Newest update in my ongoing situation. I finally consulted with a bankruptcy attorney to gather information and dispel myths and misinformation. Some of my findings are as follows for those who care ( under Oregon law and probably to a point Federal Law since the bankruptcy court is federal). This is not gospel but what was told to me by a licensed bankruptcy attorney;
1. Myth 1? Chapter 7 bankruptcy is very difficult now. I don't know how hard it was before but it basically comes down to income, debt, expenses and number of people in your home. I have $ 50,000.00 unsecured debt and $ 172,000.00 secured. Chapter 7 is pretty much a slam dunk in my case with 2 full time and 3 half time occupants in my home.
2. You must take an approved credit counseling class prior to filing which can be done via phone, online or in person. Very convenient.
3. It takes about 90 days from the filing date but all collection actions cease immediately upon filing.
4. Debt settlement companies are in general a fraud. Your attorney can negotiate a settlement but my attorney said most companies won't settle unless it's money up front...........a lump sum.
5. You COULD lose certain property such as furniture, appliances, collections, musical instruments but in general most companies won't bother. You claim the current resale value of what you have based on WHAT YOU CAN GET FOR IT...........not the replacement value or what the courts determine the value at. Since not much of anything other than food or gas has any value right now it's fairly easy to justify keeping most of your stuff.
6. If you acquire the debt in your name only your spouse is not included other than her/ his income can be factored into your total household income.
7. Your credit under bankruptcy is ruined for 10 years. Being in serious default ruins it for 8 years. Within 3 years you can start to rebuild substantially and your lawyer will show you how.
8. If you win a large sum of money or inheritance within 180 days of the bankruptcy they can go after it.
9. They have to leave you with certain items such as a car and at least 1 rifle and 1 handgun ( WHEW!!!). Various other necessities as well.
10. Student loans, tax issues are exempt from bankruptcy.
11. Don't wait to file until you already have jugements against you.
12. Cost is dependent on the number of creditors and collectors but ( in Oregon) not more than $2,000.00 start to finish.
13. You can't have any major purchases within 90 days of filing and avoid anything like payday loans as well.
14. From the time my problem started I have insisted on written communication ( which mainly go unanswered ) and I have ignored the collection calls. This seemed favorable to the lawyer and certainly didn't hurt me ( according to him).
15. His recommendation is to not bother paying anything his words " you are wasting your money".
16. You can reaffirm secured debts such as your house and car to keep them ( even if your ex is on the loan which was nice to know in my case).
Again, this was my $ 50.00 consult, not legal advice and others may have different info on their experiences but hope it helps.
Adding : Some years ago I purchased a Jeep. When my son was born he had some major complications which temporarily inhibited my ability to make full payments on this Jeep. I continued partial payments of what I could afford. The bank ( a very well known bank) was very nasty............to the point of calling my ( then) wife " ignorant". Imagine your new baby is on the verge of death and you have some dip collector calling your wife ignorant and harassing her on the phone. Mind you, we were still paying half of the payment. I told them to take the Jeep and uh.....................it.............. They repossessed the vehicle and auctioned it for $ 10,000.00. Over the next few years I paid the additional $ 5,000.00 balance plus interest that they did not get at auction. I couldn't buy a bicycle on credit during that time much less a car. A friend declared bankruptcy around the same time. Within a few weeks of the conclusion of her bankruptcy she purchased a newer car, jet ski, newer single wide manufactured home and a very nice new kirby vaccum. What's wrong with this picture ? I was responsible..............she was not. She was rewarded and I was punished. Again ? What is my motivation ?
Adding : The really unfortunate part of that whole ordeal is within 3 months we were back on track and could have resumed full payments. For several years we were reduced to driving $300.00 cars which were broke down more than they were running. All of this with a new baby with health concerns. Meanwhile my friend had a nice newer car which didn't break down along with a jet ski and a vaccume with a massager and shoe shiner................................ughhhhhhhhhhhhhhhhh. Bitter ? Maybe.
