I am on limited income (Social Security Disability) and am in debt due to the actions of a former "friend" of mine. I am considering filing for bankruptcy to get the creditors off my back, and to start over fresh after a certain period of time has gone by (not sure how long that is; I've heard 7 years.) I am a responsible person when it comes to paying my bills on time, and the only reason why I'm in debt right now, is because I had trust in the wrong person.
Can you please tell me what process is involved in filing for bankruptcy, if there are any costs (are people who are on limited income, exempt from any fees), and what some pros and cons there are in filing for bankruptcy. Please be as specific as you can. Thank you.

I'm actually going through it right now and I know several people who have done it. It's best if you have a lawyer who specializes in bankruptcy cases. He/she can walk you through it and will handle all the creditors phone calls from the time you sign up with them until it's over with. My lawyer lets me pay him out $50/month for however long it takes me to pay my balance. The total cost for this process for me is over $2,000. I am actually about to finally finish paying him in a couple of weeks. Once I pay the final payment, he will file for me which can take 30 days to get a court date then we go to court and then 90 days later I get my discharge papers in the mail. Pros of this is I can start fresh and rebuild my credit and in a few years I can look at buying a house or a new car. Cons of this are it's over $2,000 and it takes a couple of years for it to be erased from your credit report.

I have A LOT of credit card debt from opening a business and having to sell it in one year because of family responsibilities. Saw a bankruptcy attorney, but the options don't seem to work for me as there's no way I could ever pay off these debts.
I know it's very immoral, but what will actually happen if I just stop paying on them? I know I'll be inendated with phone calls and lose my good credit standing, but can they attach my bank account or any other asset?

I am a paralegal for a bankruptcy attorney who specializes in Chapter 7 and Chapter 13. The first thing you need to ask yourself is–can you live if these creditors get garnishments against you? A creditor can get up to 25% of your paycheck. If the debt is small enough to where it can be paid off rather quickly through the garnishment, then it may not be so detrimental. However, if you are living paycheck to paycheck, it may not be the best situation for you to be in. The other issue is that a judgment, if certified, can attach to your assets, particularly any property you own. If you should want to refinance or even sell your home, those judgments will have to be satisfied and they can often screw up any financing that you have acquired.
Bankruptcy is not as negative as everyone thinks it is. It can stay on your credit report for up to 7 to 10 years. It depends on the credit reporting agenxt. Experian typically reports for 10; transunion and equifax are typically 7 years. However, there have been a multitude of studies recently that show that after you get out of bankruptcy, your credit rebuilds faster than if you were to attempt to do it on your own.
A Chapter 7 bankruptcy usually lasts from 4 to 5 months. And for most individuals, depending on your income level and the exemption laws of the state you live in, you may be paying a miniscule percentage of what you owe. Think — you pay $1500.00 for attorney fees in a Chapter 7 and you discharge $40 or $50K worth of credit card debt. While some people think it is immoral–just open your Bible and turn to Nehemiah 10:31 and Deuteronomy 15:1-2. If bankruptcy were immoral, would it be legal and provided for by the U.S. Government — one of the most prudish governments there is? What you really need to look at is your income level. If you are below the median for your area (which you can find in bankruptcy code books or from the state statutes concerning exemptions, which vary from state to state) then you are eligible to file for a Chapter 7. There are other issues such as personal property and how much of it falls within the exemptions, as well as concerns regarding recent transfers of property. These can all be brought to the attention of a bankruptcy attorney and they can guide you in the right direction.
If your income is OVER the median, then you have no choice but to a Chapter 13 bankruptcy…which can be very long and painful for some people. They last from 3 to 5 years and eat up a lot of your income. The Chapter 13 is ideal for people who are behind on their loans to either mortgage companies or their vehicle lenders or if you are behind in taxes and/or child support payments.
The bankruptcy code is federal and does not change from state to state. However, what does change are the exemptions which are incredibly important so I would recommend seeking counsel on those matters.
I have had a lot of clients who have been screwed over by the credit negotiating programs but if you find one that has good references from people you know and is trustworthy-go for it.

Wondering how bankruptcy works if you are married. Say if one has awful credit, and the other has really good credit. The one needs to file for bankruptcy. Will the bankruptcy affect the other spouse? Or can the one do it alone without affecting the spouse at all? Any info or sites to look at would be appreciated. THANKS!

It will because they look at BOTH incomes and now that the bankruptcy laws have become more strict, it is even harder to file for bankruptcy. you can try these sites:
www.bankruptcyaction.com
www.law.cornell.edu/topics/bankruptcy.html
www.lectlaw.com/files/bnk06.htm

Hope this helps

I recently found out that when I was about 5, my parents had to file for bankruptcy. My parents are now divorced. Since I am only 15, I don’t fully understand the concept of bankruptcy. What are the consequences of filing for bankruptcy? What are the benefits? And, What are the benefits of not filing for bankruptcy?

Depending on what chapter the bankruptcy was filed under, I’m assuming Chapter 7, liquidation, the bankruptcy court appoints a trustee to break up the assets owned by your parents and distribute it to creditors.

Aside from essential assets such as tools of the trade, home, etc. you lose everything to pay off any delinquencies.

There are almost no benefits to bankruptcy as it ruins your credit score and makes it almost impossible to receive a loan in the future.

Bankruptcy is only a last resort, if all other choices have been exhausted.

There are much more implications to bankruptcy I probably left out, but that’s the general stuff.

My husband and I just filed for bankruptcy not too long ago and are planning on getting a cell phone plan. Does anyone know how much the bankruptcy will affect our deposit for phone service (credit check deposit)

Could be anywhere from 150.00 to 300.00 deposit…You can go online to the provider and pick plans and do a check that way…it should be able to tell you how much you’ll need to get the plan. Been there.

I had a very bad injury and now no income, I can not afford to pay for car or any other bills, bankruptcy is only option. How hard is it to rebuild your credit?

Disclaimer: Nothing that follows is intended to be legal advice. If you need legal advice for any issue, please consult a qualified, licensed attorney in your area. What follows is simply a lay, but educated, opinion, and no warranty, guarantee, or responsibility; legal, financial, or otherwise, passes from the author to the reader. In other words, don't sue me for what I am about to say.

Bankruptcy is almost never the only option.

If you speak to a bankruptcy attorney, I can guess their advice to you with a very high degree of certainty (if you need a clue, think how s/he makes money). If you don't file, they don't get paid.

A bankruptcy will stay on your credit for ten years. Also, you will NEVER be able to check a box on a credit application which states, "Have you EVER filed for bankruptcy protection?" without committing perjury.

People file bankruptcy in order to protect their things or their income. It will be much easier to rebuild your credit if you don't file bankruptcy than if you do, although it may look like it would be easier to start off fresh. (It's not really a fresh start)

A couple of rules of thumb with regard to choosing if you do, or if you don't, want to file:

1) Is anyone suing you? If not, you have no worries yet.
2) Are you going to lose anything that you might be able to afford to keep otherwise? You said you want to give back your car, so let it go. (The finance company will try to sue you for a deficiency balance. Do everything you can to convince them that they are wasting their time and money, because you will never be able to pay them back, and you have no income or assets. - If they don't sue you, that will help you a lot.)

Regarding medical bills, which I assume you have. If you were treated at a county hospital (or other state-funded care facility), speak to someone at their collections department, and see if you qualify as a "Medically Indigent Adult" or MIA.

No, this does not mean that you are living on the street or that you are missing in action. All it means is that you do not have the resources (cash or insurance) to cover your debt to the hospital. If you qualify, a good portion or perhaps all of your medical debt from the hospital can go away. No collection agencies, no bankruptcy, just forgiveness.

Next, you should probably choose one credit card to keep for emergencies. Pick one with a high limit, and hopefully, a low balance. Let the rest go, if you can't make the payments. If you cannot work because of your injuries, file for disability, unemployment, or worker's compensation; whichever might apply to your situation.

Do contact your creditors and ask if they have any possible solutions for you. DO NOT go to a credit counselling service or debt management company, because this can cause more damage to your credit than a bankruptcy would!

If your injuries are permanent, you should investigate whether you might be able to qualify for state disability, medicare or social security disability benefits.

If you will not be able to generate an income in the future, then credit will not be an issue for you anyway, because no one will give you credit if you have no income.

If your inability to work is temporary, then I have good news for you! Even though you will not be keeping up with your bills in the short term, when you do start working again, and you can afford to make payments again, you can more easily rehabilitate your credit by resuming the monthly payments on your bills.

After six to twelve months of on-time payments, you can approach your creditors to see if they would be willing to remove any negative marks against you, taking into account your prior payment history and the fact that you are making good on your original promises, in spite of your injury, now that you are back on your feet again.

If you do get sued for any of your bills and lose, all they can take is a maximum of 25% of your income above a threshhold that varies by state. The 25% may hurt, but it's probably not as much as you are paying in total for your bills now, so it could actually be an improvement.

It may sound like I am saying to run from your bills. Actually, I'm not saying that, but that's what a bankruptcy does. I'm saying that your situation, while dire, need not be fatal to your credit future.

I hope you recover quickly, and I hope that some of this advice may help you. Good luck to you.

A property that I am a co-signer on is going into foreclosure. In a question I asked previously regarding this matter, someone pointed out that I will be sent a 1099-c form. What exactly does this mean? If the house is sold at auction will I owe taxes on the amount the house sells for or the amount that was owed or, if the house does not sell for enough, will I owe taxes on the amount not paid?

If we can sell the house before the foreclosure is complete, how does that impact the situation? I'm so confused.

And please, no posts about your tax or loan company. I will report it as abuse.

I know most of the answer.

If the property is a personal residence and sells for more than the mortgage amount, but less than a gain of $250k for a single filer ($500k for a married filer), then there are no tax implications- assuming certain rules under the IRC are met.

If the personal property sells for less than the outstanding mortgage amount plus interest, costs, and fees, then it depends on what the lender does. If the lender gets a deficiency judgement and goes after the borrower for the rest, then again, there should be no tax implications- yet. If the lender writes off the deficiency, this write off is taxable income to someone. If the primary borrower does not pay it, then it is possible that the IRS could come after you (this is the one part of my answer about which I am not 100% certain).

If the property is classified as business or trade property, then there WILL be a taxable gain or loss on the property that someone has to claim. Again, the IRS will make sure that someone pays.

I am not in foreclosure yet, but I recently lost my position and we have very little savings so I don't know that I will be able to save my house. We just got into our home in July and then my company lost a major account and I was out of work. I am doing sales now, but that is commission based and slow to pay. I have no equity in my home per se, and i live in California. I guess I'm wondering with the market the way it is, it might be better to walk away and try again in a few years.

Sell …it's the only chance you have….otherwise your credit would be destroyed for a long time….you wouldn't be able to even rent in a good place…..you would end up in a crimeridden roach infested motel somewhere.

Good luck.

My house in California is currently in foreclosure. I have a 1st and a 2nd mortgage as well as a 3rd, seller note. What happens at the foreclosure auction? What happens if there isn't enough funds to pay off the leins? What if any steps should I take?

when the first note forecloses on the property all other liens/notes that came after which are called junior compared to the first note called the senior, are wipe out

depending on the second note, if it was recourse they can come after you, also the third can come after you as well

I have not been able to pay my house for the past six months, it went into foreclosure and know I got to pay Property Taxes but I dont have the money either. Could all of this affexct my ability to get my citizenship.

One thing that immigration looks into is
that once the process is started you wont
be a burden in society or ask for food
stamps, they want to know that theyre
giving citizenship to hardworking people
File your taxes on time and you shouldnt
have that much of a problem. Now your
credit is another thing, once youre a
citizen then you have to worry about
the foreclosure and your payments that
really doesnt help you, I dont know what
state your from but here in texas you
miss 2 payments and youre outta there
so youre lucky you got 6 months.