PostHeaderIcon Considering Filing for Bankruptcy in Virginia?


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I have recently lost my job after being in the telecommunications industry for ten years. I have had no luck finding a new 9-5 job with a regular salary. I have been forced to take a job full time at a restaurant.

I have over $29,000 in credit card debt most with APR’s in the high 20′s. I have done my best over the last 6 months to keep up with my minimum payments but am finding it impossible recently to balance my debt along with my living expenses. By living expense, I do mean the bare minimums. Rent,utilities, gas, food etc.. I have not wasted funds on entertainment or purchases other than does required for work.

I had an hour long conversation today with a debt consolidation company. It is has been in business since 1965 and is non-profit. I actually used their services in the past to consolidate debt that I managed to pay off about 8 years ago. They analyzed all of my assets, income, debt and overall financial situation. They determined that I was running at a 65% deficit between what I am brining in and what I owe. They recommended that, although it may sound harsh, my best option was to file for bankruptcy. They determined that I would not be able to keep up with any type of repayment schedule that they would negotiate with the banks and that a fresh start may be my best option.

I have avoided the thought of filing for bankruptcy in the past for several reasons. But now that my income is at an all time low and my job prospects do not seem to be sorting themselves out in the near future, I do not now what other options I have available to me. Needless to say, the stress of the whole situation has been making life extremely unpleasant.

I am single, have no kids, and will not be purchasing a house in the near future. The only asset I own, is an 8 year old car.

I have five questions:

1) Other than having a bankruptcy ruling on my file for the next ten years and not being able to secure credit, what are the other disadvantages of filing for bankruptcy?

2) I do not have disposable income. I am making enough to pay for essentials. Would my chances of having the entire debt excused be good? Or would I still be responsible for paying a percentage?

3) I know from my corporate experience that my credit file would be reviewed during the job applications process. I am considering a career with the Federal Government. How would a bankruptcy ruling be looked upon by the government during the job application process?

4) How much with a reputable bankruptcy lawyer cost me?

5) I have also read that another option is to do nothing and ignore my creditors. The following excerpt below is from http://bankruptcy.findlaw.com/ . Is this plausible?

Do Nothing
Surprisingly, the best approach for some people deeply in debt is to take no action at all. If you’re living simply, with little income and property, and look forward to a similar life in the future, you may be what’s known as “judgment proof.” This means that anyone who sues you and obtains a court judgment won’t be able to collect from you simply because you don’t have anything they can legally take. (As a famous song of the 1970s said, “freedom’s just another word for nothing left to lose.”)

Except in unusual situations (being a tax protester or willfully failing to pay child support) you can’t be thrown in jail for not paying your debts. Nor can a creditor take away such essentials as basic clothing, ordinary household furnishings, personal effects, food, or Social Security, unemployment, or public assistance benefits.

So, if you don’t anticipate having a steady income or property a creditor could grab, bankruptcy is probably not necessary. Your creditors probably won’t sue you, because it’s unlikely they could collect the judgment. Instead, they’ll simply write off your debt and treat it as a deductible business loss for income tax purposes. In several years, the debt will become legally uncollectible. And in seven years, the debt will come off your credit record.

I am planning on contacting a bankruptcy lawyer for further advice but wanted to get an idea as to what I am dealing with before I further the process.

I appreciate any feedback the Yahoo community is able to provide!

Thank you in advance!!

5 Responses to “Considering Filing for Bankruptcy in Virginia?”

  • Jay D says:

    Wow, It must have taken you hours to type this speil up. And serously, judging on what you’ve explained above, I think it would be wise to file for bankruptcy and consult with a lawyer as well. Because really, the longer you wait, the worse you’ll be off. That’s just my two cents…Hope all turns out good for you though.

  • Debt Slayer says:

    Bankruptcy is not the solution. Even if you take this awful route, you’ll still end up in this exact same place a few years from now if you don’t make other changes in your life. As you already pointed out, the federal government will check your credit history when you apply for a job with them. I recommend you find a real financial counselor who can help avoid bankruptcy. Go to daveramsey.com and click on “financial counseling” in the top right corner. Don’t give up hope. Remember, it isn’t over until you quit.

  • atprincess says:

    Doing nothing may not be the best answer either. My mother-in-law is certainly “judgement proof”. She lost her job shortly after her car was repossed and lives with relatives now and does light housekeeping and nanny work for them. The car company said she still owes them $7,000 and sued her for it. Her court date is coming up, so I don’t have any results for you, but being judgement proof didn’t stop someone for suing her. You should definitely talk to a lawyer. We filed bankruptcy nearly ten years ago, and it has been a long hard road, but we were still able to get credit with some credit card companies, a mortgage with a decent interest rate. I’ve even had several car loans with ok rates. I have found that the worst thing for your credit report/score is to fall behind on credit payments.

    I don’t know if you are financial able, but in Jim Cramer’s book Stay Mad for Life, he suggests making minimum payments on all of the credit cards except for the one with the lowest interest rate and make as big as possible payments on that one. Then transfer funds from the highest credit card to the lowest. Continue to make large payments on the lowest card and keep transfering the debt from the other cards to it until one by one they are paid off. Perhaps you can make this work somehow in your situation.

    Also, have you considered creating a website with content you have learned from being in telecommunications? Create a directory or some community and find a way monetize it. Perhaps it can be enough to pay down your credit debt. Yahoo is a cheap but good web hosting company. Their website builder is very easy to use. Good luck to you!

  • Lesley says:

    Doing nothing is a really bad idea. If you get sued anyway. Do not ignore court papers if a creditor sues you, that is what will get you in trouble.

    1 – the only other disadvantage i can think of is that it can adversely effect your ability to get certain types of jobs. You will be able to secure undesirable credit right away though. (reall high interest rates.

    2 – Whether you have to file a chapter 13 and pay a percentage of debt depends on the means test, not real expenses, but I’m guessing you probably won’t need a chapter 13.

    3 – It depends on the job in the government you’re looking into. In some positions I don’t think it matters, in others it may make the difference because of security clearances.

    4 – I don’t know what the going rate for bankruptcies is in your neck of the woods, you have to ask the attorneys that do bankruptcy to find that out.

    5 – Like I said, doing nothing is a bad idea. It’s one thing if they haven’t sued you, but once they do (and they do more often than that article makes you think) ignoring the problem doesn’t make it go away.

  • Curtis C says:

    Sorry to hear what you are going through. Here is another resource for you below.

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