Bankruptcy and Charge-offs

Several months ago I checked with an attorney regarding bankruptcy. He said I needed at least $32,000 in debt and several other factors. With over $40,000 in debt I met all the criteria. Unfortunately, I did not have the $1,300 I needed for the attorney and court costs in order to file, so I’ve been waiting, hoping to get a little ahead. Since then, a few (even the largest) of the accounts are showing up on my credit report as “Charged Off” or “Charged Off Bad Debt” and show a 0.00 balance. Now what shows on my credit report is below the $32,000 threshold for filing. I am afraid if I don’t file, someone like Capital One will come back and garnish my wages even though they charged off the debt. Can I still file?

The credit cards may get around to suing you, ( and they can), but if thats the case, then you may be forced into BK at that point. What I would do in your case would be to save up some money and call them up (one at a time) and offer them a settlement of 50 cents on the dollar or so. If they charged it off, it means you probably haven’t paid anything on it for a while and they would be happy to get something. But don’t call them until you can offer them 50 cents on the dollar, but offer them 40 cents first, then you have a little more that they can negotiate with.

With only about $40,000 in debt, you are not really bankrupt. Asking a bankruptcy attorney if you should file bankruptcy is like asking a dog if it’s hungry ( as a friend of mine says). The answer is “yes” of course.

They can’t simply garnishee your wages, unless it is the IRS or student loans. They have to sue you first; win the case, which they would cuz you owe the money; then they would file a garnishee. At that point, you may be bankrupt. A few years ago I filed bankruptcy. I did the forms myself. I remember there was a legal supply store of some sort where I bought a booklet about how to do it.

It’s not that hard. You need to compile all your creditors’ names, addresses, amount owed. These days you can get the forms online. Find out the court in your city where you will file. There is a fee for filing. In nyc it is $245. The first thing to do is the automatic stay which is an injunction which prohibits to make attempts to collects, garnishe your wages, foreclose on your property. Do some googling on bankruptcy, , how to go about it, and downloads the forms. Call your local court and ask what the filing fee is. Believe me, you can do that without a lawyer.