Bankrupcy

Student Loans & Taxes are inviolate... 7 or 13... You still need to be paying them.

To know, bankruptcy is a Constitutional Right (just like freedom of the press and the right to bear arms, and all the rest), even though it has a lot of stigma attached to it (for individuals who DO, and for corporations who DON'T... The double standard has never made much sense to me. If it is the smart thing for a corporation to 'restructure' aka file bankruptcy, why is it looked down on for the individual? But I digress.)

DO speak with BOTH a government Credit Counselir AND an attorney.

DO NOT do 'debt consolidation (unless you take out a loan from the bank, that's different). Debt Consolidation companies are scams. The do NOT protect you at all (they only protect your creditors), and mist people who use them end up having to file for bankruptcy in a FAR WORSE position than they were when they went with consolidation.

Creditors, once you file CANNOT keep coming after you. New ones can, but it's one of the protections of bankruptcy that no old debts (pre dating your filing by 1 day or 20 years). If they don't petition the trustee during your discovery phase, they're SOL. If any try to, you just refer them to your attorney.

You'll still have the student loans, you can't file on them at all. We had been paying an attorney some money each month to build up enough to pay the fees. The laws changed and we could not come up with the higher amount to file. So we just let the bills go. What can they do. They cannot garnish our SSDI any more than it is already being garnished. There is nothing they can do to us.

It happens, people get in over their head. We are. We just have to not pay the bills or not eat on live on the streets. It is one of those things that so many moms on here have no concept of. They would "never" not pay their bills.

Sometimes I thing most of the moms on here are rich and have never had to go hungry so their kids could have 2nds and 3rds on dinner.

It is hard to decide to file bankruptcy but it is a legal option. I would talk to a bankruptcy attorney and get the facts and details of what it would mean. Every state has different laws and expectations.

You now have to qualify to file a chpt. 7. If you have to file a chpt 13, your debts are paid back over a 36 to 60 month period. You may have to pay none, a portion of or all your unsecured debts back, depending on your income and expenses. Bankruptcy is there for you to use if you need it and is designed to help people protect their assets while getting back on their feet financially. There is a stay that goes into effect when you file that prevents creditors from contacting you in any way. The stay can be lifted, but the creditor must file a motion and receive a court order for that to happen. Search the internet a little bit and see if you can find a recommended debtor's attorney. Many of them offer free first consultations so you can see exactly what your options are.

There are new bankruptcy laws in effect. It is not cut and dry like it used to be...and you may end up being required to pay back a good amount of your debt over a period of 5 to 7 years. You already know by now that student loans cannot be included in a bankruptcy as debt. Hmmm...I would give it a good thinking over.

We consolidated our debt (second mortgage) to avoid a bankruptcy. (still paying on this) Very few years later and we were in the same boat. We did end up taking out a bankruptcy. Wish we had done it in the first place. We are still struggling but we are not stressing out and receiving collection calls. We still had to pay our medical bills and student loans. They are easier to stay caught up on with the credit cards not eating up money from our budget each month.

Hi S.,
my husband and I filed Ch 7 a short time ago (July 2010). The attorneys at George T. Carlson & Associates (http://cobk.com/) represented us through the filing. They were patient, explained everything, were very thorough and got us through the process easily. We had medical bills, credit cards, mortgage, car loan, student loans, etc...I don't know how the laws have changed in the last 2+ years. The Carlson attorneys offer a free consult to get you started, I'm sure they can explain everything to you. There is a fee to file, it was completely worth it. We used the little bit of savings we had then; our savings have tripled since! That was a bonus out of all of this. It may be a blemish on our credit, but it will eventually go away after 10 years or so. We have been given a clean start and no longer have any stress around bills we cannot pay; we chose to keep our car, thus, we continued to pay for that despite the loan amount being discharged. And everyone is correct here, the student loans any taxes you owe the IRS are not discharged - you still have to pay those but it's much easier to pay them once everything else goes away. I'd be happy to answer any other questions you might have about our experience since it was so recent. Good luck! It's scary at first, but such a relief in the end.

My sister did and the laws have changed. Creditors can come back to you later, from my understanding. And you can not bankrupt student loans. I would speak to an attorney.