Help...need Advice on Filing Bankruptcy!

Updated on September 17, 2009
C.W. asks from Philadelphia, PA
14 answers


I am at my wits right now recieving collection calls day and night. My situation is after quiting my "I hate this Company" job and going back to school for my MBA in project Management and having a son in the midst of it all I can't find a JOB! I did work for a short moment of 4 months but got laid off due to the economy. Ever since then I have been searching but no luck what's so ever. I am not eligble for unemployment so we have been living off of my husbands income which we struggle to make all the household bills monthly. My personal debt from credit cards have been put on the back burner and I have written letters to the companies explaingin my situation. I was actually going through a waiting period for an unemployment status and just receieved a hearing for it. Unfortunaltely, I am not finanically eligible since I only worked 4 months. Now IAm really screwed since that was my only hope and fall back. I don't get what part they don't understand when someone is unemployed. I obviously can't make a monthly payment the next step is I get a collector's lettter stating I need to make payment in full.(what retard made this up) Sorry, it just makes me so upset.
At this point my credit is screwed for awhile since I have three in collections now it's either make payment in full or continue struggling for yrs to come that goes on my credit for seven yrs; or file bankruptcy with forgiven debt that goes on my credit for 10 yrs.
My question is where do I start and who do I call to get this started? I just need some peace and want to move on. Any advice would be greatly appreciated, thank you so much.

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So What Happened?

Thank-you so much for your advice and support. I will go pick up Dave Ramsey's book to help us in the future. I have contacted a lawyer and have the process started. Once again thanks your support was greatly appreciated !

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answers from Erie on

Sammy is right, the first thing you do is schedule an appt with a bankruptcy lawyer. To make the appt much easier take a statement for all credit cards, loans, etc. as well as pay stubs. I filed in 7/2006 and it was a life saver. My husband and I had tried the consolidation route which was a big bust! Good Luck and let me know if you have any other questions.

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answers from Philadelphia on

I agree with Denise.
Don't jump to bankruptcy just yet.
Make sure you are spending the bare bones. This didn't happen overnight, and it will take time to get out of debt, but you can do it.
Consider taking just any job for now. Even if it means working at Target in the evenings.
You need to stop the bleeding, and look at ways you can bring in more money.
Sell anything you don't need. Consider selling your house and renting for a year or two. Downsize your car.
I have some experience in this area, I write about personal finance, so feel free to contact me via my blog (listed in my profile).

Don't give up hope, yet.

Good luck!

1 mom found this helpful


answers from Pittsburgh on

Please, please PLEASE do not jump the gun on this! Yes--you are in a mess, but you CAN get yourself OUT of it without filing bankruptcy. That should be a LAST LAST LAST resort.
Don't walk, RUN, to your library and get your self O. of the following books: Financial Peace or Total Money Makeover by Dave Ramsay. You'll get no easy, magical, quick results but you WILL get out of debt and you will be in a better place a year from now, I promise.
You can also check his website
You don't need to spend a DIME to utilize the easy-to-follow plan outlined in his books.
You didn't get into this situation in O. day and it WILL take longer than that to get out of it but you CAN do this.
For now, concentrate on keeping your mortgage current, food on your table and your lights and gas on. Immediately stop your cable service, cell phones, paper delivery, lawn care provider, anything that is NON ESSENTIAL to "stop the bleeding."
Please remember that bill collectors are generally rewarded for collecting and many use nasty methods to get you to cave in and allocate sometimes non-existent funds for their bill. Never give them your bank account information, never send post-dated checks or anything else they try to talk or scare you into. Ignore them for now til you get on board with this program. It offers REAL help and real hope.
Start by doing the 10 Baby Steps outlined in the program. Remain calm and take control of this situation before IT takes control of you.
Also, stay away from debt consolidation loans--they are often times just as damaging as bankruptcy.
I promise your family can do this. Hang tough. Good luck!

1 mom found this helpful


answers from Philadelphia on

In order to file bankruptcy you need a lawyer to do it for you. It is a court case like any other, where you file privately. Once you do that, a "stay" is issued meaning creditors can't call you or take collections actions. The court then determines what assets you have, and divides them up among your creditors. That "discharges" the loan and they can't come after you for anything else. Not all debts are discharged by bankruptcy, and it depends on state law. You absolutely need a lawyer.

I also wanted to let you know that it is pretty offensive to use "retard" the way you did. Even pretty young kids know this, and manage to speak more respectfully. You are writing on an open forum, and it gave me such a bad, trashy opinion of you that I almost didn't want to write in to help you. Since your child would get in trouble at school for speaking like that, you should set the teaching example. I know you are frustrated and at wits end, but language and expression like that might be part of why you are having trouble getting a new job. No one wants a person who speaks like that to represent their company!

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answers from Harrisburg on

The others are right. DO NOT file bankruptcy. Either you or your husband should get a part-time job to supplement his income and cut ALL unnecessary spending. NO new clothes...lunches out...and eat lots of pasta! :) This isn't the time to say a particular job is beneath you. Drive a school bus (you can take your child with you), work at a fast food restaurant, take in some other children for child care...there are a lot of possibilities. Will it hurt? Absolutely, but you CAN do it. You must have built up a work history to collect unemployment...4 months is not enough time.



answers from Pittsburgh on

It has been 8 years since I claimed bankruptcy, so the laws may have changed. My first step was to contact a lawyer who dealt with bankruptcy.
You can rebuild your credit. You will get offered credit after you claim bankrupt. We have gotten 2 car loans and a few credit cards since claiming bankrupt.


answers from Philadelphia on

You are not the only one, so don't feel that your are alone. And, that this situation, too will pass, sooner or later.

As far as bankruptcy, I think your county courthouse can help you with this. As far as the credit cards, remember that they are unsecured debt and have very little recourse, except to get a judgment against you. But with little money, there realistically is not very much that they can do, despite their claims.

Also, remember that many of these banks got a bailout, unlike you, so I would not really feel so bad about them. Besides, the real question is why they don't use your portion of the taxes used to bail them out or the interest on public taxes used to bail them out, to pay the debt, since they like taking bailout money.

Also, what a lot of these companies do is "sell" their "bad debt" to collection companies. These companies only get paid if they collect, so your probably going to get "do or die" letters from them.

What you really need to make sure you do is pay your utility, food, mortgages (if you can) and other necessary bills you need to take care of your family.



answers from State College on

Do not file bankruptcy. Generally they discharge some debt, but you still have to make payments on any thing that does not get discharged. Check this out:



answers from Philadelphia on

There is a very good company that helps people who are in pre-forclosure called Secure Property Solutions. You can google it and find out more info. and their phone number. Ask for Mike Malone and tell him you were referred by C.. I used to work for the company. He is very nice and will give you a free consultation and discuss with you some options! Good luck!



answers from York on

I agree with the other moms who say DON'T FILE BANKRUPTCY! Read "Total Money Makeover" by Dave Ramsey and make your husband read it too. It took you both to get in the situation you're in and it will take you both to get out. This book is awesome - it is so inspiring! It will take time and work, but it's totally worth it. We've only been following the ideas in the book for a few months, but are almost totally debt free except for our house! It really works!



answers from Philadelphia on

Years ago my husband was out of work for almost a year and we ended up using credit cards for many things including groceries just because we couldn't afford anything. Then the reality hit - too much credit card debt and collection calls, almost had our car repossesed. It was a nightmare. A few things that I have found out over the years...

1) Credit card consolidation company. By doing this we were able to pay lower monthly payments & get a lower interest rate. You have to pay on time, but it is more manageable than paying the actual companies. Any time anyone looked at my credit, they said it was good that I did this.
2) Call your car loan companies, mortgage company, any other lender and explain your situation - They may have programs where you can deffer a payment or two (or more).
3) Call the electric, gas, water, or other utility companies and see if they have a payment plan.
4) Cut back on any unnecessary items like cable, or anything else that you can live without for awhile.
5) Look for any work even if it is not in your career choice. Part time at a retail store will help but food on the table.

Good luck. Hopefully this will help.


answers from Allentown on

Hi C.,

Check with the Better Business Bureau in your area.

They have a credit counseling section, they may be able to help.

Go on the web and check to see where a Better Business Bureau is in your area.

Hope this helps. D.



answers from Philadelphia on

I would suggest you contact a local credit couseling agency and get some advice from them. They are there to help people in your situation and may be able to help you negotiate with your creditors or at least give you all of your options. Here's a link to find an approved agency in your area:

Reading Dave Ramsey is great but I think it would be more beneficial for you to talk with someone who can give you more immediate help and maybe help put your mind at ease. You can also write to the collection agencies and ask them to contact you only through the US mail and not over the phone. When you send the letter send it Registered mail, Return Receipt Requested.



answers from Erie on

I would start with Dave Ramsey's Total Money Makeover. (a book) In this economy you may be on one paycheck for a while, and you need to learn how to budget. Bankruptcy can clear your credit card debts, but if you don't learn to live on one income, you're going to find yourself back in the same spot later, and not be able to go thru bankruptcy twice -- at least not without an adequate interval in between.

Read the book, see what you can live without, what are necessities, and he has a neat way in there for handling collectors and credit card debts.

Also, the reason they tell you that you need to pay the whole amount is a legal reason. There's a clause in every bank note that says when the account reaches a certain level of delinquency, that the bank can "accelerate the loan" and declare it due in full. They have to do that to take any kind of legal collective action.

I've done a whole host of things since being unemployed. I've worked seasonally at a ski resort, I took a tax class and have worked 3 winters doing tax preparation for Jackson Hewitt, I have worked in a greenhouse -- lots of jobs I wouldn't have taken so much while my career was on the go, but I enjoyed them. I also have a small hobby type of business, and it brings in about $400.00 year. I'm now taking courses toward a real estate license because I know I have to get back to FT employment, and in sales, they'll take you because they don't have to pay you until you produce. :-)

You have an MBA, think it through, and START a business on a shoestring. Use the internet. Sell stuff in a lawn sale or on E-bay. Downsize your life. Do you need cable tv ? Do you need more than one cell phone ? Or any at all ? It's a luxory, remember. You can buy foods through Angel Food Ministries for a while, which is very inexpensive. Use the money and the time you DO have as wisely as you can, just as if you were running a company. The biggest way any company can maximize its profit is to minimize the expenses, and that's what you have to do to succeed as a family, too. If you need to, sell the second car -- you don't have two jobs, anyway -- and the value there may pay off a credit card completely -- but if you put any cash on the cards, call first and bargain the balances down. Don't pay the whole amount, cuz most of what is due is late fees, and penalty interest rates -- you most likely won't have to pay more than 1/2 the balance due.

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