Need Credit advice -- major debt problems

[Raben]

OK I live in TN and here are my concerns or questions.

I'm not going into full detail as it's a tender subject for me on my marriage. Me for being stupid enough not to put a stop to it. Call it blinded with love or whatever.


But anyway, paying my wifes existing debts, honeymoon trip, wedding, and other stuff plus kids to happen along the way set me back 65K in unsecured debt.

We were paying ok (was 40K at the time) however she lost her job and now everything has been written off. And due to late fees and interest adding up, I now owe 65 grand.

These are all in collection agencies with a couple of them under LTD.



Now my quesiton. What can be done by them? There is no way I can even pay $20 a month right now to clean my credit. I simply can't pay right now.

Basically what I am asking, should I file chapter 7 or 13. . .or just forget about the unsecured debts as I now already have 7 years on this crap and let it clean itself (if that is really the thing as I don't know??)



Just looking for some feedback to better ease my mind. Thanks!!

 

[Rainaraines]

A common misconception with credit reports is that after 7 years, accounts fall off of your credit report. That is not true. They fall off of your credit report 7 years after you pay it in full. Now, due to the lack of proper updating, an account may fall off here and there after 7 years, but be forewarned that once the creditor realizes this, they will update the account with the credit bureaus and it will reappear. As far as the bk is concerned, a Ch. 7 sounds better for you, but I'm not entirely sure as your post doesn't contain all of the details. I would consult a bk atty on that one.

 

[Fl Cat7]

I am not a lawyer. But given what you have said I would think Ch 7 would be your best bet. It seems unlikely you will be able to pay this in less than 8 to ten years any way (at $500.00 per month it would take over 10 years, not counting interest over that time) and then your credit would still be bad for up to 7 years after that. You should check with a lawyer in your area for the details of your specific case; if all the debt can be discharged, some like child support or student loans and tax liens can not. And what assets you can keep. But I think that is your only real option given the limited info in your post. Good luck.

 

[Raben]

Thanks. That was what I was thinking. I was looking at BK as a last resort but looks like I am basically at that mark.

I just don't want to loose the house. I may not though. I spoke with one briefly and they told me that pretty much no trustee would pull my house because of what it's worth vs what I owe on the house + all the other debts. I could possibly keep my cars and everything as I pretty much don't have anything to give


Thanks, I'll consult with a lawyer and see what can and can't be done.

 

[Skylyn]

Rainer, please provide evidence for your statement: "They fall off of your credit report 7 years after you pay it in full." It is flat out untrue.

 

[Raben]

confused.

I'm now confused as to which would be best. I get mixed results. From some people in the financial areas here where I work tell me to NOT file chapter 7. Just let those debts hang out there and if I can pay it, then pay it. Otherwise don't worry. As a bankruptcy will haunt me forever.

 

[JETX]

A common misconception with credit reports is that after 7 years, accounts fall off of your credit report. That is not true. They fall off of your credit report 7 years after you pay it in full.

Sorry, but that is simply NOT correct.
Here is what the FCRA (Fair Credit Reporting Act) says:

§ 605. Requirements relating to information contained in consumer reports [15 U.S.C. § 1681c]
(a) Information excluded from consumer reports.
Except as authorized under subsection (b) of this section, no consumer reporting agency may make any consumer report containing any of the following items of information:
(1) Cases under title 11 [United States Code] or under the Bankruptcy Act that, from the date of entry of the order for relief or the date of adjudication, as the case may be, antedate the report by more than 10 years.
(2) Civil suits, civil judgments, and records of arrest that from date of entry, antedate the report by more than seven years or until the governing statute of limitations has expired, whichever is the longer period.
(3) Paid tax liens which, from date of payment, antedate the report by more than seven years.
(4) Accounts placed for collection or charged to profit and loss which antedate the report by more than seven years.
Source: http://www.ftc.gov/os/statutes/fcra.htm#605

I also refer you to FTC staff letter (Amason - Brinckerhoff) at the following:
http://www.ftc.gov/os/statutes/fcra/amason.htm

 

[JETX]

Basically what I am asking, should I file chapter 7 or 13. . .or just forget about the unsecured debts as I now already have 7 years on this crap and let it clean itself (if that is really the thing as I don't know??)

Just looking for some feedback to better ease my mind.

Before anyone can ACCURATELY answer your question, they would need to look at your COMPLETE financial condition.
So, please post the following on the internet:
1) Your last 3 months paychecks.
2) Copy of your lease.
3) Copy of ALL credit card statements (last 3 months)
4) Copies of ALL bank statements (3 months)
5) Copies of ALL medical bills (current)
6) Copies of ALL student loan agreements (not dischargeable anyway!).
7) Copies of ALL bills as to legal fees owed to the state.
8) Copies of ANY other debts you feel you need to try to avoid.

Then provide a link to all of them so that ALL of us can see whether you have sufficient debt to warrant considering bankruptcy.

 

[Raben]

I don't have a way to post those up however I can give some rought estimate figures.


This is the situation, all my debts, all in my name. Wife is on none of them as she already had bad credit however finally her side is turning fairer.

House -- 143,500 -- purchased for 139,000 however 100% financeing
Mastercard -- written off however 17,400
Visa -- written off however 9,000
Sears -- 8,000
Captial one -- $220 (still active and working on said account)
Carmel Financial -- $3100
MBNA -- $25,000
US Bank -- $1,400 (Remaining balance of Jeep that was totalled)

Car #1 -- 2003 Grand AM GT1, $26,400 (got screwed over but 1.9% interest)
Car #2 -- 1999 Trans AM, roughly $16,000


Student loans, I have none. Wife currently has one being in the works but wouldn't be a part of this.


Income. Wife doesn't work. Myself, $3750 before taxes every month.


That's the only debts I owe. I believe the unsecured stuff (visa, mastercard, sears, MBNA) are higher by now due to interest and written off. I have yet to receive statements from the collection Agencies on these accounts so unsure of the grand totals now.

 

[Rainaraines]

First of all, the OP's question did not relate to bankruptcies, judgments/liens, or collection accounts in regards to credit reporting. And as far as the charged-off accounts go, I work in the deficiency department of a finance company. All of our accounts are charged-off, and they do indeed fall of off credit reports 7 years after they are paid in full, because once we report it to the bureaus, we don't touch it again. Maybe we are talking about 2 different things, but I do know what I am talking about here.

 

[Skylyn]

Rainar said, "Maybe we are talking about 2 different things, but I do know what I am talking about here."

To put it simply, you don't know what you're talking about. Read JetX's post. If you still don't undertsand it, read it again (repeat if necessary). Stop posting incorrect information.


PS: You still haven't given any evidence that supports your position. Anecdotes don't count.

 

[cyana24]

A common misconception with credit reports is that after 7 years, accounts fall off of your credit report. That is not true. They fall off of your credit report 7 years after you pay it in full. Now, due to the lack of proper updating, an account may fall off here and there after 7 years, but be forewarned that once the creditor realizes this, they will update the account with the credit bureaus and it will reappear.

Read JETX's post again. What you are referring to is considered re-aging and it's considered "illegal" per the FCRA.

 

[bigun]

That's what NCO thought.

http://www.ftc.gov/opa/2004/05/ncogroup.htm

The FTC charges that NCO reported accounts using later-than-actual delinquency dates. Reporting later-than-actual dates may cause negative information to remain in a consumer’s credit file beyond the seven-year reporting period permitted by the FCRA for most information. When this occurs, consumers’ credit scores may be lowered, possibly resulting in their rejection for credit or their having to pay a higher interest rate.

 

[JETX]

And possibly resulting in lawsuits and awards against the 'debt collector' who violated the FCRA by 'thinking' that debts can reported FOREVER.... or until they are paid in full!!

 

[guest.]

http://www.ftc.gov/bcp/conline/pubs/buspubs/infopro.htm

6. Reporting Delinquencies -- Section 623(a)(5).
If you report information about a delinquent account that's placed for collection, charged to profit or loss, or subject to any similar action, you must, within 90 days after you report the information, notify the CRA of the month and the year of the commencement of the delinquency that immediately preceded your action. This will ensure that CRAs use the correct date when computing how long derogatory information can be kept in a consumer's file.
How do you report accounts that you have charged off or placed for collection? For example:
· A consumer becomes delinquent on March 15, 1998. The creditor places the account for collection on October 1, 1998.
In this case, the delinquency began on March 15, 1998. The date that the creditor places the account for collection has no significance for calculating how long the account can stay on the consumer's credit report. In this case, the date that must be reported to CRAs within 90 days after you first report the collection action is "March 1998."
· A consumer falls behind on monthly payments in January 1998, brings the account current in June 1998, pays on time and in full every month through October 1998, and thereafter makes no payments. The creditor charges off the account in December 1999.
In this case, the most recent delinquency began when the consumer failed to make the payment due in November 1998. The earlier delinquency is irrelevant. The creditor must report the November 1998 date within 90 days of reporting the charge-off. For example, if the creditor charges off the account in December 1999, and reports this charge-off on December 31, 1999, the creditor must provide the month and year of the delinquency (i.e., "November 1998") within 90 days of December 31, 1999.
· A consumer's account becomes delinquent on December 15, 1997. The account is first placed for collection on April 1, 1998. Collection is not successful. The merchant places the account with a second collection agency on June 1, 2003.
The date of the delinquency for reporting purposes is "December 1997." Repeatedly placing an account for collection does not change the date that the delinquency began.
· A consumer's credit account becomes delinquent on April 15, 1998. The consumer makes partial payments for the next five months but never brings the account current. The merchant places the account for collection in May of 1999.
Since the account was never brought current during the period that partial payments were made, the delinquency that immediately preceded the collection commenced in April 1998 when the consumer first became delinquent.