canada,might be a lil different.


    Good luck!

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    God/dess VenusGoddess's Avatar
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    Default Re: Filing for Bankruptcy?

    ^ With all of the changes that they made to the bankruptcy laws, it's NOT easy to "wipe the slate clean" now.

    What I don't understand..with the Chpt 7 "credit counseling", if you cannot make your payments, and default on the CC for BK...wouldn't that get you into more legal trouble? Or does that speed up the "finalization" for BK?

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    Default Re: Filing for Bankruptcy?

    I thought the new laws were only for people that made more than "x" about per year. I think it's like under $50,000.00. I just filed 2 years ago and have no problem getting loans and credit cards. The rates are higher until you show your paying and keeping up on things. At 18 I really don't think it will hurt you because you will be still very young when it comes off your record. Just my $.o2. Pm me if you want, I have been thru it and will do what I can to help.
    "The ultimate measure of a man is not where he stands in moments of comfort, but where he stands at times of challenge and controversy."

  11. #11
    AudreyLeigh
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    Default Re: Filing for Bankruptcy?

    I just filed.. made the Ch7 deadline... at 23 with the debt and bad credit score I had i think it was the best thing for me...

    New laws/requirements make it almost impossible to start over...

    When I met with my attorney 2 weeks before the law change he didnt say anything about an income variable with chapter 7...

    The only thing you really can do is call a couple bk attys and see what they say...

  12. #12
    Banned Melonie's Avatar
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    Default Re: Filing for Bankruptcy?

    According to a 'layman's' read of the new bankruptcy law, there are basically three criteria which affect an individual's ability to file for Chapter 7. First, the last 6 months of income (and not just taxable income or reported income but ALL income) must fall below the official median income level for your state. Second, the amount of money that the court assumes you can afford to contribute towards ongoing monthly payments to existing creditors must be less than $2000 per year. Third, your creditors must not successfully object to a Chapter 7 filing.

    The point of particular interest to dancers attempting to file future US bankruptcies is that it is in a creditor's interest to object to a Chapter 7 filing ... because allowing a Chapter 7 filing means the creditor will get nothing instead of something. The law also makes specific reference that ALL sources of income are to be considered by the judge. Thus where dancers are concerned, creditors can easily make the case that as a dancer the girl wishing to file for Chapter 7 bankruptcy in fact has a significant amount of 'under the table' earnings which should disqualify her from a Chapter 7 filing based on future ability to make payments to her creditors in excess of $2000 per year. By filing for bankruptcy under the new law, the filer basically waives any rights to financial confidentiality thus both the court and other parties in the bankruptcy proceeding (i.e. all the creditors) have free rein to investigate the filer's financial history, assets, income sources etc.

    The new law clearly leaves self-employed individuals at a disadvantage, since it is nearly impossible for them to document that their actual income is below the state median income level and/or too low to afford making $2000 a year in payments on their debts with any cast-in-stone credibility. The new law also creates a clear incentive for creditors to do a little research into the real work/earnings history of persons attempting to file Chapter 7 bankruptcy against them, and to enter the results of that research as evidence in bankruptcy court. Thus if, for example, a girl who has been working as a dancer 'under the table', with no official record of her earnings and with no significant dancing income declared on previous tax returns, is very vulnerable to further investigation if a creditor discovers and raises the issue of her dancing earnings in bankruptcy court. Not only will this very probably disqualify her from a Chapter 7 filing, but it will also very probably be officially referred to IRS/state/local income tax agencies for further investigation.

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    God/dess VenusGoddess's Avatar
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    Default Re: Filing for Bankruptcy?

    Mel, what would happen if the filer defaulted on the payments? Not because of neglect, but because they really cannot afford to make the payments? What are the legal ramifications?

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    Banned Melonie's Avatar
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    Default Re: Filing for Bankruptcy?

    Quote Originally Posted by VenusGoddess
    Mel, what would happen if the filer defaulted on the payments? Not because of neglect, but because they really cannot afford to make the payments? What are the legal ramifications?
    I don't believe that any legal precedent yet exists due to the fact that the court is still ejudicating cases filed before the new law went into effect. However, as Deogol pointed out, a Chapter 13 payment schedule is laid down under a court order. As such, violating that payment schedule constitutes violation of a court order, and repeated violations probably could be construed as contempt of court.

    Also, under the old Chapter 7 proceedings the court issued one bankruptcy order and never looked back. Under a Chapter 13 proceeding the bankruptcy isn't legally 'over' until the bankrupt person has satisfied the terms of the Chapter 13 order. I'm speculating that under the best of conditions this means 5 years of the Chapter 13 bankruptcy case being active, with another 3 years for the record of the bankruptcy to trickle it's way off credit reports after all the payments are made and the case is closed.

    But if the Chapter 13 filer fails to make all of the court ordered payments the case isn't ever closed, which likely means that the filer's credit report would never get clear of the bankruptcy. I suppose this could mean that persons who are unable to live within a budget and/or unable to hold a steady job might wind up going through life with a bankruptcy on their record perpetually, thus perpetually unable to obtain credit, perpetually at the bottom of the applications pile for obtaining new jobs, perpetually unable to buy/lease/rent decent housing or a decent car ... in other words trapped in a perpetual 'underclass' probably doomed to the public housing and social welfare benefits 'economy' for the rest of their lives.

    IMHO the terms of the new bankruptcy law are going to be a huge 'rude awakening' for many people who have grown up under the concept that they can simply borrow and spend until their credit is cut off, and then 'walk away' from bad debts
    Last edited by Melonie; 12-20-2005 at 05:16 AM.

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    God/dess kitana's Avatar
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    Default Re: Filing for Bankruptcy?

    Quote Originally Posted by Lovespell
    I am seriously considering filing for bankruptcy, but I'm wondering if this is different or harder then an average person because of my job. I've been dancing for one year.

    I want to file for bankruptcy because I have:

    1. Thousands of dollars in medical debt
    2. Bounced checks that haven't been paid
    3. A few small "shopping" (Macy's, Marshall Fields's) credit card bills

    For the life of me, I can not catch up on these expenses. When I was sick from my eating disorder, I could not keep up.

    Also, I can't even seek good medical treatment for my eating disorder until my bills are current.

    I was told I would be a good candidate for filing because I have nothing in my name (no car, no house) and I have no bank account.

    So please, what should I expect? I'm young, so if I file now, get a clean start, it will be off my record in 5 years, right? How diffuclt does it make renting an apartment, opening a bank account, getting medical insurance, ect?

    Please, please advise me on this.
    While I trust Mel for almost ALL money matters, lol; I would just go talk to an atty first before doing anything.

    I too know what you are going through with large medical bills.

    Hell when I had pneumonia in Jan of this year the bill alone was over $66,000! You wanna talk about a pain! I still haven't gotten close to paying it off, and they are being really nazi-like in reducing the debt.

    If you are serious about bankruptcy, I would first pay down/off the CC bills, then see what a lawyer says. You very well might be able to still file Ch 7 for the medical bills.

    People can control their spending and "living outside their means", they however can not control being very sick or having a terminal or cronic illness. Judges know that, and most of them would probably grant you 7 on that alone. (Don't mark my words here as law, that's just my opinion from what I have seen.)

    As for the back taxes and the IRS, I wouldn't sweat that either. When I helped a girl last year file for the 1st time after dancing. they told her since it was the first year she had done it, they always waive the penealties and suce with filing quartly due to not knowing and unstable income for the first year. After the first year however, they do want you to file quarterly, and will asses penelties for that.

    Again talk to an atty, see what they say. Hell talk to as many as you can to get different ideas of he situation.

    With all that said good luck, and I hope you get better completly (I read your body and ladies posts as well )
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  16. #16
    Banned Melonie's Avatar
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    Default Re: Filing for Bankruptcy?

    I like Kitana's approach ... pay off your other debts and send only a token amount to be applied to your medical bills. As I posted earlier, most states have separate laws which limit the collections activities allowed on medical related bills - in NY as long as you make a regular monthly payment of some token amount (even $50 on a $50,000 bill) medical creditors are NOT allowed to move on your house/car/retirement/investment assets. Check your own state laws online - send the medical creditor a registered letter declaring that $66 per month in regular payments is all you can afford and all they are going to get - and they should lighten up on collection threats. On the other hand, the overdue medical bill will remain on your credit report forever ... but so would a Chapter 13 bankruptcy with unsatisfied court ordered payments.

    With a $66,000 amount involved, this is certainly worth consulting an attorney over. However, be aware that the new bankruptcy law is very specific in regard to the criteria the judge must use in deciding Chapter 7 versus Chapter 13, as well as the fact that the new bankruptcy law provides creditors with a right to object to a Chapter 7 filing if the filer has sufficient income to make even $2000 per year in future payments on delinquent debts. Thus as a dancer with a 'Hollywood Stereotype' income potential of many thousands of dollars per week, the odds of a creditor not objecting to a Chapter 7 filing on a $66,000 debt are unfortunately extremely small.

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    Featured Member Vamp's Avatar
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    Default Re: Filing for Bankruptcy?

    Lovespell I would suggest credit counseling. They will consolidate all your bills. It is one monthly fee and stop all the collections calls. They also work with your credit cards to bring down the interest. It will not bring down your credit score.

    Even if you owe alot in medical bills they negotiate all of it for you. They deal with the collections agencies. If your not disciplined enough to do it all yourself this is a great way to start learning.

    I am in credit counseling. It has been a life saver for me. They also help you understand your credit report and budgeting.

    I get free credit counseling services thru my credit union.

    There are alot of scams that are called credit counseling too. Just do your homework.

    Also with new bankruptcy laws they make you go thru credit counseling as well.

  18. #18
    AudreyLeigh
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    Default Re: Filing for Bankruptcy?

    NO! If you make any payments is shows you are somewhat ABLE to pay the debts and makes filing harder! DONT PAY ANYTHING and

    TALK TO AN ATTORNEY

    Please. This is StripperWeb NOT BankruptcyWeb... all we know is what we think we know (including me)... none of us are attorneys... please see one...

  19. #19
    Featured Member Vamp's Avatar
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    Default Re: Filing for Bankruptcy?

    I work in a financial institution. The new bankruptcy laws are clear. If you have the ablity to repay your debt you will. It is not based on if you payed anything towards them. It is based on your annual income and monthly expenses. If you filed before the end of october you were not subject to these laws.

    Also keep in mind attorney's are there to make money. They will encourage you to file no matter what it does to your credit. A boy 18yrs old had a car loan and he didnt have a job and behind on his loan. An attorney told him to file bankrupty on it. Now he has ten years of bad credit when there was easier ways out. This happened before the new laws. These kinds of situations are part of the reason for the new law.

    It is best to do some reserch on credit counseling, budgeting, credit reports,bankruptcy laws, even call your creditors to see if anything can be worked out, and think of ways to fix the problem yourself before you see an attorney. It is worth the work. From my experiance an attorney should be last resort when everything else has been tried. Go in knowing facts before you talk to one.

    Bad credit is like a stone around your kneck. You will always end paying more because of it. It will make it harder to get anything. It is worth the effort in trying to keep away from bankruptcy.

  20. #20
    God/dess VenusGoddess's Avatar
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    Default Re: Filing for Bankruptcy?

    Credit counseling DOES affect your credit. It's negative impact is equal to filing Chapter 13 bankruptcy.

    Why pay some company to call your creditors when you can do it yourself? Sit down and figure out exactly how much you can pay to each creditor and then contact the creditor, explain the situation and see what they say. MOST creditors will work with their own customers more than anyone else.

    I'll tell you, I did Credit Counseling (10 years ago?) and it fucked my credit royally, even though I was paying it all on time.

    Your credit is screwed either way, for the time being. But, having everything paid is better than having a bankruptcy. And, that will be forgiven faster than a bankruptcy.

    However, for your own peace of mind, go to a lawyer consult, a credit counseling consult and make the best choice for you. At this point in time, however, you will not be able to "wipe the slate" with Chapter 7 as you would have been able to had you filed before Oct. 14th.

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    Featured Member Vamp's Avatar
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    Default Re: Filing for Bankruptcy?

    I am not sure what happen in your situation. I have been in credit counseling a year. It has not effected my credit score at all. By law it can not effect your score. I had perfect credit going into counseling. It was my way of saving what I worked so hard to keep.

    If you are paying on collections that are already on your report they will remain until payed off.

    As I said in an earlier post there are also alot of scams called credit counseling.

    Why should you have them negotiate for you? If collections are on your report it will not stop the collection calls even if you pay on them. If you have hight interest credit cards because of a default rate they will not work with you. Credit counseling can bring down the interest on them. They work with all your correctors. If you have alot this can save time and money.

    I have pulled my credit report since i have been in credit counseling. No where is it listed that i am in credit counseling.

    Just my experiance and thoughts.

  22. #22
    Veteran Member Lovespell's Avatar
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    Default Re: Filing for Bankruptcy?

    Thanks for all the advice.

    Does anyone reccomend any legit credit counseling?

  23. #23
    Featured Member Vamp's Avatar
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    Default Re: Filing for Bankruptcy?

    Some credit unions offer free credit counseling for their members. Also check with the better buisness bureau before going to a credit counseler.

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