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Thread: At What Point is Bankrupcy a Good Idea?

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    God/dess VegasPrincess's Avatar
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    Default At What Point is Bankrupcy a Good Idea?

    Hey guys-

    So, basically, my credit is fucked. I have outstanding credit card debt, which I haven't paid on in years (it's on so many different credit cards, I don't even know who to send money to at this point.) I also did did a "voulentary repossesion" on a car that I got. About three years ago, I bought a car, it ran like shit, they wouldn't work with me at all (the dealership) and I left the car at the dealership and gave the keys to the salesperson. Not a very smart thing to do, but I did it nonetheless, and apparently now I still owe about 18 K on a car that I had for one year and allready paid 10 K on! So basically, I feel that to clean up my credit, I have to give 18 k to this dealership for some shit that I am not even using and will get no money back on!

    I feel like bankrupcy is my only option at this point, but I really don't want to do it. Does anybody have any advice or have been in a similar situation??

    Thanks a ton!
    Sexy Jasmine after getting fucked over at work:

    God loves strippers and when guys do things like that its an automatic ticket to HELL!


    Quote Originally Posted by anomar View Post
    Perhaps you stopped spending money on her. Strippers need money to operate. They are like coin operated juke-boxes of love.

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    God/dess cinammonkisses's Avatar
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    Default Re: At What Point is Bankrupcy a Good Idea?

    No, there is no point in filing bankruptcy only on 18K debt. IMO This is an easy hole to dig yourself out of.

    Have you pulled your credit report yet? I pull through www.truecredit.com for my credit report. and when I need my ACCURATE credit score, I pull through www.myfico.com

    Have you worked out some sort of payment plan through the dealership?







    Some Douchebag: "[Pimp C] 12:43 am: its true we got to stick together the black people on SW CK you is teh condoleeza of SW"


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    Default Re: At What Point is Bankrupcy a Good Idea?

    thanks CK. I will check out those sites. Actually, I was offered a payment plan and didn't take it. I just am so vehemently angry about paying 18 K for nothing! The dealership sold me a lemon and instead of me going about it and getting a lawyer like I should have, I just left the car with them. So, I had the car for only one year, and put down 10 K on it over the course of that year. Then I gave it back. I just can't justify spending 18 K for.... NOTHING! something I don't even have anymore! And it's not like it was repo-ed either, I drove it there and gave it back, the payments weren't late on it or anything! GRRR
    Sexy Jasmine after getting fucked over at work:

    God loves strippers and when guys do things like that its an automatic ticket to HELL!


    Quote Originally Posted by anomar View Post
    Perhaps you stopped spending money on her. Strippers need money to operate. They are like coin operated juke-boxes of love.

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    Banned Melonie's Avatar
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    Default Re: At What Point is Bankrupcy a Good Idea?

    I would definitely consider a lawsuit against the dealership before thinking about declaring bankruptcy ! If you do file for bankruptcy, the high risk interest rates that will follow you for years will cost you more than 18k !!!

    Seriously, the filing of a lawsuit against the dealership will probably get your supposed 18k debt reduced to perhaps 1/2 of that amount when the dealership offers to settle rather than go to court, in exchange for a couple of grand in legal fees on your part. At that point the debt will be gone, and if the terms of the settlement are handled correctly the negative credit reporting will be gone as well. I just hope that the statute of limitations hasn't run out on you, in which case you are fu$!ed in terms of the 18k debt unless and until the dealership sells your debt to another company.

    I hear you about 'money for nothing', but in the grand scheme of things a settlement would indeed be money for 'something'.

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    God/dess cinammonkisses's Avatar
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    Default Re: At What Point is Bankrupcy a Good Idea?

    I agree with Mel, I'd sue the dealership. Can you find out if your state has Lemon Laws? I know Ohio has one.







    Some Douchebag: "[Pimp C] 12:43 am: its true we got to stick together the black people on SW CK you is teh condoleeza of SW"


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    Veteran Member StuartL's Avatar
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    Default Re: At What Point is Bankrupcy a Good Idea?

    I'm no expert here - as you all know - but the US bankruptcy laws changed last year so that the debt will follow you about no matter what. However, I don't know if that applies to all debts, no matter how old, or just newer ones.

    Either way, the point of the law change, at least as it was reported, was to ensure that there was no easy way out for indebted individuals.

    Are there any smaller debts that you can start with? Maybe the old credit cards? You could get repaying one of those and at least it will show on your FICO score that you are trying to do something. It would be a start...

    I have been doing a little research into this subject for one of my sites. A link to get a free credit score and some info about deciphering it all are below:

    http://www.combat-identity-theft.com...it-report.html

    http://www.combat-identity-theft.com...t-scoring.html

    Good luck.

    Stuart

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    Banned Melonie's Avatar
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    Default Re: At What Point is Bankrupcy a Good Idea?

    ^^^ just to clarify the US bankruptcy issue, there are two ways for individuals to file. The first is Chapter 7, which was previously available to just about anyone, and which allows for total discharge of old debts. However, the new 2006 law changes set conditions as to who can and cannot file Chapter 7 ... with anybody who earns more than 'poverty level' income essentially being disqualified. The law actually uses 'median income levels' on a state by state basis as the threshold, which is tweaked by number of dependents etc.

    If a person doesn't qualify for Chapter 7, or if the bankruptcy judge has reason to believe that the person attempting to declare bankruptcy actually has income or assets above the 'poverty level' even that income or those assets may not have been officially declared (i.e. the dancer stereotype, with girls supposedly earning 'tons of money' in cash that is not officially declared), then the person will be forced to file Chapter 13 bankruptcy instead.

    Under chapter 13, the court takes a detailed look at the person's finances and earnings potential, the court creates a mandatory payment schedule such that creditors will be paid off over a typically 5 year period, and the person filing bankruptcy is then ordered by the court to adhere to the payment schedule. The court usually only leaves the person with enough earnings to equal the 'poverty level' to spend on regular bills and living expenses, and applies every extra dollar earned over the 'poverty level' towards paying off creditors.

    A big caveat about dancers filing bankruptcy. One of the first steps of the bankruptcy proceeding is an 'audit' of the dancer's earnings / finances which can span back several years. If a dancer hasn't been entirely forthright about declaring her past income and paying taxes on that income, the odds are pretty high that the bankruptcy investigation will turn up that fact. As such, the dancer could find herself saddled with an additional $10k-$20k-$50k+ 'estimated' back tax bill on top of her court ordered creditor's repayment plan. It's also extremely likely that the bankruptcy court and IRS will heavily scrutinize future income amounts and tax returns for at least the 5 year duration of the court ordered repayment plan.

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    Default Re: At What Point is Bankrupcy a Good Idea?

    Wow, thank you so much for your posts! Melonie, that was sooooo helpful!! I had NO IDEA that filing bankrupcy would mean them auditing all my last years incomes, and the like.....I would be fucked if they looked into all that shit. Thank you SO MUCH for your help, I am not filing bankrupcy!

    Now, to find a lemon law attorney.....
    Sexy Jasmine after getting fucked over at work:

    God loves strippers and when guys do things like that its an automatic ticket to HELL!


    Quote Originally Posted by anomar View Post
    Perhaps you stopped spending money on her. Strippers need money to operate. They are like coin operated juke-boxes of love.

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    Banned Melonie's Avatar
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    Default Re: At What Point is Bankrupcy a Good Idea?

    Well, the essence of a Chapter 13 bankruptcy filing boils down to a very few questions from the court's standpoint -

    How much does the bankruptcy filer actually earn before tax and after tax ?

    What is the 'poverty level' of income in the filer's city/state ?

    How should the court split up the filers future 'excess' earnings, i.e. the difference between the bankruptcy filer's actual earnings and the city/state 'poverty level' of earnings, among the filer's creditors in terms of a court ordered monthly payment plan ?

    In order for the court to find out the answer(s) to question #1 the first thing that the judge is going to do is ask to see the bankruptcy filer's previous year's tax returns, bank statements, credit card statements, car/mortgage loan statements etc. If the judge finds a major discrepancy i.e. if the judge adds up the bank deposits plus credit card payments plus car/mortgage payments and finds that they vastly exceed the filer's reported income on their past years' tax returns, as an officer of the court it is the judge's duty to call in the IRS and state tax dep't (if the filer's state has an income tax).

    The flip side of the same situation is a bankruptcy filer attempting to file chapter 7 based on the 'fact' that their (reported) income is below the city/state 'poverty level'. When the judge requests the tax returns, bank statements, credit card statements, car/mortgage loan statements etc. and discovers that the filer has been spending much more money than they reported to the IRS as having earned in the first place, not only will the judge also be forced to call in the IRS ... but the bankruptcy filer could also potentially be subject to a fraud charge because the filer effectively 'lied' to the court a la filing for bankruptcy under a section of law intended for persons whose incomes are below the 'poverty level', when in fact the filer's income was well above the state/city 'median income' level.

    In the final analysis, the most basic point about a bankruptcy filing is that the filer is 'asking' that a court / judge look at their personal financial situation of income vs 'outgo', and afford the filer some relief from agressive creditors - based on the 'fact' that they aren't earning enough income to satisfy their payment obligations to those creditors as well as eat and keep a roof over the filer's head at the same time. Chapter 7 will wipe out those payment obligations entirely, but the filer must truly be earning 'poverty level' money in order to qualify for a Chapter 7 bankruptcy filing. Anyone earning more than the 'poverty level' will almost certainly be forced to file under Chapter 13 ... which basically amounts to a court ordered refi of the filer's outstanding debts such that the filer is allowed to make smaller payments over a longer period of time (and the filer's creditors are forced to accept the smaller payments over a longer period of time vs foreclosure / repossession / auction of assets).

    Therefore, in my own opinion at least, if a person earns more than 'poverty level' income, the ONLY purpose actually served by filing a Chapter 13 bankruptcy today is to protect a home / car / other expensive assets from a forced sale at the hands of agressive creditors.

    ~
    Last edited by Melonie; 05-26-2007 at 08:55 AM.

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