going crazy... to BK or not to BK

First off, this is a great forum. Second, I need someone to tell me to BK or not to BK (I know this forum isn't for legal advice, just informational, so don't hold back). I've been reading all these posts and am only getting more confused...

I'm about 100K in the red from a business investment gone bad. (Live in California) Long story short, I stopped paying most of my cards in August 2002 (no job). Most ccs (have 20 or so) have been charged off already. I've been unemployed and unsuccessful in obtaining a job (waitressing, any low end/entry level job even). I live with my brother and boyfriend. My BF helps me with car payments, food, etc. I don't own a house or significant assets, and my regular profession barely pays 12/hr.

I recently contacted an attorney and currently have her on standby in case I'm served a summons. I haven't hired her yet but she knows everything about my case and says that BK is the best route I can take. I have her retainer signed and ready to go.

I have two other alternatives:

1) Do nothing. My attorney says someone will get a judgement and just keep renewing it every 10 years. I understand circumstances change and I might win the lotto (yeah, right) or I might inherit a good chunk of cash (don't have any rich relatives), but it's not likely to happen.

2) Settle. This is what I have been looking into now. (My brother might be able to lend me some money soon.) But I've been reading that it's often difficult to get the OCs to delete the account on CRs, so why pay if there's still going to be derogs on the reports? Anybody have any success with getting negative info removed after settlements on charged-off accounts? What about accounts bought by CAs? I'm seriously considering settlements at this point.

The thought of BK haunting me for 10 years is unbearable (especially when my score was in the mid 700s before all this crap happened to me).

What are the chances of me getting sued over the next 4 years (California SOL)?

If I do nothing, can the CAs suddenly wake up and in... say, year 4, put a collection mark on my CR? Then I would have to wait another 7 years from then for it to fall off? A total of 11 years??

Don't know what to do. BK is not high up on my list.

Help... I've got an appointment with my Beretta. Just kidding - there are worse things in life, I know. My problems are insignificant compared to other's.

Any suggestions?

Thanks.

If this were me, I would file Bk like yesterday. To have that much debt and no assets, you need to wipe the slate clean and start over which is what Bk will do for you. Don't worry about it "remaining" for 10 years. After like 2 years you will be able to get half way decent rates on loans and such and your scores will start improving almost right away when it wipes all of the charge offs off. This is what I would do and I wouldn't hesitate at all to do it.

First of all, I have not gone through the process of bk - I'm solely answering based on the TONS of reading I have done on different boards about it but I'm fairly positive of my answers. If I'm wrong about anything, hopefully someone will correct me.

Yes - you have to list all of your creditors when filing. Depending on the type of credit/creditor (charge cards vs car lons etc) is going to dictate how things will need to be handled. For instance, if you have a car loan in good standing you can reaffirm the loan and say "I do not want this discharged". If you are in good standing and the creditor agrees, nothing changes on that account. If you have a credit card that is current and in good standing, and it has a balance- you have to list it, you can try to get them to see you are paying them and want to continue in good faith but the ultimate decision goes to that creditor as to if they are willing you to keep the account or not. From what I've read, 99% of the creditors (credit card) will not agree to that. You can however pay that card down to zero, then since you don't owe them anything, you do not have to list them as a creditor.

I wouldn't worry about the impact the BK will have on your current creditors. For things like insurance, car loans, etc. Sure, you will be offered credit based on unreal intrest rates in the beginning... but within the first two years your scores will be back up to get decent rates again. I read on another board someone filed bk and within 6mo. his scores were back up to 700 again. He may have been lucky but I beleive it is possible. The charge offs you have now are having a worse impact on your scores than a bk will have in the next year.

Hope this helps.

Thanks for the feedback, qofther. What happens if I do nothing? Is that too risky? They can't get anything from me, and I've been reading that mos creditors won't file suit if they don't think they can collect.

I've decided not to do the settlements - too many to deal with, and I doubt most of them would delete derogs or change to anything more than a "settled". In that case, why pay money that I don't even have and will have to borrow to only end up with a still-screwed up credit report?

Now I'm down to 2 options:

Should I wait for my 4 year SOL?

Or should I BK it? I know this is what you suggest, but what bothers me most about the BK mark is that others might know about it and it's embarrassing - like potential employers. I don't care about other creditors finding out (if I were to apply for a car loan or something) - it's just difficult when I apply for jobs. Have you had any incidents with employers? It makes me look like I'm irresponsible and I'm far from irresponsible. It was a business investment gone bad + unemployment.

Thanks again for your help.

Well, there is still a number of thing to consider here... waiting 4 years for SOL to run out is a long time from now. Are collectors coming after you for any of this? If so that means the creditors haven't forgotten about this debt and will get a judgment if they feel the collected amout is worth their time to go to court over. It is a big risk to take if you decide to do nothing. Again in another board someone posted Cap1 sued and got a $20 judgment. I honestly don't know if that is for real or not but I have heard of judgments ranging from just a few hundred dollars on up. Not settling is probably a pretty good call IF you don't think you are going to buy a house in the next 7 years (that is how long a charge off takes to fall off your reports). It may not be on all loans, I'm not a loan officer to know or not, but I do know a good number require your reports to be clean of charge offs, settled still being acceptable.

This is the quandry I'm personally in. Two huge charge offs, one platinum card in perfect history. I can qualify for bk no problem but we are only talking about two accounts here. My issue is I want to buy a bigger house with in the next 3-4 years. I can't do that with charge offs and bk seems so unnecissary. 6 years is a long time for me to wait and let them fall off my reports. I'm not sure yet, but I think I may want to settle. I will take a hit on my reports, but no bk and I can still get a new house in short time.

Embarrasment is certainly a factor. But the big question I think would be: CAN I .EVER REALISTICALLY PAY THIS MONEY BACK? If the answer is no. File tomorrow. The sooner the better to get back to good credit history. I do have a couple of friends who filed... it was a big bang to their egos but they also now say that they do not regret it a bit and they just don't look back. I can't give any advice about employment and bk. I know nothing there... but both friends now have excellent jobs paying over $75k/yr in the computer field and neither checked credit for the jobs. If they did, it was no big deal.... besides - you have a very legitimate excuse that anyone would understand anyway. That certainally counts for something

Thanks, qofther. If you only have 2 charge offs, why not settle? I wish I had only 2 instead of 20-odd something. If you qualify for BK, then the creditors will certainly rather get something than nothing. I'm sure you're aware of the negotiating you have to do - in writing - for them to take off all the negative info on your credit reports (deletion or "paid" - just as long as it's not "settled"). You have the upper hand if you let them know you either settle on your terms or file BK and they get nothing. I think BK for 2 charge offs is a big waste.

I guess I should just BK so I don't sit around for the next 4 years wondering if I'll ever get a summons. Put it behind me... But it's so damn humiliating!

Thanks.
Good luck.

I think you will be surprised that you won't regret it. Good luck to you.

Hi qofther,

I'm in a similar situation as Angelina only slightly better in that I only have about $17K of CC and a loan debt. 2 Questions I want to ask:

1) I'm currently in good standing with one of the creditors and I understand that if I pay off their credit card I won't have to file it in the BK. But the catch is that I also owe about $2K of a non credit card loan with that same creditor which I'm unable to pay off in time to file the BK. Yet including them in is a reluctant choice I want to do since they're the most lenient creditor for me when it comes to auto loans. What should I do?

2) I'm also going back to school fulltime and want to know if a BK is going to deter me from obtaining a student loan. (I currently have one deferred from my last school attendance).

Ronnie

Ronnie- regarding #1, I'm not sure what you are getting at. You have a credit card you can pay to zero and you also have a car loan from the same people? What kind of loan is the 2k you can't pay off? If it is a car loan and you don't want to include them in the bk, you can reaffirm the account and keep it as is if the creditor agrees to it. If you have a good history, it shouldn't be a problem. As far as #2, I have absolutely no idea. I would suggest starting your own thread and asking that question in hopes someone has experience with it and can give you some insight.