Considering filing bankruptcy? Wanna screw a credit card company?

[Zorra]

This is a possible alternative to bankruptcy. I am not giving anyone legal advice here, just mentioning that this is an option that some folks use, and you could ask an attorney about this to see what s/he thinks:

Alternatives to Chapter 7 Bankruptcy

Learn what you can do instead of filing for Chapter 7.

In some situations, filing for Chapter 7 bankruptcy is the only sensible remedy for debt problems. In many others, however, another course of action makes better sense. This section outlines your main alternatives.

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 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.") Remember, 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, Social Security, unemployment or public assistance.

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, it will become legally uncollectible under state law (called the statute of limitations). And in seven years, it will come off your credit record.

http://bankruptcy.findlaw.com/articles/1613.html

A public service from the Resistance Underground.;-)

[NVMojo]

1. Jeez, just picture this happening enmasse!! The Bushevik corporations

might see a little collapse coming!!

[Occulus]

5. I've been considering a "national no-pay month" idea for some time now n/t

[kaitykaity]

2. That link doesn't go to an artlcle?

I'm filing my taxes tomorrow, and then I was planning
to file a Ch.7 to write off the two biggies (about $8 grand).

This isn't a bad idea.

[UdoKier]

3. Love it!

NT

[dweller]

4. are you sure those alternatives are still valid?

especially after today's passing of the House bill?

i don't know, just asking.
dp

edit: there's no date on the article but 2003.

[Zorra]

10. No, not sure.....when considering life changing financial moves it

probably be wise to consult with a good attorney first.

[neverenoughtinfoil]

6. I wonder....

....after the new Bankruptcy legislation passed the house just now, I wonder when the next round involving the words "prison" or "labor camp" comes around.

[raysr]

7. Done it

twice. Laughed all the way out of court, fuck 'em!

[dpibel]

8. A potential problem

If at any time during the limitation period on judgments you become solvent, the creditor can execute on the judgment. That would include things like winning the lottery, getting an inheritance, or getting a job that pays above-exemption level wages.

In addition, some states permit renewal of judgments. IIRC, in this state you can string a judgment out to ten years or so.

IOW, this plan involves your intending to stay judgment-proof for the life of the judgment.

I think the thought that the creditor won't bother to get a judgment is pretty optimistic. They've got people on retainer or salary to do nothing but that all day long. The cost of filing is pretty low; they figure you're going to give them a default judgment. So instead of just walking away, why not take the judgment and leave you looking over your shoulder for the limitation period.

But if you're set to live on very little, and plan to stay that way, this may be a viable option.

[FormerOstrich]

9. 2002 was not good to me...

for the first time ever I was having trouble getting work, my significant other of 12+ years and I "divorced" and I had people that owed me money not pay.

When I first started having problems keeping up the credit card companies rightfully lowered my credit limits. However, they lowered them so much I was over my credit limit. So they started charging me outrageous fees.

At the time I had a personal debit card and a business debit card. The bank absolutely would NOT allow the accounts to be tied together (so I couldn't electronically transfer like between two personal accounts). Once in awhile I would have something go through on the business acct that I felt certain I had used my personal. Typically, this resulted in insufficient funds and outrageous fees. I thought I was losing my mind. I separated the cards in my wallet. Then I took one of the wallet and had them separated in my bag. I wasn't dealing well with the situation and I did think I was losing my mind.

Finally, I was fortunate enough to have a decline at a business I had money in the account I was using and not the other. I could visibly see I which card I was using. I went immediately to the bank. Seems as if they had those accounts tied together after all. The reimbursed some of the fees but too much damage besides what they were dinging me.

It escalated downward for a very long time. If you wanted a manual on the exactly the wrong way to handle the situation...I would be it. I did everything wrong. I've lost nearly everything and have barely managed to keep my house (more on below).

It finally hit a low point when some collector managed to track down my parents and convince them that if they didn't pay my debt right then that they were having me arrested. Mom put it on her credit card (she absolutely cannot afford that..fortunatly I had her cancel it in time).

I have paid so much money to be poor...much more than I would have paid had I been keeping up. I was soo stupid. I kept trying to do all the "right" thing. "live up to my responsibilities" all while the sharks in the water were having a feeding frenzy. One collection agency sells your account to the next and it all starts up again. Only what you have paid isn't reflected (or so many charges are added you can't tell)

The best step was disconnecting the phone (well actually QWEST took that step for me wish they would have been more shark like and did it sooner...and got a pre-paid cell phone for looking for work..)

Next unless it's about the mortgage, utilities, or along that line I don't even read the mail. It kills me...half my mail is threats from collectors and attorneys and the other half, believe it or not, is people trying to give me credit!!

While it isn't over and won't be for a long time I'm at least not letting it paralyze me anymore.

A quick note of lessons learned about foreclosure. My house went into foreclosure and I managed to scrape up the money to pay the Re-conveyance people (which included enough fees I could have probably bought a car). When the mortgage went back to my lender they didn't send me any information. The Re-conveyance people told me I would be current on the loan and my next payment due was about a month and half away. Wrong! I was considered a month late as soon as it was out back to the lender.

Then the lender wouldn't take payments. They claim that they won't take partial payments and that you need to pay all of your arrears. Fortunately, I keep socking back my payments while trying to get enough ahead for the arrears. I didn't accomplish it in time and it went back into foreclosure. I did some checking and this is a common technique and more people loose their house this way without even realizing before it's too late.

I started working with a loss mitigation person from my lender and managed at the 11th hour (actually he postponed the sale twice..which is how close it came). After putting another car into my mortgage for the fees they saw fit to accept my money. I was a nervous wreck.

For the most part of two years my house has been in foreclosure even though I paid a ton of extra and I had most of what I owed them begging them to take it. When your house is in foreclosure you have a ton of people that feel free to come by saying the want to help (yeah right, like help me on out to the street). I nearly got into a physical altercation with one he made me so damn mad. My Niece was calling the police for me but I think he needed them more than me....and that's not really my character if that give you an idea of how harassed you can be.

So the next payment due (which at least working directly with the vendor you have a clue) after they re-did the loan (but they didn't lower that interest rate) I called the "Just In Time" phone line to make an electronic payment. Nope, can't do that...your still considered riff raff. You have to mail it. Well they have now charged me nearly $1200 LATE FEES which is more than the house payment. I haven't started this fight with them and I same thing on the next month (no phone) and I didn't have the money to send until my due date so I'm guessing they will consider it late and charge me another $1200 in LATE FEES. Hell maybe for foreclosure fees aren't so bad after all.. At any rate I will soon be waging that battle...I just am working up the energy.

So if you need any advice on how NOT to do things....I can help. They can smell the blood in the water and the vultures come from everywhere.